Democrats' Budget Plan Pushes A Shift To Clean Energy. Here's How It Would Work

Jul 15, 2021
Originally published on July 16, 2021 7:24 am

The $3.5 trillion budget blueprint Democrats agreed to this week includes a key part of President Biden's climate plan: a national "clean energy standard." It's aimed toward zeroing out greenhouse gas emissions from the power sector by 2035.

Often called a clean electricity standard, it would be similar to renewable energy requirements that 30 states have now. But instead of only boosting things like wind and solar, this national standard is focused directly on eliminating the greenhouse gas emissions that contribute to climate change.

There are a lot of details that still need to be worked out, but right now it looks like utilities would be required to get 80% of their electricity from zero-emission sources by 2030 and 100% by 2035.

This would be a huge change in a short time. Right now the country gets about 60% of its electricity from fossil fuels, according to the Energy Information Administration.

To pass through the Senate this has to be filibuster-proof, so Democrats are sticking it in budget legislation that needs just a simple majority to pass. And because of that, it's market-focused. Utilities likely would get incentives for adding more clean power, and have penalties imposed if they fail to do so.

Sen. Tina Smith, D-Minn., has been leading development of a national standard. She says it won't raise utility bills, and she plans "to make sure that the investor-owned utilities are using these resources to add clean power and keep utility rates stable." She says the point is "not to enrich utilities, but to make sure these incentives are used for the public good we're seeking."

The big trade group for investor-owned electric utilities, Edison Electric Institute (EEI), offered support for a "well-designed" clean energy standard. It should "recognize the role of natural gas for integrating renewables, supporting the retirement of coal-based generation, and assuring reliability as new clean, 24/7 resources become commercially available," says EEI general counsel Emily Fisher.

Smith says there likely would be a role for natural gas power plants that include carbon capture. That's controversial with some environmental and climate justice organizations that want no role for fossil fuels in the plan, only renewable energy.

"Both we as a country, and the planet, can't afford perpetuating a racist and dirty energy system," said Jean Su, the energy justice director at the Center for Biological Diversity. She opposes including carbon capture in the standard, calling it "an unproven and very costly technology that would put leak-prone pipelines and infrastructure in the same front-line communities of color already overburdened by pollution and energy burdens."

The Democrats' clean energy standard also likely will include nuclear energy. While there is the radioactive waste issue, nuclear doesn't emit the greenhouse gases that fossil fuels do.

As the Biden administration focuses on this national clean energy standard, it appears to be sidelining efforts to pass a carbon tax that large oil companies have supported. Economists also have long been big fans of carbon taxes, saying it's the most efficient way to eliminate greenhouse gases across the economy.

Among them is Michael Greenstone, who worked in the Obama administration. Still, he's pleased to see work on a clean energy standard underway.

"Relative to no climate policy, this is way better," says Greenstone, who is a professor and director of the Energy Policy Institute at the University of Chicago.

Greenstone has examined state renewable energy requirements and developed recommendations for a clean electricity standard, most of which appear to be reflected in what Democratic policymakers are discussing now.

The U.S. is shifting to renewable energy, but not fast enough to meet Biden's ambitious climate goals. While supporters were thrilled to see the clean energy standard in the budget proposal, it's not certain the deal will make it past Congress. And with scientists warning that the world needs to act now to avoid the worst effects of climate change, Greenstone says the stakes are high.

"Without a clean electricity standard it's going to be very, very challenging to meet any of the goals that the Biden administration has set out," he says.

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MARY LOUISE KELLY, HOST:

The $3.5 trillion budget blueprint that Democrats agreed to this week, it includes a key part of President Biden's climate plan, a national clean energy standard. It's aimed toward zeroing out greenhouse gas emissions from the power sector by the year 2035. NPR's Jeff Brady is here to tell us more. Hi, Jeff.

JEFF BRADY, BYLINE: Hello.

KELLY: So help us understand - how would this clean energy standard actually work?

BRADY: It's a lot like these renewable energy requirements that 30 states have now. But instead of only boosting things like wind and solar, this national standard is focused directly on eliminating the greenhouse gas emissions that contribute to climate change. A lot of details, they still need to be worked out here. But right now it looks like utilities would be required to get 80% of their electricity from zero-emission sources by 2030 and 100% by 2035.

Now, to pass this through the Senate, there - it has to be filibuster-proof, so Democrats are sticking it in some budget legislation that needs just a simple majority to pass. And because of that, it's market-focused. Utilities likely would get incentives for adding more clean power and penalties if they fail to do so. And this would be a huge change in a really short time because right now, the country gets about 60% of its electricity from fossil fuels.

KELLY: Yeah, a huge change for utilities and also a huge amount of work ahead for them to meet that 100% clean energy goal. Are we likely to see that show up on our electricity bills?

BRADY: You know, I don't think most of us will notice any difference. And depending on the details, it shouldn't increase rates. At least, that's the intention. Minnesota Democratic Senator Tina Smith has been working on legislation to develop this national standard and says she's paying close attention to where the incentive money goes.

TINA SMITH: We also want to make sure that the investor-owned utilities are using these resources to add clean power and to keep utility rates stable. That's the point of this - not to enrich utilities, but to make sure that these incentives are being used for the public good that we're seeking.

BRADY: So far, the big trade group representing these utilities says it generally supports developing a national clean energy standard.

KELLY: And what exactly is the standard? What would qualify as clean energy here?

BRADY: You know, this gets a little controversial because nuclear power likely will qualify and even some fossil fuels like natural gas with a carbon capture system attached to it. And that's upsetting some environmental and climate justice organizations. They don't want any benefits going to fossil fuel companies. They point to the past harms caused by that industry not only to the environment, but also to communities of color. They've disproportionately suffered the downsides of energy production because polluting infrastructure often is located in poor and minority communities.

KELLY: What about - I'm thinking about the tax on carbon that we've heard - talked about for forever, for years as one way of addressing climate change. And I think I'm right in saying even big oil companies have said generally they support that. But it's not in this budget deal. Where is that idea?

BRADY: You know, economists, they're especially big fans of carbon taxes. They think it's the most efficient way to eliminate greenhouse gases across the economy. But it's not in this deal. Michael Greenstone - he's one of those economists. He's at the University of Chicago and worked in the Obama administration. Still, he's pleased to see work on this clean energy standard underway.

MICHAEL GREENSTONE: Relative to no climate policy, this is way better. And what is also true is that without a clean electricity standard, it's going to be very, very challenging to meet any of the goals that the Biden administration has set out.

BRADY: The country is shifting to renewable energy, but not fast enough to meet Biden's goals. And there's a lot at stake here. Passing that budget deal that includes this standard, it's not a sure thing. And climate scientists keep telling us that more action is needed right away to limit some of the most - the worst effects of climate change.

KELLY: NPR's Jeff Brady - thank you, Jeff.

BRADY: Thank you. Transcript provided by NPR, Copyright NPR.