Sweeping climate legislation is not guaranteed to get top billing in 2021, even if Democrats were to take both the US Senate and the White House, according to market observers.
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Coronavirus recovery packages could feature green incentives, experts said, but legislation that focuses on the pandemic and the economy will be front and center in the year ahead.
Democrats, including presidential nominee and former Vice President Joe Biden, have outlined aggressive climate and clean energy proposals and highlighted climate change mitigation as a focus for the party.
But even if Senator Chuck Schumer, Democrat-New York, and House Speaker Nancy Pelosi of California were running the legislative branch, Congress still could struggle to pass major energy and climate reforms in the near term.
During the Democratic National Convention in August, Schumer listed climate change third behind healthcare and income inequality as priorities. About a week later, Senate Democratic leadership released a 263-page outline of climate policies, which included emissions standards, a federal clean energy standard and a carbon price. The outline also included goals to reduce carbon dioxide emissions from as many sectors of the US economy as possible, called for significant research and development investments into carbon-free industrial production, and endorsed novel solutions such as mass carbon sequestration through the agriculture industry.
The need for coronavirus-related stimulus or economic recovery legislation, and Democrats' interest in broader reforms, could sideline climate priorities. But such legislation could also offer an opening for climate action, particularly if Biden wins the White House, said Sarah Ladislaw, director and senior fellow for the Center for Strategic and International Studies' Energy Security and Climate Change Program.
"That does allow you to think about stimulus spending on infrastructure and [energy] innovation at a magnitude you weren't going to be able to do before," Ladislaw said. "So I think that would be the big component pieces of what a clean Democratic sweep of the White House and Congress would look like."
Path forward on climate
To help advance their priorities, Democrats could seek to eliminate the Senate's filibuster or invoke the Congressional Review Act, a potential pathway to overturning regulations finalized up to 60 legislative days prior, industry observers said.
If President Donald Trump wins a second term, he would likely veto the Democrats' more aggressive climate proposals, limiting policy movement in the space to perhaps clean energy research and development funding, observers said.
Trump and Democrats could try to collaborate on an infrastructure package, but "there is not a lot of overlap" between the two parties on the energy provisions of such a bill, aside from grid security, Ladislaw said.
A Schumer-led Senate might pass a series of legislative packages that could "build up towards a meaningful and coherent federal strategy on climate" without requiring one comprehensive climate bill, according to Sasha Mackler, director of the Energy Project at the Bipartisan Policy Center.
"They're not going to be the end-all for what the federal government needs to do on climate, but they could be a very meaningful step forward," Mackler said of the possible legislative packages. "It's our view that a scenario like that is possible in the next one to three years, and if it moves forward in the bipartisan framework ... it's more likely to be durable over the long-term and to be something that can be built upon over time." Congress must act, rather than deferring to the executive branch, to motivate the investments and changes necessary to drive a transition, he said.
By contrast, Kelly Johnson, a partner with Holland and Hart, said she would expect to see a Schumer-led Senate seeking to pass an independent climate bill because recovery packages might already be so large on their own. "Combating climate is such an important issue, and there will be or can be bipartisan interest in it," Johnson said. "I just think he would want to really not dilute that message."
Enacting sweeping climate reforms, however, may require Democrats to follow through on pressure to eliminate the filibuster in the Senate. Biden has historically supported the filibuster, which prevents a bill from being brought to vote until at least 60 senators agree to end debate on it. Schumer's staff did not respond to request for comment on his legislative priorities and whether eliminating the filibuster is among them.
With moderate Democrats from fossil fuel states hesitant to take aggressive climate action, a Democrat-controlled Senate would "absolutely" have to jettison the filibuster to approve a carbon tax, and it would likely need to do so for a national clean energy standard as well, Ladislaw said.
Though the Senate may not initially target the filibuster, GOP opposition to major Democrat-backed legislation could elicit a chamber-wide vote to remove the maneuver, according to Kevin Book, managing director of the independent research firm ClearView Energy Partners.
"The first sign that Republicans will stand in the way of a regulatory change because they disagree with it — and that they'll threaten to shut down the government as a way of forcing their will — probably takes care of the filibuster," he said.