A sustainable climate deal

Presented by CEO Climate Dialogue:

Jul 29, 2022 View in browser   By Debra Kahn Presented by THE WEEK THAT WAS Manchin and Schumer made a deal. | Patrick Semansky/AP Photo MANCHIN MADE A DEAL — After a year of will-he-won't-he vacillating, Sen. Joe Manchin (D-W.Va.) got on board Wednesday with a massive package of tax credits for climate-friendly technologies that could reduce U.S. emissions by 40 percent in the next 8 years. Why did Manchin suddenly come around to including $369 billion for renewables and electric vehicles in the Democratic budget reconciliation bill? The key word is "balance," as Nick Sobczyk reports for POLITICO's E&E News: "I think that we've hit a balance," Manchin, who is still recovering from Covid-19, said during a virtual news conference Thursday. "This is not a Democrat bill, this is not a Republican bill. This is an American bill." In a radio interview Thursday, Manchin said he focused on including benefits for fossil fuels because most Democrats didn't appreciate that their climate goals would only work if the United States was energy independent. "It's hard to get people to even think that way, because they were so aspirational — 'Get rid of all fossil, get rid of all coal, get rid of all oil, get rid of all gas, get rid of everything,'" he said. "Yeah, and it would go to hell in a handbasket." The language would mandate lease sales in the Gulf of Mexico and off the coast of Alaska, as well as tying together federal leasing for renewables and oil and gas. The Center for Biological Diversity called its decision to "handcuff" renewables and petroleum together a "climate suicide pact," as E&E's Scott Waldman writes . And transit advocates are worried its heavy focus on EVs over rail, transit and bicycles could help "lock in highway dominance," POLITICO's Alex Daugherty reports . But it's what Manchin, the fulcrum of the Senate, can live with. Call it politically sustainable. "I think we have to be realistic about what is achievable and take the wins we can get," said Michael Wara , director of Stanford University's climate and energy policy program, who pointed out that offering more leases isn't a guarantee that they'll be drilled, especially with more renewables and EVs coming online to compete. "It's not over. Come back next year and fight for more." Caution: It's not a law yet. And it contains plenty that other senators might not like — see changes to carried interest, a tax break for the private equity and hedge fund industries that Sen. Kyrsten Sinema (D-Ariz.) has previously protected, POLITICO's Marianne LeVine, Anthony Adragna and Burgess Everett note . "I have tremendous respect for [Minority Leader] Sen. [Mitch] McConnell's abilities," Wara said. "And I don't trust the marginal votes on the Democratic side to sleep well enough until there's actually legislation that has passed." More good news for Biden: Gas prices are falling fast, leaving enough of a cushion before the midterms to blunt Republicans' attacks. POLITICO's Ben Lefebvre has more .   A message from CEO Climate Dialogue: 22 top companies 4 leading NGOs 1 unified goal—Advancing market-based climate policy in the U.S. that will: · Reduce carbon emissions and put us on path to NetZero by 2050 · Accelerate the transition to a low carbon economy · Bolster investment and innovation in clean energy technologies · Increase U.S. economic competitiveness · Promote Equity · Create American jobs Learn more about the CEO Climate Dialogue   SUSTAINABLE FINANCE GREEN BANK BOOST — Another facet you might have missed: The bill's creation of a federal green bank to finance clean-energy investments for low-income households and small businesses. The language would give EPA $20 billion for competitive awards to nonprofit lending institutions for community-based clean energy investments. States, municipalities and tribal governments could share an additional $7 billion in funding under the program. Green banks are on the rise nationwide, with 23 of them in 17 states. The proposal for a national green bank has passed the House three times. But backers said they assumed the plan had died with Manchin's opposition to Biden's much larger "Build Back Better" legislation. Pete Behr for POLITICO's E&E News has more .   INTRODUCING POWER SWITCH: The energy landscape is profoundly transforming. Power Switch is a daily newsletter that unlocks the most important stories driving the energy sector and the political forces shaping critical decisions about your energy future, from production to storage, distribution to consumption. Don't miss out on Power Switch, your guide to the politics of energy transformation in America and around the world. SUBSCRIBE TODAY .     