For months, a key provision of the Biden climate plan has been a program called the Clean Electricity Performance Program. It would have incentivized utility companies to make the switch to clean energy with penalties for those that don’t move fast enough.
The idea appears to be dead for now amid opposition from West Virginia Senator Joe Manchin. It had been included in early versions of the reconciliation package with Democratic lawmakers – like Energy and Commerce Committee Chairman Frank Pallone, Jr. (D., N.J.) – calling it a landmark provision at the time that “provides a groundbreaking $150 billion to help us meet our clean energy goals.”
The question now is whether the Biden administration can still reach its goals without the program and, in a conversation this week for Yahoo Finance’s All Markets Summit: The Path Forward, White House National Climate Advisor Gina McCarthy laid out the administration’s case for why the answer is yes.
“We have a lot of ways to get over the finish line,” she said, citing tax credits, provisions in the transportation sector around electric vehicles, and other “opportunities” in manufacturing, ports and environmental justice.
“While the CEPP was a really exciting opportunity,” McCarthy said, “no matter how you cut it, there are pathways to achieve these kind of reductions.”
The frantic final negotiations over the larger bill, a centerpiece of Biden’s economic and climate agenda, comes ahead of the 2021 United Nations Climate Change Conference (COP26) where world leaders will gather in Glasgow to roll out new commitments to limit global warming worldwide.
As for CEPP, “it was a big deal,” said Trevor Higgins, Senior Director of Domestic Climate and Energy Policy at the Center for American Progress, a progressive think tank allied with the Biden White House. He told Yahoo Finance on Tuesday there are still ways to get there, but now “there’s very little margin for error.”
He pointed to a recent report from the Rhodium Group, which found the Biden administration can meet an early goal – a 50%-52% cut in U.S. greenhouse gas emissions by 2030 – without the CEPP.
The Biden administration has a series of ambitious goals beyond the 2030 target: a carbon pollution-free power sector by 2035 and a net-zero emissions economy by 2050.
“This is going to be done,” McCarthy said.
Another advocate in the field is Sam Ricketts, who served as climate director for the presidential campaign of Gov. Jay Inslee and more recently co-founded a group called Evergreen Action.
“There is a hole that must be filled” with the loss of the CEPP, Ricketts told Yahoo Finance, underscoring the fact that the Biden administration can do a lot more on its own.
“In addition to legislative action, the administration is going to need to be aggressive with its existing authorities,” he said, citing both possible executive actions as well as encouraging more leadership from states.
'We know how to do this'
The White House is also reportedly eyeing different approaches to climate in the final bill with more incentives to encourage the transition to clean energy, like expanded grants and loans in the agriculture and industrial sectors, as well as home improvement tax credits.
McCarthy highlighted the tax credits in particular, noting there “are tax credit opportunities in this package that are going to” help push the sector to make the transition. “We know how to do this,” she said. Democrats have proposed $273 billion in tax credits to achieve Biden’s climate goals in addition to programs like the CEPP.
In a recent town hall Biden said that the money that was allocated for CEPP should be redirected. “The fact of the matter is we can take that $150 billion, add it to the $320 billion that's in the law now that [Manchin] is prepared to support,” he said.
As negotiations continue, it’s unclear whether all 50 Democratic senators will support the idea of redirecting that money or would prefer to simply remove it. But Ricketts points out the money could go to a range of places, such as the power sector, the industrial sector as well as provide federal money to states to bump up their climate efforts.
In any case, McCarthy promises that "we are going to keep pushing until we get the kind of investments that match our ambition.”
Ben Werschkul is a writer and producer for Yahoo Finance in Washington, DC.
Democrats want $273 billion in tax credits to achieve Biden’s climate goals
Read the latest financial and business news from Yahoo Finance
Follow Yahoo Finance on Twitter, Facebook, Instagram, Flipboard, LinkedIn, YouTube, and reddit.