Summer 2022 has been a rollercoaster for climate advocates in America.
On June 30, the US Supreme Court ruled, in West Virginia v. EPA, that the EPA cannot set up an emissions trading program to lower power plant carbon emissions, without getting legislative approval from Congress. The decision took away a powerful tool that could have been used to bring down emissions in a carbon-heavy sector. It also signaled the potential rise of a legal view that may stifle climate regulatory efforts going forward.
A few weeks later, in July, Senate Democrats were forced to remove $300 billion in clean energy tax credits from the reconciliation bill when Senator Joe Manchin announced he would not support the measure. The move was criticized by climate advocates and seen as the end of the Build Back Better bill.
Down and Up
Then, when it appeared that any chance for Congressional action on climate change or energy policy was lost, Senator Manchin made a deal with his colleagues.
The new legislation Manchin helped craft with Senate Majority Leader Chuck Schumer (D-NY), titled the Inflation Reduction Act of 2022, contains $369 billion in climate-related spending including:
- $30 billion in tax credits for manufacturing solar panels, wind turbines, batteries, and critical minerals processing
- $20 billion in loans to build new clean vehicle manufacturing facilities
- $10 billion investment tax credit to build clean technology manufacturing for electric vehicles, wind turbines and solar panels
In addition, as part of the package, the EPA will receive $41.5 billion in funding. This new spending will go to support efforts to cut methane and other greenhouse gases, lower air pollution in ports, and help low-income and disadvantaged communities respond to climate change.
Although Manchin had been criticized in July, the compromise he put together in August was applauded by climate advocates and hailed by legislators as the biggest climate bill ever passed by Congress. Once fully implemented the climate provisions will cut greenhouse gas emissions to 40 percent below 2005 levels by 2030.
Oregon Senator Ron Wyden, who chairs the Senate Finance Committee, praised how the bill’s changes to the tax code will encourage the development of new clean energy technologies and create jobs. Manchin’s colleague Tina Smith (D-MN) summed up the feelings of many climate activists and lawmakers when she tweeted, “Stunned but in a good way. $370B for climate and energy and 40% emissions reduction by 2030. BFD.”
Even as legislators celebrate this moment there is still much to do on the policy front. The legislation is still short of the 50-52% reduction pledged by Biden in 2021. It also contains provisions that concern climate advocates including new tax breaks and subsidies for fossil fuel companies over the next 10 years. At the same time, the bill allows up to 700 million acres of public lands and waters to be used for oil and gas drilling.
Despite these flaws, On August 7, by a vote of 51-50, the Senate approved the bill and sent it to the House of Representatives where it was passed on August 12.
Twists and Turns
While we saw a last-minute change in Congress there is no such luck in the courts. By using the Major Questions doctrine to strike down the EPA’s power plant emissions trading program the Court has put us in an uncertain regulatory environment. It is not clear what future regulatory efforts will be challenged under this theory and how the court will rule.
Right now, what we do know is that the EPA, and the US Federal Government, still have many ways to address climate change but not the only way. In a recent discussion, Dena Adler, a Research Scholar at the Institute for Policy Integrity at NYU School of Law pointed out that the EPA can still regulate climate pollution from new and existing power plants, other stationary sources, and the largest source of greenhouse gases in the U.S. today, motor vehicles.
In addition to the EPA, the ability of the federal government to act on climate change has been pushed by President Biden. Since taking office he has used a series of executive orders to address climate change and support the energy transition. Recently, the White House announced the Interior Department is proposing the first wind energy areas in the Gulf of Mexico, which could entail 700,000 acres. Biden is also directing Interior Secretary Deb Haaland to advance offshore wind energy development in Florida’s Gulf Coast, the mid-Atlantic and southern Atlantic Coast and Florida’s Gulf Coast.
There is also talk that President Biden* will declare a national emergency over climate change. Politico reports that doing this would enable the President to, “unleash sweeping actions to restrain greenhouse gas production — such as banning U.S. crude oil exports, ending offshore drilling or speeding the manufacturing of electric vehicles.”
If the last few weeks have shown us anything it is that climate policy can change very quickly. In this moment, climate advocates face the following questions:
- After passing a big climate bill what more can Congress do to address the problem?
- What executive actions will President Biden take going forward?
- How will the Supreme Court’s use of the Major Questions doctrine impact future regulatory efforts?
- What impact will the November elections have on climate policy at the state and federal level?
How each of these questions is answered will tell us just how much the wild ride of summer 2022 will impact America’s efforts to fight climate change in the coming years.
*As of the publishing of this piece President Biden has not acted on this matter.
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