POLITICS

Congress passes major climate bill in lame-duck surprise

This story was updated at 8:57 a.m. EST.

Lawmakers agreed last night to phase down hydrofluorocarbons (HFCs), the most significant congressional action on climate change in years and a head start for President-elect Joe Biden's plans to slash greenhouse gas emissions across the economy.

The emission phase-down bill was tucked into the 5,593-page year-end omnibus, which also included a long-anticipated $35 billion energy innovation authorization bill, extensions of key tax credits for renewable energy and bipartisan legislation to boost carbon capture.

The broader package sets the stage at the Department of Energy for Biden, who has emphasized clean energy innovation in his climate plans.

But environmental groups and climate advocates say the HFC deal is a particularly important step that will allow the Biden EPA to immediately begin implementing a regulatory policy that experts say could help avoid half a degree Celsius in warming.

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"From a climate protection point of view it's a very big deal," said David Doniger, senior strategic director for the Natural Resources Defense Council's climate and clean energy program.

"HFCs are growing fast, especially in other parts of the world, and if they were left to grow unregulated, the projections are that you would see an extra 70 billion [metric] tons of CO2 equivalent by 2050," he added.

The bill, originally introduced as the "American Innovation and Manufacturing (AIM) Act," was years in the making.

HFCs, which were introduced as replacements for ozone-depleting refrigerants, have thousands of times the heat-trapping potential of carbon dioxide, and some environmental groups have been talking about phasing them out for more than a decade.

The Obama administration negotiated an international phase-down of HFCs — the Kigali Amendment to the Montreal Protocol — in 2016, but since then, the issue has been in limbo.

A federal court in 2017 struck down EPA's first attempt to ramp down HFCs using Clean Air Act authority, and the Trump administration has refused to send Kigali to the Senate for ratification amid opposition from conservatives, even as it went into effect in the rest of the world.

Even as the "AIM Act" built up a bipartisan group of sponsors on Capitol Hill, with environmental groups drawing Democrats and industry support pulling in Republicans, it derailed negotiation on the energy innovation package earlier this year.

But Sens. Tom Carper (D-Del.) and John Kennedy (R-La.), the bill's lead sponsors, struck a deal with Environment and Public Works Chairman John Barrasso (R-Wyo.) in September that eventually cleared it to be tacked onto the omnibus.

The final compromise language would phase down production and consumption of HFCs 85% by 2036, with a narrow clause preempting new state regulations for certain uses of HFCs for at least five years should replacements for certain applications not become widely available.

State preemption was a sticking point in negotiations for Barrasso and other Republicans, who wanted language to ensure consistent national implementation of HFC regulations and to protect uses of HFCs for which there are no current substitutes.

"My hope is it'll serve as a source of encouragement for other Democrats and Republicans, maybe an independent or two, to take other steps as we come back in the new year with a new administration and make further progress," Carper said on the floor last night.

Barrasso, meanwhile, noted that bear spray and defense product manufacturers in his home state will be able to continue using HFCs.

"The end result is clean air and clear rules," Barrasso said on the floor. "We need both of those."

Next steps

Observers expect implementation of the law to go smoothly, given that EPA has experience phasing out chlorofluorocarbons (CFCs) and hydrochlorofluorocarbons (HCFCs), the ozone-depleting chemicals that HFCs were originally designed to replace under the Montreal Protocol.

"I think it might take a smidge longer than we would have anticipated just because of the administration transitioning and getting a new administrator in place and all the political appointees in place and everybody in the building," said Samantha Slater, vice president of government affairs for the Air-Conditioning, Heating and Refrigeration Institute.

But EPA was also intimately involved as the bill was negotiated, Slater said, offering testimony and responding to questions from staff attempting to work out kinks, which could smooth implementation.

For the companies that manufacture replacement refrigerants, the hope is that the law will "slow down or end" the patchwork of HFC laws enacted by states in recent years, she added.

"I believe our industry is ready to go whenever EPA is, and I think the only thing that might slow things down a bit is just the official transition and the timing of all that," Slater said.

Attaching the bill to the omnibus package means President Trump, who has declared climate change a hoax, will likely sign it into law, but Kigali could remain politically fraught territory for Biden next year.