BUILDING BLOCKS Tesla cars charge up. | (Photo: Business Wire) CHAIN OF FUELS — Transit advocates might not need to worry too much about the package's EV credits just yet, as POLITICO's E&E News' Jael Holzman reports . They're tied to requirements that the EV components are made with a certain percentage of minerals mined or processed in nations with U.S. free trade agreements, or recycled in North America. That's not really a thing. Most of the minerals required to make market-ready EV batteries — lithium, cobalt, graphite and nickel — are mined, refined and processed in China, Russia or less adversarial nations like the Democratic Republic of Congo and Indonesia that aren't parties to U.S. free trade agreements. "These things aren't in place, and might not be for more than a decade," said Morgan Bazilian, director of the Payne Institute at the Colorado School of Mines. But the bill's incentives for used EVs could be an immediate game-changer, E&E News' David Ferris writes . A buyer of a used Nissan Leaf or Tesla, for example, will get a $4,000 tax credit from the purchase. The vehicle must be at least two years old. As with the new-vehicle incentive, there are income requirements, but lower: Single people up to $75,000 and married couples up to $150,000. It's the first-ever incentive aimed at used electric vehicles. "This is absolutely huge," said Andres Hoyos , a vice president at the Zero Emission Transportation Association, an EV lobbying group, calling it a "sleeper issue" that could get many more people into EVs.   A message from CEO Climate Dialogue:   YOU TELL US Happy Friday! Your host is heading to Yosemite this weekend despite the air quality . Team Sustainability is editor Greg Mott , deputy editor Debra Kahn , and reporters Lorraine Woellert and Jordan Wolman . Reach us at gmott@politico.com, dkahn@politico.com, lwoellert@politico.com and jwolman@politico.com. Want more? You can have it. Sign up for the Long Game . Four days a week and still free. That's sustainability! WHAT WE'RE CLICKING — At least 15 people died in a flood in eastern Kentucky on Thursday in what Gov. Andy Beshear (D) called an "ongoing natural disaster." — The Senate deal took the wind out of climate protesters' sails at the Congressional Baseball Game. — The U.K.'s largest landowner is scattering "moonshot" investments around the climate tech space, Bloomberg reports . — A watchdog group is raising flags about an influential Livermore Lab Foundation report on carbon capture that Michigan utility DTE Energy helped fund.   LISTEN TO POLITICO'S ENERGY PODCAST: Check out our daily five-minute brief on the latest energy and environmental politics and policy news. Don't miss out on the must-know stories, candid insights, and analysis from POLITICO's energy team. Listen today .     LOOK AHEAD Events are listed in Eastern Time. July 31 — The Association for Commuter Transport hosts its 36th annual conference from July 31-Aug. 3 in Chicago, Ill. 8 a.m. Aug. 2 — The Bipartisan Policy Center holds a discussion on "Implementing the Bipartisan Infrastructure Law at the EPA." 11 a.m. Aug. 2 — Washington Post Live holds a virtual discussion with Loretta Mester, president and CEO of the Federal Reserve Bank of Cleveland, on the Federal Reserve's plan "to tamp down on inflation and the concerns that it could induce a recession." 1 p.m. Aug. 3 — The Urban Institute holds a virtual discussion on "Baby Bonds in Context: A Systems Approach to Closing the Racial Wealth Gap." Noon. Aug. 3 — The Institute for Policy Studies holds a virtual discussion on "Can the Green New Deal Go Local?" 5 p.m. Aug. 4 — The National Oceanic and Atmospheric Administration holds a conference call to provide an update to the Atlantic hurricane outlook. 11 a.m.   A message from CEO Climate Dialogue: This is a pivotal moment for climate action in the United States that requires the public and private sectors to work together to address the growing climate crisis. Climate risks—economic, environmental, and health—continue to intensify and with it the need to put in place policies that will help us to significantly reduce carbon emissions and accelerate the U.S. transition to a low-carbon economy. As a broad-based coalition of 26 leading businesses and institutions representing multiple sectors across the U.S. economy — environmental advocacy, manufacturing, utilities, agriculture and food, energy and resources, automotive, chemicals, and financial services— the CEO Climate Dialogue recognizes this urgency and urges the Biden administration and Congress to reenergize the climate conversation and to prioritize the enactment of market-based climate policies, like an economy-wide price on carbon, that are needed to meet the scope and scale of the climate crisis. We need to act.     Follow us on Twitter Debra Kahn @debra_kahn Greg Mott @gwmott Lorraine Woellert @Woellert Jordan Wolman @jordanwolman   Follow us

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