Democrats scramble to give Biden a climate win ahead of COP26 summit

By Ari Natter on 10/26/2021

WASHINGTON (Bloomberg) - Negotiations over the climate provisions in the Democrats’ spending bill have accelerated and are focused on a package of measures that could replicate the emissions reductions of a clean energy plan dropped from the draft legislation.

The new proposals would expand grants and loans in the agriculture and industrial sectors to help them shift to clean energy providers with fewer emissions, according to a senior Biden administration official who requested anonymity to share the plans.

The White House discussed the proposals Monday with leaders of environmental and justice groups, according to the official. The new strategies appear to rely on incentives to encourage clean energy use rather than penalties for failing to make the transition, which could help win over West Virginia Senator Joe Manchin who holds a swing vote.

“We’re working. Hopefully in a very positive direction,” Manchin said Tuesday of the state of negotiations over the multi-trillion-dollar social spending bill Democrats plan to move in coordination with a bipartisan infrastructure measure that’s already passed the Senate.

Democrats are racing to finalize something tangible for President Joe Biden to present when he heads to the United Nations climate summit that begins Sunday in Glasgow, Scotland.

Tax credits for electric vehicles remain under discussion, as is an expansion of breaks for renewable energy while the fate of a fee on methane is still under discussion, according to Senators who met on the Capitol Monday night.

A major priority for the White Houses, an expansion of a tax credit for electric vehicles, remains in the bill, though discussion about the details of it are continuing, Senator Gary Peters, a Michigan Democrat, said as he emerged from the session in the Capitol with Majority Leader Chuck Schumer, Manchin and other senators.

Democrats have proposed various tweaks to the $7,500 credit, including increasing its value for autos made by unionized plants and using American-made parts.

A tax credit for hydrogen was also discussed at the meeting, Peters said. Energy companies and others are increasingly looking at hydrogen as a possible carbon-free fuel, for cars, trucks and ships as well as heating buildings. The cost of producing it, however, remains a barrier.

A proposed fee on the emission of methane, a powerful greenhouse gas that’s 84 times stronger than carbon dioxide, remains under discussion, said Senator Tom Carper, a Delaware Democrat.

“My hope is it’s going to be in. We’ve negotiated a methane fee,” Carper, who chairs the Senate Environment and Public Works Committee, told reporters. “We’ve tried to do it in a way that Senator Manchin as his folks will be more receptive of it. We’re still talking. We’ll continue to talk tomorrow.”

Democrats in the House have proposed a $1,500-a-ton fee on methane, which is emitted by drillers and others in the oil and gas industry, but it’s come under fire from groups such as the American Petroleum Institute, the Chamber of Commerce, and other groups who argue it would cripple an entire industry and affect thousands of workers.

Asked if he would support such a fee, Manchin, a swing vote in the talks who in the past has voiced support for regulating the pollutant, didn’t respond.

“I think there are ways we can still be pretty aggressive on a variety of fronts,” Peters said. “We can still be very aggressive on climate looking at other aspects. We are all working on that.”

Manchin, Peters said, “was very open to the discussion. It was a very fruitful discussion.”

Hundreds of billions of dollars in tax breaks for wind, solar and other renewable energy sources could be increased after a $150 billion program to spur utilities to use more clean energy fell under opposition from Manchin, said Senator Ron Wyden, an Oregon Democrat who leads the Senate’s tax writing committee.

Among the options being considered were doing more for a proposed tax credit for energy storage and transmission projects, Wyden told reporters Monday.

“The committees are looking at ways we can step up,” Wyden told reporters. “I think we can do even more. We want the president to go to Glasgow with a strong a position in terms of major climate change.”

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