No meaningful climate policy possible via budget reconciliation due to Manchin opposition
Despite support from some of the nation’s largest investor-owned electric utilities and more than 400 solar and storage companies for clean energy investments and incentives included in a pending budget reconciliation package, U.S. Senate negotiations Thursday came to a screeching halt.
The lawmaker holding the package hostage is U.S. Sen. Joe Manchin, the conservative-leaning Democrat from West Virginia whose family is in the coal business.
Manchin said he told Senate Majority Leader Chuck Schumer (D-NY) on Thursday that he wants to wait to see the July inflation figures “‘so we know that we’re going down a path that won’t be inflammatory, to add more to inflation,’” Manchin recounted during a radio interview Friday morning on Talkline.
“This is a difficult blow to prospects for enacting comprehensive climate legislation that the American people want and scientists say we desperately need,” said Gregory Wetstone, president and CEO of the nonprofit American Council on Renewable Energy (ACORE), in a statement today.
Absent new legislation, Wetstone said the renewable sector will not grow at the pace needed to address the climate imperative.
“Tax incentives for renewable energy phase down and largely out in today’s tax code, while century-old fossil fuel incentives remain permanently in place,” he said. “We need a level playing field for the renewable sector and a 21st-century grid to reliably power our economy. Failure is not an option.”
Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association (SEIA), said the industry also holds out hope, however slim, that members of Congress will see the urgency of this moment and do what needs to be done to pass meaningful climate and clean energy legislation this year.
“Clean energy policy also fights inflation,” Hopper said Friday. “Without sustained policy, meeting solar and storage goals of building a one-million-person workforce, growing an industry that will invest hundreds of billions of dollars in our economy and providing clean energy for all Americans becomes even more challenging.”
Manchin’s stall strategy in an evenly divided Senate effectively ended budget reconciliation negotiations, sending requests to pass the package from Exelon Corp., Pacific Gas & Electric Co. (PG&E), and Public Service Enterprise Group, as well as hundreds of companies organized by SEIA, down the drain.
“Climate change is exacerbating volatility for businesses and families, supply chain disruptions, water shortages, negative health outcomes, and damage to critical infrastructure — all contributing to increased costs and insecurity for consumers and the economy,” the utilities wrote in a July 11 letter sent to Senate leaders. “Our companies are proactively shifting to clean energy and investing in energy efficiency to reduce emissions, lower costs, and make our operations more resilient.
“But corporate action alone is insufficient to meet the scope and scale of the climate crisis and deliver benefits to all,” they wrote, adding that the federal government must reduce costs and climate-related risks across the economy and seize the economic opportunities in clean energy innovation, manufacturing and deployment leadership.
The utilities, which were joined in signing the letter by Levi Strauss & Co., VF Corp., Logitech, and Danone North America, urged the senators to swiftly agree on and pass the ambitious package of climate, clean energy and environmental justice provisions, specifically seeking inclusion of investments that would provide a long-term market signal, increase productivity, strengthen resilience, and reduce emissions in a cost-effective way, according to their letter.
For example, such investments for clean energy, sustainable transportation and energy efficiency incentives could help the United States decrease its emissions and achieve better price stability and energy security, the companies wrote.
They also cited investments to expand domestic supply chains and bolster American industrial capacity to develop and deploy key innovative technologies that would help make the U.S. a global leader, create high-paying jobs in rural, disadvantaged, and frontline energy communities, increase exports, and strengthen national security.
Likewise, they called for climate-smart agriculture and forestry incentives to help safeguard food production and boost rural development.
“A reconciliation package that includes these investments and reduces the deficit will help us combat inflation and bend down the cost curve for consumers’ bottom lines right away,” wrote the utilities and others. “We recognize that these investments will require raising additional revenue. It’s easy to focus on the cost of climate action, but the increasing severity and frequency of unprecedented and costly extreme weather events make it crystal clear that the cost of inaction is far higher.”
At the same time, the SEIA’s July 12 letter signed by 400+ groups called on President Joe Biden and Senate leadership to also pass measures that would “help build a cleaner, cheaper and more secure domestic energy future for all Americans.”
“Please pass the tools in reconciliation to help us make that possible,” wrote the signers from solar, storage and other clean energy industries, including AES Clean Power, California Solar Electric, Arcadia Power, Aegis Renewable Energy, Black Bear Energy Inc., and Infiniti Energy LLC, US Solar, among hundreds of others.
Nevertheless, those requests and suggestions have seemingly fallen upon deaf ears for the foreseeable future.
Manchin reportedly told Schumer on Thursday night that he “unequivocally” rejects approval in July or August of Democrats’ proposed energy investments and tax increases, ending weeks of negotiations over the larger package and possibly disabling Democrats’ chances of sending a bill to Biden’s desk to be signed into law.
Manchin was primarily responsible for doing the same thing last year during reconciliation negotiations when he voiced concerns about the negative impact on fossil fuels.
ACORE’s Wetstone said the industry hasn’t given up. “We will continue to work with Congress to find a path forward to salvage as much of the clean energy tax package as possible, either in this bill or a different legislative vehicle,” he said.
“While we are deeply disappointed, we ask that members of Congress stay at the table for as long as it takes, by whatever political machinations necessary, to get clean energy policy over the finish line,” added SEIA’s Hopper.
