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GLASGOW TIMING: The big U.N. climate conference in Glasgow, Scotland, starting Sunday is pressuring Democrats to come up with at least a framework of a deal on their climate and social spending package, as President Joe Biden and Democratic leaders are making clear.
“The president looked us in the eye, and he said: ‘I need this before I go and represent the United States in Glasgow. American prestige is on the line,’” Rep. Ro Khanna, a California Democrat who met with Biden last week at the White House, said on “Fox News Sunday.”
The question of U.S. credibility has loomed over the climate talks, where countries are expected to submit more aggressive pledges to cut emissions, known as NDCs, in order to keep pace with the Paris agreement target of limiting warming “well below” 2 degrees Celsius.
Other big polluters, such as China, India, and Russia, aren’t expected to offer meaningful NDCs if Biden cannot back up his aggressive pledges to cut emissions in half by 2030 and reach net-zero emissions by 2050.
What progress would look like for Biden: Biden’s legislative climate agenda suffered a major blow when opposition from Sen. Joe Manchin of West Virginia doomed Democrats’ clean electricity performance program.
But Democrats are now saying that reaching an agreement this week on a reconciliation package headlined by about $300 billion in long-term clean energy tax credits would carry major weight, both with producing big emissions cuts and affirming U.S. credibility.
Biden’s EPA is also expected this week to announce a long-anticipated proposal to regulate methane from new and existing oil and gas sources, a move that could help produce immediate emissions cuts, given methane has a more potent short-term warming effect than carbon.
“Biden is in a strong position given the methane action and the likelihood major provisions of his climate agenda will pass,” Paul Bledsoe, an adviser with the Progressive Policy Institute, told Josh.
Why the tax credits matter: Bledsoe said the tax subsidies are especially important at driving private sector investment into clean energy development.
“It’s incredibly clear the U.S. business community is moving its investment dollars to clean energy and that passage of the tax credits would put that into hyperdrive,” Bledsoe said.
The tax incentives would remain on the books for a decade, providing certainty to clean energy developers who have faced a series of lapses — and subsequent renewals — for a shorter time frame.
They would also expand to new technologies, such as energy storage and direct air capture, and several of these incentives would be eligible for “direct pay,” a main demand made by clean energy companies, allowing them to monetize credits without tapping the tax equity market, which has frozen because of the economic fallout from the pandemic.
“I have always seen the 10-year tax credits as the workhorse,” said Nat Keohane, president of C2ES, a group that works with policymakers and businesses to cut emissions.
“I don’t agree with the narrative because CEPP is gone, the whole thing is gone. This is the moment to get done as much as can be achieved,” added Keohane, who was responding to a question from Josh at a webinar event Friday.
In the coming days, expect the White House, Democrats and surrogates to lean on a recent analysis from the Rhodium Group finding that if everything breaks right, the U.S. can fulfill Biden’s 2030 emissions pledge by relying on the clean energy tax credits along with a steady stream of standards and regulations by federal agencies and accelerated action by leading states and companies.
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DECIPHERING SAUDI ARABIA’S NET-ZERO PLEDGE: Saudi Arabia, a major fossil fuel producer, has joined the net-zero craze, pledging over the weekend to reach carbon neutrality by 2060.
Saudi Arabia will depend heavily on carbon capture to reach its target, Energy Minister Abdulaziz bin Salman said, aiming to reduce carbon emissions by 278 million tons per year by 2030, more than double its former target.
The Saudis also joined the Global Methane Pledge, an agreement led by the U.S. and the EU to cut methane emissions by 30% by 2030.
Saudi Arabia is the world’s fourth largest oil consumer and is one of the most carbon-intensive countries.
“The Saudi government is desperate to reduce oil consumption inside the kingdom — not so much outside — and this net-zero goal will help,” Jim Krane, a fellow at Rice University’s Baker Institute for Public Policy, told Josh.
Major caveats apply: The move shows the hollowness of net-zero pledges due to Paris agreement rules that say targets only deal with domestic emissions. So the Saudis can continue to be the world’s largest exporter of oil even as it decarbonizes at home.
Indeed, Saudi Aramco is even planning to increase its oil production capacity to 13 million barrels a day from 12 million in order to meet what it anticipated to be rising demand after the pandemic.
“For the Saudi net-zero goal to succeed, Riyadh needs the world to continue buying and burning its oil,” Krane said.
DEAL ON CLIMATE FINANCE AID IS CLOSE: Rich nations are expected as soon as today to announce a deal for a blueprint on how they can reach their goal of providing $100 billion in annual financial assistance to help the developing world shift away from fossil fuels and protect themselves against the effects of global warming.
Developed countries including the U.S. have failed to deliver on their 2009 pledge to collectively deliver $100 billion annually starting in 2020 to developing countries.
Biden last month committed the U.S. to provide $11.4 billion in climate finance annually by 2024, a quadrupling of the amount pledged before he took office.
But the U.S, which owes the most of the aid that has not been delivered, has objected to a plan to make up for shortfalls in previous donations with higher contributions in future years, according to Bloomberg.
That has been the biggest hangup preventing an announcement on an agreement.
ECONOMIC BENEFIT OF DEMOCRATS’ FEE ON METHANE EMISSIONS: Democrats’ proposed methane fee would create massive emissions reductions while creating jobs and boosting the economy, according to a study this morning from Energy Innovation, a nonpartisan research group.
