Democrats on both sides of Capitol Hill are pushing to add climate change provisions to the third aid package for people and industries affected by the novel coronavirus pandemic.
But it’s unclear whether they have the political leverage to make those ideas stick — at least not yet.
The Democratic proposals touch on two main areas.
Several Senate Democrats want airlines to reduce their carbon emissions in exchange for federal aid that could hit $50 billion or more.
House Democrats, meanwhile, are looking at clean-tech tax credits. Those include incentives for electric vehicles, battery storage, offshore wind and solar energy that were left out of a December tax extenders package.
Their demands have precedent. In 2009, when the Obama administration bailed out the auto industry to the tune of $80 billion, it conditioned aid on improvements in vehicle fuel efficiency.
But success this time isn’t guaranteed.
For one thing, Democrats lack leverage with Republicans in control of the Senate and the White House. For another, there’s broad consensus that Congress must act quickly to provide relief to affected Americans. Democrats don’t want to be seen as slowing down emergency aid with climate demands.
These political realities mean that Congress would be hard pressed to tackle both coronavirus and climate change in any near-term relief effort. But one political economist said that climate hawks should press for concessions in any future long-term economic package.
"What we’re seeing discussed right now is phase three. That phase is still an immediate stopgap measure. It’s not looking at a long-term fiscal stimulus to get the economy back on track once workers can return to their jobs," said Mark Paul, a senior fellow at Data for Progress.
"I do think that we need to ensure that climate is front and center," Paul said. "But I think it appropriately belongs in the longer-term fiscal stimulus package."
Dan Lashof, director of the World Resources Institute, was more blunt in his assessment.
"I think in this immediate third package, climate’s not gonna be the central concern," he said. "But that doesn’t mean that it should be ignored."
The airline industry has requested more than $50 billion in federal aid — more than three times the amount it received after the Sept. 11, 2001, terrorist attacks.
The White House appears ready to heed this request.
"We’re going to back the airlines 100%; it’s not their fault," President Trump said at a White House press briefing earlier this week. "We’re going to be backstopping the airlines; we’re going to be helping them very much."
But several Senate Democrats yesterday demanded that any assistance for the airline and cruise ship industries come with strings attached, including requirements to reduce carbon emissions.
"Given the poor environmental records of some companies in these industries, we believe that any such financial assistance should be paired with requirements that companies act in a more responsible fashion," they wrote in a letter to House and Senate leadership.
"Given the large footprint of commercial aviation, requiring reductions in carbon emissions would represent a major step in curbing our nation’s greenhouse gas emissions," they added.
Signing the missive were Sens. Sheldon Whitehouse of Rhode Island, Martin Heinrich of New Mexico, Tina Smith of Minnesota, Richard Blumenthal of Connecticut, Ed Markey of Massachusetts, Cory Booker of New Jersey, Debbie Stabenow of Michigan and Jeff Merkley of Oregon.
Aviation currently accounts for around 2.5% of global greenhouse gas emissions. But that percentage is expected to triple by midcentury as tourism and travel expand.
The letter does not specify how airlines should go about curbing their emissions — whether it’s through investments in alternative fuels, fuel efficiency or carbon offsets. A Whitehouse spokeswoman declined to comment further.
But environmentalists are now echoing the senators’ call, and they’re specifically urging improvements in fuel efficiency and investments in alternative fuels.
"In the past several years, several airlines have plowed a significant portion of their profits into stock buybacks rather than investments in a climate-friendly future of aviation," said Annie Petsonk, international counsel at the Environmental Defense Fund.
"So if they’re going to get this kind of cash, it’s important to have some climate strings attached to it," she said. "They don’t just need to improve their fuel efficiency — although that’s important, as well. We also need strong economic incentives for them to reduce emissions and spur innovation."
Brad Schallert, deputy director of international climate cooperation at the World Wildlife Fund, said U.S. airlines have lagged behind their European counterparts when it comes to investing in alternative fuels such as biofuels. Democrats, he said, are in a position to help change that.
"They could condition some of the aid that’s being received — the grants and the loans — based on some commitment to make investments in alternative fuels," he said. "So airlines could get more cash if they decided to support the green industries of the future."
Schallert acknowledged that Congress faces pressure to act quickly to help American workers affected by the pandemic, and Democrats’ climate demands could slow down negotiations. But he stressed that the two goals aren’t mutually exclusive.
"Policymaking can achieve multiple goals at once — the environment doesn’t need to come at the cost of not supporting workers at the same time," he said. "There are ways to do both."
Clean energy tax breaks
On the other side of Capitol Hill, House Democrats are eyeing an assortment of clean energy tax credits that were left out of a year-end tax extenders package following opposition from the White House (E&E Daily, Dec. 19, 2019).
The co-chairs of the House Sustainable Energy and Environment Coalition confirmed their focus on the incentives in a statement to E&E News.
"We absolutely hope to see clean energy tax credits included in a larger stimulus package. Including these credits will help us address both the economic slow-down we are facing as a result of COVID-19 and the ongoing climate crisis," said Reps. Gerry Connolly of Virginia, Paul Tonko of New York and Doris Matsui of California.
"Our Members pushed for these credits in the end-of-year funding package and will continue to fight for them in this round of economic stimulus," they added.
The lawmakers reportedly have discussed the idea with members of the House Select Committee on the Climate Crisis, as well as the House Ways and Means Committee.
In an emailed statement to E&E News, Select Committee Chairwoman Kathy Castor (D-Fla.) drew a parallel between the coronavirus aid and President Obama’s 2009 stimulus package, which provided $27.2 billion for research and investment in energy efficiency and renewable energy.
"We need to be smart and strategic with emergency measures so that they provide a long-lasting benefit to Americans. Investments in clean energy, clean air and resiliency do just that," Castor said. "For example, the American Recovery and Reinvestment Act created jobs in clean energy, transit and weatherization that paid dividends for taxpayers and communities."
Lashof, of the World Resources Institute, said he supports including the clean energy tax breaks in the third coronavirus stimulus package because the pandemic has affected workers in the sector.
"There’s people who are employed in solar and wind and energy efficiency, and those jobs are affected, too," he said. "So if we’re going to have things focused on a specific industry, it makes sense to include measures to help the clean energy industry."
Still, Lashof acknowledged that the tax breaks may have to wait until a fourth or fifth coronavirus stimulus package materializes.
"Clearly, climate is not central to what happens right now," he said. "But whenever there’s a fourth or fifth package — and we’re thinking about a longer-term strategy to get the economy moving in the right direction toward decarbonization — there’s a lot of other things that will need to be done."
Meanwhile, groups affiliated with the fossil fuel industry are gearing up to oppose the inclusion of the renewable tax breaks in the coronavirus aid.
"Some Democrats in Congress are showing their true colors today. Determined to never let a good crisis go to waste, they are seizing the coronavirus pandemic as an opportunity to slip failed green policies into legislation designed to protect the American economy," Tom Pyle, president of the American Energy Alliance, said in a statement yesterday.
"The proposed inclusion of seven expired renewable energy tax credits will do nothing to stimulate the economy or help anyone’s general health, and will only line the pockets of renewable energy companies [and] the wind and solar lobby," he said.
Reporter Geof Koss contributed.