Biden pledged on the campaign trail to "embrace" Kigali as part of his climate plan, and Doniger said he expects the administration to send it to the Senate early next year.

More than a dozen Senate Republicans sent a letter to Trump in 2018 asking him to send Kigali for ratification, which suggests there could be 60 votes for the treaty, even with a closely divided Senate after the Georgia runoffs next month.

Republicans, however, have long been skeptical of international climate treaties, even if the original Montreal Protocol was ratified without opposition at the recommendation of President Reagan.

And even with conservatives like Barrasso supporting the HFC phase-down bill, there remains a current of opposition on the right.

Steve Milloy, a lawyer and climate change denier who served on Trump's EPA transition team, yesterday called the HFC bill "climate communism" and urged the president to veto the entire package in protest.

Conservative groups like the Competitive Enterprise Institute have long argued a phase-down would be anti-consumer, designed for the benefit of the large companies like Honeywell International Inc. and Chemours Co. that manufacture HFC replacements.

"Senators and Representatives must be hoping Americans celebrating the holidays don't notice that phasing out common refrigerants will benefit two corporations at the expense of consumers," Myron Ebell, director of CEI's Center for Energy and Environment, said in a statement yesterday.

Still, industry has succeeded in selling Republicans on the idea by pitching it as a jobs creator, with American companies hoping to lead the way in manufacturing next-generation refrigerants.

Kennedy, for instance, said yesterday that the HFC phase-down would "create thousands of jobs, save billions of dollars and safeguard the environment."

Chemical manufacturers and environmental groups say there will be little cost for consumers over the course of the 15-year phase-down. Previous phaseouts of ozone-depleting chemicals under the Montreal Protocol suggest that replacements will be widely available in short order, Doniger said.

"We anticipate that like in the case of CFCs and HCFCs, everything will go faster than the original schedule," he said.

More energy

Aside from HFCs, the end-of-year measure also includes multiple other provisions that would curb emissions and boost the development of cleaner power sources.

Those include a modest tax title that would modify the phase-down agreement for the renewable production and investment tax credits.

The PTC would get another year under the deal, while the ITC would get two more years. Additionally, the deal would extend for two years the 45Q carbon capture credit and would make permanent a key incentive for energy efficiency (E&E Daily, Dec. 21).

Industry and advocates had wanted longer extensions, as well as the option of temporarily receiving direct payments for the breaks, but those fights will have to wait for another day.

In addition, the omnibus includes an innovation-focused research and development measure cobbled together from provisions from the Senate Energy and Natural Resources Committee and a House-passed clean energy package.

The resulting deal "will foster innovation across the board on a range of technologies that are critical to our energy and national security, our long-term economic competitiveness, and the protection of our environment," Energy and Natural Resources Chairwoman Lisa Murkowski (R-Alaska) said in a statement yesterday.

ENR Committee ranking member Joe Manchin (D-W.Va.) noted that the rare bicameral energy agreement "provides a down payment on the technologies that will be critical to reducing greenhouse gas emissions in the power sector, industry and buildings and addressing climate change."

Some progressive advocacy groups decried the inclusion of provisions to boost nuclear power as well as the "Utilizing Significant Emissions With Innovative Technologies (USE IT) Act," S. 383, to promote carbon capture and sequestration technology. But the end-of-year bill won praise from other advocacy groups.

The energy package "sets the stage for the Biden administration to hit the ground running in 2021," said Lindsey Walter, a senior policy adviser for the Climate and Energy Program at Third Way.

"The innovation provisions, the demonstration programs, the clean energy research and development programs — all of that is going to set us up to build and innovate the clean energy technologies that we need in order to actually implement the Biden climate plan," Walter said.

"So this is absolutely a huge down payment towards larger climate and clean energy legislation that we'll likely see under a Biden administration."

Senate Minority Leader Chuck Schumer (D-N.Y.) pledged yesterday to "deliver bold climate action" with Biden in the White House.

"Let's be clear: are these provisions enough to meet the demands of the science? No," Schumer said in a statement. "But are they a significant step in the right direction? Yes."

This story also appears in Climatewire.

Twitter: @nick_sobczykEmail: nsobczyk@eenews.net

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