Democrats Articulate a Climate Change Vision

Introduction

On June 30th, Democrats on the House Select Committee on the Climate Crisis released a comprehensive climate change report, which established a goal of reaching net-zero greenhouse gas (GHG) emissions.

While the Select Committee does not maintain any actual legislative authority, the Democratic staff report includes over 100 legislative recommendations for multiple House Committees. In some respects, the report’s recommendations expand beyond just merely climate change, addressing environmental justice, water infrastructure and job creation.

The Select Committee’s report comes amidst a busy several weeks with respect to Democrats articulating a vision for climate change. Former Vice President Joe Biden, the presumptive Democratic Presidential nominee, released on Tuesday an updated clean energy and climate change plan that aims to achieve no later than 2050 a net-zero economy. Among other provisions, Biden proposes requiring that utilities generate 100 percent of their electricity from non-emitting sources by 2035. Biden’s proposal largely mirrors recommendations released by a Biden-Sanders Unity Task Force on climate change that attempted to reconcile the moderate and progressive wings of the Democratic Party. And, House Democrats, on July 2nd, passed H.R. 2, The Moving Forward Act, a US$1.5 trillion infrastructure package that extends renewable tax incentives and invests US$70 billion in clean energy.

As to the House Select Committee report, the majority of the legislative recommendations are unlikely to be passed into law this year. Yet, the report could serve as the basis for a climate change legislative agenda next year, especially if the Senate and Presidency come under Democratic leadership.

The House Select Committee report includes recommendations for tax credits, market reform, clean energy standards, grid modernization, nuclear energy industry, natural gas development, carbon pricing, federal procurement, carbon capture, transportation, environmental justice, and agriculture. Below is a summary of some of the key recommendations in each of the areas.

Tax Credits

• Extends the Production Tax Credit (PTC) and the Investment Tax Credit (ITC) for renewables.
• Extends the offshore wind ITC at 30 percent and establishes an ITC for energy storage.

Market Reform

• Amends the Federal Power Act to provide that rates that do not incorporate the cost of CO₂ emissions are unjust, unreasonable, unduly discriminatory and/or preferential.
• Directs the Federal Energy Regulatory Commission (FERC) to conduct rulemaking that would require ISOs/RTOs better integrate renewable energy, battery storage, distributed energy resources, and demand response.

Clean Energy Standard (CES)

• Requires that utilities provide 100 percent clean energy by 2040. The report states that clean resources include renewables, hydro, nuclear and sources employing carbon capture.
• Clarifies that a federal CES would not preempt state clean/renewable energy standards.

Grid Modernization

• Clarifies that FERC can exercise backstop siting authority for interstate electric transmission facilities within a National Interest Electric Transmission Corridor.
• Establishes a DOE program to support states and local governments siting electric transmission lines.
• Directs FERC to promulgate incentives to improve the capacity and efficiency of the bulk electric transmission system.
• Authorizes DOE funding to identify and evaluate climate-related risks to electric grid infrastructure.
• Establishes a competitive grant program for state and local governments to invest in technologies and strategies to improve the resilience of the electric distribution system.

Nuclear

• Directs the Department of Energy (DOE) to support small modular reactors through research and development, federal financing, loan guarantees or pilot programs.
• Directs the Nuclear Regulatory Commission to increase inspections at aging nuclear plants.

Natural Gas

• Reinstates Obama-era Environmental Protection Agency (EPA) standards on methane emissions associated with new and modified oil and gas sources. The report also calls for reinstating an Obama-era Bureau of Land Management (BLM) rule, which set limits on methane emissions from oil and gas sources operating on federal lands.
• Directs EPA and BLM to conduct rulemakings to achieve reductions of methane emissions from new and existing oil and gas sources of 65-70 percent by 2025 and 90 percent by 2030. In addition, the report directs EPA and BLM to prohibit the use of routinely flared gas at oil wells.
• Requires that natural gas pipeline operators install technology to mitigate leaks and report any leaks immediately. The report also increases civil penalties for violations of federal safety laws and regulations.
• Amends the Natural Gas Act to clarify that FERC must consider upstream and downstream natural GHG emissions associated with interstate natural gas pipelines and LNG facilities and bolsters protections for landowners.
• Eliminates current exemptions that the oil and gas industry enjoys to the Clean Air Act, Clean Water Act and the Resources Conservation and Recovery Act.
• Ends tax incentives for oil and gas production.

Carbon Pricing

• Places (but does not specify) a price on CO₂ emissions and states that any carbon pricing regime should be structured to support energy-intensive, trade exposed industries and low- and medium-income households. The report emphasizes that the imposition of carbon pricing should not be used to provide liability protections to large emitters.

Federal Procurement

• Directs the federal government to purchase 100 percent of its electricity needs from clean sources by 2040.

Carbon Capture

• Bolsters DOE funding for technologies, including carbon capture, that reduce industrial emissions.
• Expands existing 45Q carbon capture tax credit and enacts a separate ITC specifically for carbon capture and utilization projects.

Transportation

• Directs EPA to create new GHG emission standards for passenger vehicles, light-duty vehicles, and trucks, along with medium- and heavy-duty vehicles. The report would also allow states to adopt and enforce California’s motor vehicle emission standards.
• Establishes a technology-neutral national zero-emission vehicle (ZEV) sales standard to ensure all light-duty vehicles sold by 2035 are zero-emission and expedite the use of zero-emission vehicles in industries that have zero-emissions vehicles available.
• Develops a Low Carbon Fuel Standard to build on the Renewable Fuel Standard (RFS) to institute a technology and feedstock neutral benchmark that would lower the carbon standard over time based on lifecycle assessment of carbon intensity fuels.
• Increases the per-manufacturer cap on the electric vehicle tax credit.
• Invests in research, development, demonstration and deployment to develop new zero-emission technologies for manufacturing in the transportation sector .
• Directs EPA to set GHG standards for new and existing aircrafts.
• Creates a new program within the Department of Transportation (DOT) to share costs with state and local governments and private sector technology developers to deploy resilient solutions for public transit electrification, including smart grids.

Environmental Justice

• Doubles EPA’s enforcement budget and directs the agency to make environmental and climate justice one of its enforcement and compliance assurance priorities.
• Directs DOE to identify best practices to increase electric vehicle supply equipment deployment in environmental justice and vulnerable communities.
• Directs the EPA to develop a methodology to assess the cumulative and disproportionate impacts of pollution on environmental justice communities to incorporate into agency decision-making.
• Directs EPA to ensure that individuals in affected environmental justice community are involved in the development of environmental projects in their communities.
• Creates a grant program to support Historically Black Colleges and Universities, tribal colleges, and other Minority Serving Institutions establishing environmental and climate justice centers.

Agriculture

• Modifies existing US Department of Agriculture (USDA) programs to encourage farmers to employ practices that increase carbon sequestration and reduce GHG emissions.
• Directs the Department of Treasury and USDA to study federal tax credits to incentivize carbon sequestration and GHG reduction on farms.
• Establishes a grant program to provide states and tribes with funding for soil carbon sequestration programs to support healthy soil initiatives.
• Directs USDA to provide additional grant funding or equipment rental loans for farmers to transition to low-emissions equipment.
• In addition to these recommendations, the report includes legislative recommendations relating to public health, climate resiliency, international climate change engagement, confronting climate risks to US national security and bolstering the climate science, among other proposals.

In addition to these recommendations, the report includes legislative recommendations relating to public health, climate resiliency, international climate change engagement, confronting climate risks to US national security and bolstering the climate science, among other proposals.