March 2, 2020

House Democratic Climate Proposals Series: National Climate Program

Holland & Knight Energy and Natural Resources Blog
Beth A. Viola | Stephen J. Humes | Isabel C. Lane

In an eight-part series, we will examine initiatives outlined in recent congressional Democratic climate proposals, particularly the Climate Leadership and Environmental Action for our Nation's (CLEAN) Future Act introduced by House Energy and Commerce Committee Democrats and the Moving Forward infrastructure framework developed collectively by House Democrats.

The House Energy and Commerce Committee's CLEAN Future Act is draft legislation featuring specific details on a national program, including a climate target aiming for net-zero emissions by 2050. This approach seeks to align the federal government and states in pursuit of this economy-wide goal with a cross-sector, unified program. The proposal includes directives for all federal agencies and states to develop plans to achieve the target by the deadline while also establishing a national climate bank to help finance the transition.

National Target

The net-zero 2050 target is considered moderate compared to the Green New Deal, which aims for net-zero emissions by 2030. In attempting to reach this objective, the CLEAN Future Act affords significant authority to the U.S. Environmental Protection Agency (EPA), designating it as the lead agency for coordinating the economy-wide climate initiatives. Under the legislation, EPA would be in charge of reviewing federal agency plans and monitoring progress toward the national goal. EPA's monitoring would be informed by recommendations from the National Academy of Sciences (NAS) for methodology on tracking emissions reductions across numerous sectors: power, transportation, buildings, industrials and more.

State Plans

In tandem with the federal government's initiatives, the CLEAN Future Act establishes a program whereby states must develop and submit individual climate plans to reach the net-zero emissions goal. To assist in the development of these plans, EPA would be required to develop models for emissions control strategies, including:

  • a climate pollution phaseout control program
  • a performance-based fuels standard
  • carbon removal control strategies
  • energy efficiency control strategies
  • plan provisions to adopt and enforce California's low- and zero-emission vehicle regulations

Though Republicans have generally opposed climate-related mandates, the legislation does strike a few bipartisan chords. By allowing states to develop individual climate action plans, the plan alludes to a federalist approach better for varying geographic regions to evaluate and select the best approaches to climate policy given resource availability and constraints. This approach echoes that taken by the Obama Administration in its Clean Power Plan, a regulation to limit carbon emissions from power plants, which also required states to develop and implement plans to comply. While the CLEAN Future Act is considered a Democratic bill and does not count any Republicans as supporters at present, the state-based approach at least affords a framework that nods toward opportunities for bipartisan negotiation. Even more directly, the carbon removal control strategies listed above could include carbon capture technologies, an approach to emissions reductions supported by Republicans and Democrats alike.

National Climate Bank

The bill also includes numerous funding mechanisms to help states, agencies and other parties transition. The most notable of these is the establishment of a National Climate Bank to facilitate commercialization and deployment of emissions reductions. The bank would be authorized at $10 billion in the first year and $5 billion annually for five years thereafter. Initiatives eligible for finance include low- and zero-emissions energy technologies; renewable energy generation; building efficiency and electrification; industrial decarbonization; grid modernization; agriculture projects; clean transportation; and climate-resilient infrastructure.

The bank, governed by a board of directors, would be afforded broad discretion in its investment and financing approach – everything from loan programs to debt financing to aggregation and warehousing. It would also include a startup division to help launch new state and local green banks, with an emphasis on communities disproportionately affected by climate change.

The seven-member board is proposed as an initial mix of three bipartisan presidential appointees with five-year terms and four members subsequently elected by the appointed members with three- and four-year terms. This structure all but guarantees the board would initially be dominated by members of the president's political party – presumably a Democrat if the CLEAN Future Act were enacted. After the initial board, future directors would be internally elected by the existing board, likely perpetuating Democratic control regardless of the party in power. Visit the Green Bank Network for more information on existing green banks and similar investment funds.

Read the next post in the series here.

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