Cornerstone Climate Policies Being Negotiated Down to the Wire in Budget Bill Debate

Senator Manchin speaks against the CEPP

As the Senate negotiates down to the wire over the President's climate package in his budget, it remains unclear which climate measures will end up in the final package before COP26. One important climate measure, the Clean Electricity Performance Program (CEPP) appears to be on the chopping block. Senator Joe Manchin III (D-WV) opposes the CEPP, telling the White House he strongly opposes the program, and putting him at odds within his own party. How Democrats would replace this measure in a final package remains to be seen, but negotiations are ongoing including the possibility of growing the size of clean energy tax credits.

US Climate Envoy John Kerry has said failure to pass an ambitious climate program could be devastating, "like President Trump pulling out of the Paris Agreement, again." but expressed confidence this week that something bold would ultimately be passed.

Why This Matters

The CEPP is the cornerstone of climate initiatives in the budget bill, and if passed could potentially be one of the most influential pieces of climate legislation in US history. Combined with clean energy tax credits, the CEPP could account for 42% of Biden's 2030 emissions reduction targets. That said, any overall package of climate investments being considered would be the largest federal climate investment in US history, and the largest since the 2009 American Recovery Act.

MSNBC: Manchin Pulls Plug On US Clean Electricity In Biden Budget Bill - NYT, October 16, 2021.

Mother Jones: Manchin Is Considering Leaving the Democratic Party -- and He Has an Exit Plan, October 20, 2021

Reaching an Impasse

The CEPP would reward utilities that increase their share of clean energy by at least 4% each year, including nuclear, hydroelectric, geothermal, solar, and wind power. Those rewards would be collected from a $150 billion grant program created by CEPP. Meanwhile, companies that fall short of the 4% goal will be penalized $40 for every megawatt-hour of clean energy they fail to produce, and be expected to make up for it the following year.

Sen. Manchin -- the last remaining coal-state Democrat left in the Senate -- is spearheading the move to block the CEPP, arguing it will hinder the nation’s energy independence, and that paying companies to do what they're already doing themselves is a waste of funding.

But Senator Ed Markey (D-MA) said that climate change would charge a much higher price.

We can't negotiate with deadly wildfires… We cannot negotiate with massive hurricanes… We can't negotiate with floodwaters, sea-level rise and drought, and temperature rise. We can't negotiate how much these climate-fueled disasters are costing us, tens of billions of dollars so far this year.

Adding that cutting CEPP wouldn't just be political -- it would be a rejection of science, he said, "It's time for us to stop talking about what is politically feasible, and start talking about what is scientifically necessary -- we cannot compromise on science."