The Political Climate for Climate Action: An Earth Day Outlook
With Congress out of session, the Biden Administration has used the week leading up to Earth Day to showcase several of the environmental accomplishments of its tenure. Announcements related to the phasedown of hydrofluorocarbons (HFCs), clean energy demonstrations, transportation emissions reduction, and nature-based resiliency are all on the docket as officials look to dispel the idea that an ambitious climate agenda is dead. With that in mind, we’ve prepared a short rundown of activity in the energy and environmental space as the administration eyes the rapidly approaching midterm elections.
Implementation of the Bipartisan Infrastructure Law
In the months since the Infrastructure Investment and Jobs Act (IIJA) was signed into law, the Biden Administration has made implementation a priority. To this end, the White House published a 465-page guidebook outlining program-by-program information about how states, localities, and tribal governments can access funding. The sprawling package allocates $21.3 billion for clean power, $21.5 billion for clean energy demonstrations, $21.5 billion for energy efficiency and weatherization retrofits, and $8.6 billion for clean energy manufacturing and workforce development, as well as more than $50 billion to protect against natural disasters. Agencies have begun pushing out funding, and there are a number of Funding Opportunity Announcements (FOA) currently available in areas such as school energy efficiency improvements, hydrogen hubs, and vehicle battery recycling.
Build Back Slimmer
Build Back Better (BBB) was a very popular phrase in 2021, but momentum has stalled this year. There is hope that a pared-down version could pass, but if it does, its name won't resemble BBB in the hopes that Democrats can distance themselves from the failed negotiations in time for fall campaigns. There are a few likely components of another reconciliation package: drug pricing, universal pre-K, and clean energy. Given the preferences of Sen. Joe Manchin (D-WV), the clean energy aspect will almost certainly take the form of tax credits for renewables and for carbon capture and nuclear. The continued lack of action is holding up other measures outside of clean energy and climate. With Democrats making little progress on BBB, Republicans refuse to come to the table on what are otherwise bipartisan issues.
Other Opportunities in Congress
There are a small number of bills that are “must pass” by the end of the year, though not many fall under the clean energy and environment umbrella. There is hope that some efforts could hitch a ride on these must pass bills like the National Defense Authorization Act (NDAA), but if Congress ends up using a continuing resolution (CR) to fund the government rather than the annual appropriations process, there is not much hope that new programs will find their way to the President's desk. The lack of legislative vehicles this year – the NDAA, probably a CR, and perhaps some version of reconciliation – means Democrats are beginning to pivot to measures that are more likely to pass next Congress. For example, hearings have already begun on next year's Farm Bill reauthorization, and there is a push to link agriculture and climate solutions, something Democrats hope will generate bipartisan support. Other areas for potential bipartisan support in a future Congress include energy security, domestic production of critical minerals, and resiliency.
Administration Options
With Congress gradually shifting focus from DC to their states and districts ahead of the November elections, executive action is going to become the way in which a lot of climate issues get addressed this year and over the next two years. Already, they’ve released new rules on vehicle fuel efficiency and have made funding available to keep open existing nuclear plants that otherwise would close, and have sought to boost heat pump adoption and the deployment of renewables (e.g., wind) on public lands. The most recently published regulatory agenda also points to a number of appliance efficiency updates, many of which are long overdue.
It’s worth noting that Louisiana’s Attorney General Jeff Landry recently said that he plans to ask the Supreme Court to stop the Biden Administration from using the social cost of carbon (SCC), a key metric used in climate-related regulation, after the 5th U.S. Circuit Court of Appeals denied a request from Louisiana and other states that had asked for a rehearing of a ruling that allowed the administration to resume use of an interim SCC. Should the effort be successful, future regulatory efforts would become significantly more difficult to accomplish.
On the Horizon
The Ukraine conflict and a host of other domestic challenges have temporarily pushed environmental issues to the side, with pocketbook issues such as gas, housing, and groceries replacing greenhouse gases as the new “GHG” that voters are most worried about. Regardless, we expect the Administration to continue its efforts implementing the infrastructure bill and to work on rules boosting clean energy and resiliency, even as it continues to focus its public statements on more salient issues.