(Bloomberg) — Congress should enact a clean-electricity standard that forces utilities to pare greenhouse gas emissions, but if lawmakers fail to deliver, the administration is prepared to act on its own, President Joe Biden’s climate chief told Bloomberg.
A clean-electricity mandate is critical for catalyzing emissions reductions, White House National Climate Adviser Gina McCarthy said during a taped discussion for the Bloomberg Sustainable Business Summit that opened Tuesday. But she refused to say the requirement is a must-have ingredient in a broad tax-and-spending bill meant to build on a bipartisan infrastructure package.
“I don’t want to say that anything is a red line, because, frankly, a lot of the work that went into the bipartisan infrastructure plan was really building a tremendous foundation for us to grow on,” McCarthy said. “We have lots of regulatory authority that we intend to use regardless, and we will move forward with those efforts to try to tackle the climate crisis.”
Biden has vowed to decarbonize the electricity sector by 2035, and a clean-energy standard is seen as a vital tool for achieving that goal as well as the U.S. pledge under the Paris climate accord to at least halve the nation’s planet-warming pollution by 2030. But the mandate was left out a bipartisan infrastructure package negotiated with Republicans, and now administration officials are pushing to include it and a raft of renewable energy incentives as part of a separate tax-and-spending plan.
McCarthy’s comments come even as some Democrats are doubling down on their insistence that major climate initiatives must be part of the forthcoming legislation.
“The issues of climate change and infrastructure cannot — cannot — be separated from one another,” Senate Majority Leader Chuck Schumer, a New York Democrat, said Tuesday on the Senate floor.
McCarthy stressed the importance of Congress advancing an array of climate policies — including longer-lasting and more-effective renewable tax credits that complement a utility-focused mandate. Expanded tax incentives “just means we have businesses ready,” McCarthy said. “What the clean-electricity standard says is ‘Go — don’t wait, go — because we are going to put you on a schedule that says you get out of the gate and run, and you keep running.”
“Without that, there’s going to have be a regulatory strategy to move that forward,” McCarthy said, “and I think we all can agree that a clean-electricity standard can actually be that motivator out of the gate that will allow us to get the kind of impacts at scale that we really need to have now.”
Even without Congress, the Biden administration is moving to write rules clamping down on greenhouse gas emissions from automobiles, power plants and oil wells. And other policies are under consideration — including a border adjustment tariff that could be levied on carbon-intensive imports, like an approach set to be unveiled by the European Union. Still, a U.S. mandate for emission-free power would be tough to construct through federal regulation alone.
The administration faces both procedural and political challenges in enacting a clean-energy mandate through a fast-track budget reconciliation bill that allows some tax-and-spending measures to advance on a simple majority vote, without dying in the face of a Republican filibuster in the evenly-divided Senate.
Crafting an electricity industry mandate that fits into those narrow procedural requirements — and wouldn’t be ruled out as an extraneous non-budgetary matter — could require policy contortions by Democrats. Some environmentalists are coalescing around an option that would involve imposing annual clean-energy targets on electric utilities, and creating a system of incentives and penalties for the companies based on their success in meeting them.
The administration also must keep Democrats united behind the plan — including moderate senators such as Kyrsten Sinema of Arizona and Joe Manchin of coal-rich West Virginia. Funding for job transitions and ensuring a vibrant economic future for coal communities already feeling the effects of that fossil fuel’s declining market share are critical, McCarthy said.
“I think it’s been really important for Senator Manchin to both see that there is a future being built here that he can support to reinvigorate manufacturing and to bring economic development to his communities,” McCarthy said. “I think there’s every opportunity in the world to keep Senator Manchin not just communicating and talking but feeling good about the investments that are being made. His state needs it as much as any other — if not more.”
–With assistance from Steven T. Dennis.
© 2021 Bloomberg L.P.
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