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White House looks to scale back its climate initiative after stiff pushback from Manchin

The West Virginia Democrat has shown fierce opposition to proposed program for clean electricity

Sen. Joe Manchin III (D-W.Va.) walks at Capitol Hill this month. (Jabin Botsford/The Washington Post)

The White House is scrambling to salvage a key proposal to reduce carbon emissions and deliver on President Biden’s ambitious climate agenda, as pushback from Sen. Joe Manchin III (D-W.Va.) creates new headaches for the administration entering international talks next month.

The fight revolves around the Clean Energy Performance Program, which Democrats have proposed as a way to reward utilities that increase their clean energy supply by 4 percent each year, while penalizing those that don’t. Lawmakers have included it as part of a tax-and-spending package that aims to advance Biden’s broader economic vision.

But the emissions-reduction program has drawn fierce public and private opposition from Manchin, whose home state of West Virginia depends heavily on coal. The standoff has jeopardized Biden’s pledge to halve emissions by 2030, inspiring a new flurry of last-minute policy proposals just two weeks before the president and other world leaders are set to convene the most important global climate talks in a quarter century.

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One of the newer ideas under consideration would establish a voluntary emissions trading system among aluminum, steel, concrete and chemicals manufacturers that would provide federal funding to help companies curb pollution, according to two people close to the negotiations.

But it remains unclear how exactly the program would be structured, and whether it would be sufficient to satisfy Democratic lawmakers who have demanded aggressive climate action, added the sources, who spoke on the condition of anonymity to describe the private discussions. Some in the party have taken the opposite approach from Manchin, fearing they risk squandering a generational opportunity to respond to the dire growing consequences of a steadily warming planet.

The tense talks have added to the high political stakes for Biden as he prepares to travel to Glasgow, Scotland, for a United Nations climate summit next month. The Sierra Club, an environmental group, stressed in a statement Saturday that Democrats needed to preserve the CEPP, as it is known, or deliver investments in “other climate priorities to close the emissions gap and meet the president’s international climate goals in the coming days and weeks as the U.N. climate negotiations near.”

Even the president’s top envoy for climate, former secretary of state John F. Kerry, delivered a stark warning this week, stressing that a failure to adopt climate legislation promptly could undermine the United States at a time when it hopes to encourage other countries to take action. Biden, however, dismissed the comments Friday evening as “a little hyperbole,” adding, “It’d be good to have agreement on the climate piece, but we’re going to get the climate piece.”

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The uncertainty around climate change reflects only part of the challenge facing the president’s economic agenda, which remains mired in political disputes among Democrats on Capitol Hill. From its current $3.5 trillion price tag to the proposed tax increases that would help finance it, the party’s liberal and centrist factions remain at odds over its size and scope, preventing lawmakers from forging ahead since their legislative ambitions require unanimity to prevail.

Talks over the total package continued into the weekend as Biden labored to broker an agreement with Manchin and another moderate holdout, Sen. Kyrsten Sinema (D-Ariz.), who has demanded additional cuts.

The two centrists have offered only scant indications as to the exact changes they seek, frustrating liberal Democrats who have insisted in recent days that the party must spend ambitiously or face the political consequences in the midterm elections next year.

“This bill offers us a chance to fundamentally transform the relationship between the American people and their government,” Rep. Pramila Jayapal (D-Wash.) and other members of the House bloc she leads, known as the Congressional Progressive Caucus, wrote in a letter Wednesday.

With climate, some Democrats harbor sky-high expectations, hoping to address what they say are decades of neglect. Biden himself campaigned aggressively on taking major steps to address global warming during the 2020 campaign, drawing a stark contrast with former president Donald Trump, who unwound federal emissions rules and withdrew the United States from a critical international carbon-reduction agreement.

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To reach their goals, Democrats have tucked into their unfinished economic package a flurry of initiatives, including the elimination of dozens of tax programs that subsidize fossil fuels. Those efforts, led chiefly by Sen. Ron Wyden (D-Ore.), could accomplish significant improvements on their own, perhaps by incentivizing clean energy and cutting emissions by roughly 70 percent, he said, over the next seven years.

“The Clean Energy for America Act, because of the dramatic savings, the dramatic emissions cuts in the power sector, is the linchpin,” stressed Wyden, the chairman of the tax-focused Senate Finance

Committee, referring to his section of the legislation.

Democrats’ spending initiatives include other provisions aimed at slashing greenhouse gas emissions, including subsidies to expand charging stations for electric vehicles across the nation. But the most significant proposal is the Clean Energy Performance Program, championed by lawmakers including Sen. Tina Smith (D-Minn.) and Sen. Edward J. Markey (D-Mass.), which targets power companies themselves.

Without the CEPP, Democrats and climate experts alike believe the United States is certain to fall far short of Biden’s climate goal. Markey said in a recent interview that eliminating the federal program would undercut the president’s pledge to reduce emissions by between 50 and 52 percent, compared to 2005 levels, before the end of the decade.

An analysis by Energy Innovation, a nonpartisan energy and climate policy think tank, found that U.S. greenhouse gas emissions otherwise would be 250 to 700 million metric tons higher per year in 2030. “That would be a very serious blow” to “meeting our 2030 goals,” Markey said.

In opposing the proposal, Manchin repeatedly has pointed to its effect on coal producers in his home state, as well as his more general concerns about government spending. The West Virginian lawmaker for weeks has sought to shrink the total package perhaps by as much as $2 trillion, frustrating other Democrats who believe that such cuts would force them to compromise their key goals, including on climate change.

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“Sen. Manchin has clearly expressed his concerns about using taxpayer dollars to pay private companies to do things they’re already doing,” his office said in a statement this weekend. “He continues to support efforts to combat climate change while protecting American energy independence and ensuring our energy reliability.”

The standoff has prompted a frantic race behind the scenes to craft some alternative, ideally before the end of October, by which point Democrats hope to adopt the final bill along with a related $1.2 trillion infrastructure plan. A voluntary carbon trading program is one of the many ideas in the mix, according to a White House official, who spoke on the condition of anonymity to describe the private discussions.

Several climate experts have said they feared any narrower plan to curb emissions would be insufficient. “We have to have real pollution reductions in the power sector. We can’t just have voluntary programs and expect that’s going to get us where we need to go,” said Leah Stokes, a climate policy expert at the University of California at Santa Barbara.

White House officials are still looking at whether they can preserve the clean energy program by providing a way for coal and natural gas plants to keep operating for longer, according to three individuals. Calls continued between White House aides and climate experts, according to one of these individuals, who said it remains unclear if Manchin supports some of the newer ideas that the administration has floated.

“We don’t comment on the state of our negotiations with the wide array of Senators offering views about the Build Back Better agenda,” White House spokesman Vedant Patel said in an emailed statement. “The White House is laser focused on advancing the President’s climate goals and positioning the United States to meet its emission targets in a way that grows domestic industries and good jobs.”