United States: House Energy And Commerce Committee Democrats Release Framework For Climate Legislation

At a Wednesday press conference, House Energy and Commerce Committee Democrats released a framework for the Climate Leadership and Environmental Action for our Nation's Future Act (CLEAN Future Act), a comprehensive proposal aimed at transitioning the US to net-zero greenhouse gas (GHG) emissions by mid-century. Committee Chairman Frank Pallone (D-NJ) indicated at a press conference that Democrats would release actual legislative text by the end of January and then hold hearings and receive input on the proposal throughout 2020.

Notably, the CLEAN Future Act does not include carbon pricing. In the press conference, Chairman Pallone said authority to impose carbon pricing rests with the House Ways and Means Committee. What the bill does do, he said, is adopt a comprehensive, sector-specific approach to transitioning the US economy to net-zero emissions by 2050.

Speaker Nancy Pelosi (D-CA) recently stated that the House will consider climate change legislation in 2020. It is unclear what bill the House could consider, as a variety of members have introduced proposals over the last year and the House Select Committee on the Climate Crisis is preparing to release legislative recommendations in March. Irrespective of what bill Pelosi opts to consider, such measure is highly unlikely to pass through the Senate and be signed into law by President Trump this year. Accordingly, the House Energy and Commerce Committee's work on the CLEAN Future Act appears focused not on 2020 but rather on building consensus within the Democratic caucus for a comprehensive climate bill that could have momentum in 2021.

Below is a summary of the CLEAN Future Act.

Title I: National Climate Target

The CLEAN Future Act adopts the goal of transitioning the US to net-zero GHG emissions by 2050. Federal agencies, under the bill, would be directed to "use all existing authorities to put the US on a path toward meeting this net-zero emissions target." The Environmental Protection Agency (EPA) would, on an annual basis, evaluate federal agencies' plans and make recommendations on how such agencies could strengthen their GHG emission reduction goals.

Title II: The Power Sector

The centerpiece of this title is the adoption of a national clean energy standard (CES) that would require electricity suppliers to provide 100 percent clean electricity to consumers by 2050. The framework notes that the CLEAN Future Act will pull from separate CES proposals by Representatives Diana DeGette (D-CO) and Ben Ray Luján (D-NM). Like these proposals, the CES would take a technology-neutral approach, providing non-emitting generators with a full credit and allowing coal and gas generators to qualify for partial credit if their carbon intensity is lower than 0.82 metric tons of CO₂. The framework does not specify interim targets for retail electricity suppliers. Suppliers would be permitted to buy and trade clean energy credits to meet their annual clean energy requirements.

In addition to the CES, the framework discusses changes to the authority of the Federal Energy Regulatory Commission (FERC). The CLEAN Future Act would remove barriers currently preventing new entrants and emerging technologies from participating in energy markets. The framework does not detail what barriers they would address but presumably they are intending to pave the way for more distributed energy resources to participate in energy markets. The CLEAN Future Act would also state that FERC must consider climate change as part of its public interest determination under the Natural Gas Act. Over the last several years, there have been several court cases assessing whether and to what extent FERC must analyze the indirect climate change effects associated with interstate natural gas pipelines.

The CLEAN Future Act would also amend the Public Utility Regulatory Policy Act by directing states, as part of their resource-planning processes, to assess energy storage systems; encouraging the use of "non-wires" solutions; and safeguarding qualifying facilities' right-to-contract.

The CLEAN Future Act would also provide grants to bolster the national electric grid and drive investment in the deployment of clean electricity, such as commercialization of advanced nuclear reactors and installation of solar panels in low-income communities. As to hydropower, the legislation would also provide incentives for energy efficiency upgrades and to "improve" the licensing process.

Title III: Buildings and Efficiency

This section sets national energy savings targets for buildings through model building energy codes that will require zero-energy-ready buildings by 2030. It also provides grants for states and tribes to adopt and comply with model building energy codes and establishes a program for residential energy efficiency improvements. The bill also provides that if the federal government fails to finalize its own standards, states will retain authority to establish their own energy efficiency standards for equipment and appliances; and creates incentives to reduce building emissions and improve energy efficiency that are specific to schools, federal buildings and buildings owned by non-profits.

Title IV: Transportation

This section would direct EPA to set increasingly stringent GHG emissions standards for light-, medium- and heavy-duty vehicles, including non-road modes of transportation. In addition, the CLEAN Future Act would provide support for state and local governments to deploy electric vehicle infrastructure, transition the federal fleet to alternative fuels or low- or zero-emission vehicles, and streamline the EPA's approval process for low-carbon alternative transportation fuels under the renewable fuel standard (RFS) program, among other policies.

Title V: Industry

While acknowledging that reducing GHG emissions from the industrial sector is "one of the most technically and economically challenging sectors to decarbonize," the CLEAN Future Act includes a variety of measures to help reduce sector emissions. In particular, the bill would establish a "Buy Clean Program" that would encourage projects receiving federal funding to procure low-carbon industrial products. In addition, the bill would amend the Department of Energy's (DOE's) section 1703 loan guarantee program for financing projects that use innovative technologies to allow industrial de-carbonization projects to receive support. The DOE, under the bill, would also be directed to develop a national strategy for developing and deploying smart manufacturing technologies.

Title VI: Environmental Justice

This section codifies federal protections for communities of color, low-income communities and other at-risk populations from climate change and legacy toxic exposures. In addition, the CLEAN Future Act would require the EPA to weigh environmental justice consideration when considering states' clean air and hazardous-waste management plans. The proposal directs the EPA to establish a financial responsibility requirement for facilities that could potentially release toxic chemicals as a result from extreme weather. The proposal implements a coal ash disposal requirement and repeals oil and gas production exemptions from federal environmental statutes. Lastly, this section authorizes the development of a national strategic action plan to address the public health effects of climate change, as advocated for by Representative Matt Cartwright (D-PA). 

Title VII: Super Pollutants

The CLEAN Future Act would direct the EPA to regulate methane emissions. Specifically, existing oil and gas sources would be required to reduce methane emissions 65 percent below 2012 levels by 2025 and 90 percent by 2030. The bill would also prohibit flaring for new sources and require that existing sources phase out flaring by 2028. Under the bill, states could receive funding to help natural gas distribution companies inspect, repair and replace aging pipeline infrastructure.

The CLEAN Future Act would also direct the EPA to assess whether existing regulations are sufficient to reduce black carbon emissions. 

Title VIII: Economy-Wide Plans

Building upon the cooperative federalism model in the Clean Air Act and other federal environmental statutes, the CLEAN Future Act would set a national standard of net-zero GHG emissions by 2050 but delegate authority to states to develop their own plans to meet this standard. States could work with each other, e.g., through compacts such as the Regional Greenhouse Gas Initiative (RGGI), to meet the federal standard. The EPA would retain authority to review and approve state plans. If a state fails to submit a proposal or if the EPA rejects a state's plan, then major emitters in that state would be assessed a backstop carbon fee.

This title also includes a proposal to establish a National Climate Bank, fashioned on legislation introduced by Representative Debbie Dingell (D-MI). The bank would fund low and zero-emissions technologies, climate resiliency, building efficiency and electrification, industrial de-carbonization, grid modernization, agricultural projects and clean transportation.

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