How Manchin Affects U.S. Climate and Clean Energy Outlook

Sen. Joe Manchin (D-W.Va.) sent shockwaves through Washington and beyond last month when he seemed to close the door on supporting the Biden administration’s $1.75 trillion Build Back Better (BBB) package. Why is Sen. Manchin so important? Democrats need unified support in a 50-50 Senate amid unified Republican opposition.

What’s At Stake?

BBB calls for $555 billion in spending on climate projects and initiatives, including more than $300 billion in tax incentives for electric vehicles. Other priorities include deploying clean energy technology, capturing emissions from coal and natural gas-fired power plants, researching carbon dioxide removal from the atmosphere, and other strategies to reduce greenhouse gas emissions and accelerate the transition from fossil fuels in electricity, transportation, and other sectors.

BBB was crafted as the most aggressive federal climate and clean energy legislation to date, and it may present the last opportunity to usher sweeping U.S. federal climate leadership into law for the foreseeable future. Given the favorable electoral outlook for Republicans in the upcoming 2022 midterm congressional elections and the possibility of a new administration in 2024, it’s all on the line.

The demise of BBB would severely threaten the Biden administration’s goals of achieving 100-percent clean electricity by 2035 and economy-wide net-zero emissions by 2050. These goals are necessary for the U.S. to meet its climate obligations under the global Paris Agreement, which calls for reducing total emissions to between 50% and 52% below 2005 levels by 2030. Biden administration officials reinforced this commitment at the November COP26 climate summit in Glasgow, Scotland.

What Now?

Since his December Fox interview, Manchin has spoken to President Biden and fellow Democrats and kept the door open for a potential compromise on BBB, reportedly sending a proposal privately to the White House that included climate-related spending. (Related reading: Washington Post)

But Manchin has also consistently warned that he believes the BBB is too aggressive in transitioning from fossil fuels, as coal remains an important industry in his state. It’s interesting to note that the United Mine Workers of America has asked Manchin to stay at the negotiating table and reach a deal.

Manchin has also said BBB would subsidize electric cars for too many affluent families. Progressive Democrats are still trying to convince Manchin to at least support a suite of clean energy tax credits, but the overall figure would likely be far lower than the more than $300 billion passed by the House. It would also likely exclude credits for electric vehicles made by unionized labor that Manchin said were “not American,” and possibly a methane fee on the oil and gas sector Manchin has criticized. (Related reading: Politico)

The Biden Administration Can Still Take Some Aggressive Steps

And they’ve already started doing so. In December, the U.S. EPA finalized a new requirement for passenger car and light duty truck fleets to average 40 miles per gallon by the 2026 model year. The new rule reverses Trump administration rollbacks and is the most aggressive yet to help the U.S. shift to more electric vehicles. (Related reading: Utility Dive)

The Interior Department also approved two huge solar farms in the California desert that could eventually cover 2,700 acres and generate enough power for 132,000 homes. The project is also expected to include a bank of lithium-ion batteries to help keep the power flowing when the sun isn’t shining. (Related reading: Los Angeles Times)

And the Energy Department announced a new Office of Clean Energy Demonstrations, which will be supported by $21.5 billion from the bipartisan infrastructure package that was signed into law. The office will target technologies such as green hydrogen, carbon capture, grid-scale energy storage and small modular nuclear reactors. (Related reading: RECHARGE News)

Other possible steps include:

• Closing off more public lands to oil and gas drilling

• New power plant emission rules

• Further discouraging fossil fuel investments from financial regulators

• Declaring a “climate emergency” and opening further unchartered executive branch options (Related reading: Axios)

Congress Is Still the Long-Term Solution

With the Supreme Court potentially curtailing EPA’s ability to regulate greenhouse gas emissions and the possibility that the next administration will undo Biden’s agenda, Congress will still be the focal point of potential lasting impact.

That could mean separating out parts of the BBB climate section, most notably long-term green power tax credit extensions that may be shorter and less generous than in the current BBB plan.

Along with downsizing the renewable and clean energy incentives, a final deal would likely need to delete some climate provisions entirely.

Optimism lies in pairing a still-sizable suite of green credits with incentives Manchin has traditionally advocated for, including carbon capture technologies for fossil fuel facilities and hydrogen.