Cumulatively through 2050, the methane fee as proposed in House Democrats’ version of the reconciliation bill would produce 65% of the legislation’s total industrial emissions reductions, a result possible because many of the other programs would last 10 years.
The fee would prevent 172 million metric tons of industrial carbon dioxide equivalent emissions annually by 2050, the same as the annual emissions of more than 36 million gas-powered vehicles.
Digging deeper: But perhaps the more unexpected outcome is that it would increase U.S. gross domestic product by more than $250 billion from 2023, the year the fee would start, to 2050 and create more than 65,000 jobs by 2028.
The study attributes the economic benefits to the fee encouraging oil and gas companies to invest in workers and equipment to prevent methane leaks in order to avoid paying the government.
The American Petroleum Institute and other industry groups argue the methane fee would harm the economy and cause a trickle-down effect of higher natural gas prices paid by customers on their utility bills.
But the study finds industry faces low costs to limit leaks, such as by properly casing and sealing wells, along with monitoring and improving pipeline and equipment maintenance.
BIDEN WEIGHS ANOTHER OIL AND GAS LEASE SALE: The Interior Department is taking steps toward conducting an offshore oil and gas lease sale in federal waters in Alaska’s Cook Inlet.
Interior’s Bureau of Ocean Energy Management announced Friday it is taking public comment on a proposed environmental review for the auction, which would take place in 2022.
It’s the latest evidence the Biden administration is complying with a ruling by a federal judge that found its indefinite pause on new oil and gas leases to be illegal.
BOEM previously announced it will hold its first offshore oil and lease sale since the pause was lifted for acreage in the Gulf of Mexico on Nov. 17 to comply with the court order from a Louisiana federal district judge.
The Biden administration is appealing the decision to the U.S. Court of Appeals for the 5th Circuit, but it also committed to restart leasing during the appeals process.
GREENHOUSE GAS LEVELS HIT NEW PEAK IN 2020: The amount of carbon dioxide and other greenhouse gases in the atmosphere hit a new peak in 2020 despite a slowdown in global emissions, according to a new analysis from the U.N.’s World Meteorological Organization.
CO2 levels rose to 413.2 parts per million, or 149% of its pre-industrial level of concentration, WMO found.
Considering that global attention is focused on slashing emissions, note this from WMO about what even success on that front portends: “Given the long life of CO2, the temperature level already observed will persist for several decades even if emissions are rapidly reduced to net zero.”
WMO also calculated methane concentrations, too, rose last year to 262% of the pre-industrial level and nitrous oxide to 123%.
DOMINION PLANS OFFSHORE BLADE FACTORY: Dominion Energy and Siemens Gamesa announced plans today to construct a first-of-its-kind factory in Portsmouth, Virginia, to manufacture blades for offshore wind turbines.
The factory builds on Dominion’s initiative to create an offshore wind power hub off the Virginia coast, where the utility has already installed two 600-foot pilot turbines.
Once fully operational, the blade factory will have the capacity to support the construction of more than 100 turbines per year.
NORWAY’S PM SAYS END TO DRILLING WOULD THWART GREEN TRANSITION: Jonas Store, the newly-minted Norwegian prime minister, is warning against moving too aggressively to clip the nation’s oil and gas industry.
Store said in an interview published this morning that shutting down domestic drilling in the near term would threaten decarbonization goals, adding that the approach instead is “to develop and transit, not close down.”
A shutdown would “put a stop to an industrial transition that is needed to succeed in the momentum towards net zero,” he told the Financial Times.
Following Russia, Norway is the continent’s second largest provider of gas, and it is the largest producer of oil in western Europe.
A BIG Q3 FOR CLEAN POWER: U.S. clean energy capacity grew by 3,336 MW, or enough to power some 740,000 homes, during the third quarter, per a new report from American Clean Power.
Across 20 different states, seven new wind projects were installed, along with 34 utility-scale solar projects, and 8 energy storage projects.
The new projects bring 2021’s total of new clean energy capacity to 15,317 MW, which is up 23% over last year.
The Rundown
Bloomberg Behind China’s rising emissions are hundreds of hidden polluters
Reuters Rocky Mountain high: US looks to Colorado for methane emissions policy
Wall Street Journal The UK ditched coal and left itself with a new set of challenges
Washington Post Germany portrays itself as a climate leader. But it’s still razing villages for coal mines.
Calendar
WEDNESDAY | OCT. 27
10 a.m. 406 Dirksen. The Senate Environment and Public Works Committee will hold a business meeting and hearing to consider several EPA and SCRC nominees.
1 p.m. The House Natural Resources Committee’s Subcommittee on Energy and Mineral Resources will host a remote oversight hearing focused on the federal coal program.
THURSDAY | OCT. 28
9 a.m. The House Oversight Committee will hold a hearing to “Examine the Role of the Fossil Fuel Industry in Spreading Climate Disinformation and Heating the Planet.” The CEOs of ExxonMobil, Chevron, BP America, and Shell will testify, along with the presidents of the American Petroleum Institute and U.S. Chamber of Commerce.
10:30 a.m. 210 Cannon. The House Select Climate Committee will hold a hearing titled, “International Climate Challenges and Opportunities.”
