Biden aims to speed up climate policy push after COP26

Capture investment opportunities created by megatrends

Biden aims to speed up climate policy push after COP26

16 November 2021 Clean energy investing 0

Joe Biden’s administration is preparing to push key climate legislation in Congress as soon as this week, after vowing to speed up US climate policies at the COP26 summit in Glasgow.

The White House still faces an uphill battle in driving through its plans, however, after months of intraparty wrangling among Democrats that has already slimmed down the US president’s ambitious climate-related agenda.

Biden on Monday signed into law a $1.2tn bipartisan infrastructure bill that included some $100bn of investments into energy, power and water infrastructure, including relatively small investments in electric vehicles.

Attention in Washington is now shifting to a second “Build Back Better” bill, which contains much bigger climate provisions: $550bn to tackle climate change, including $320bn of tax credits for individuals and businesses that shift toward clean energy.

The White House had originally intended to pass both pieces of legislation at the same time. But the Build Back Better bill, with a total estimated price tag of about $1.75tn, was held up amid objections from more conservative Democratic lawmakers in both the House of Representatives and the Senate.

Even as the US made a big effort to show “leadership” at the COP26 summit, it was often on the defence.

While the US and China were able to make a joint declaration showing the two countries had found common ground on curbing climate change, the subsequent weakening of the agreement on the end of coal power by China and India undermined that effort.

The US delegation in Glasgow also faced awkward questions about how it would be able to implement its climate goals, if the Build Back Better bill does not pass soon. Senior lawmakers in Congress vowed to pass the legislation before the American Thanksgiving holiday later this month. But a handful of key lawmakers, including Democratic senator Joe Manchin, have suggested they are in no rush to do a deal.

Manchin, who represents the coal-dependent US state of West Virginia, has been a driving force behind stripping out many of the Biden administration’s most ambitious climate proposals, including measures to allow tax credits for the purchase of electric vehicles made by unionised US car plants.

The White House has remained outwardly optimistic. As COP26 concluded — and almost 200 countries agreed on the “Glasgow Climate Pact” — US climate envoy John Kerry declared that “I am confident Congress is going to move on this”, referring to the legislation.

High-profile American appearances at the climate summit included President Biden, the House Speaker Nancy Pelosi, 10 cabinet members and former US president Barack Obama.

The Biden administration rejoined the 2015 Paris climate accord, which the US left under Donald Trump, and set a goal to cut greenhouse gas emissions by at least 50 per cent by 2030, compared to 2005 levels. But reaching that target will depend on congressional support for its clean energy policies.

In the House, Democrats are waiting on a cost assessment from the independent Congressional Budget Office before holding a vote on the Build Back Better package, which also includes large investments in early childhood education and additional public spending on healthcare for pensioners.

In the Senate, negotiations have been stymied by two moderate senators, Manchin and Kyrsten Sinema of Arizona, who have taken issue with several White House proposals.

At the same time, reviews of the US role in the Glasgow Climate Pact were mixed.

Laurence Tubiana, a key architect of the 2015 Paris accord, said the US had a “really central role” at COP26, particularly the part played by Kerry in shuttling around the globe in the months ahead.

“The US has played a big role in re-mobilising climate diplomacy in a way that was lacking. And to make up for the lost years [under Trump],” Tubiana said.

However, Jean Su, senior attorney for the Center for Biological Diversity, a climate legal charity based in Washington, said US rhetoric at the summit was not matched by its actions at home.

“One of the most disappointing pieces of the US agenda at the COP was their blockage of loss and damage finance for developing countries who have suffered the most, and contributed the least, to climate change,” she said, referring to funding to help countries recover from disasters related to climate change.

“What happened at COP26 was woefully insufficient,” Su added. “I think the public is really urging the US to take a far more aggressive stance on climate.”

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Are you curious about the FT’s environmental sustainability commitments? Find out more about our science-based targets here