Climate Policy: What’s Next for a Divided Congress?

With Lot Sixteen’s Executive Vice President and General Counsel, Kellie Donnelly – former Chief Counsel for the United States Senate Committee on Energy and Natural Resources.

With the approaching midterms, and the very real possibility that Republicans will control one or both chambers in the 118th Congress, what are the next steps on energy and environmental issues, and how can the parties work collaboratively to reach agreement? 

To help answer that question, Kellie Donnelly, previously the Chief Counsel for the U.S. Senate Committee on Energy and Natural Resources, recently joined “Unpacking Republican Energy and Environmental Policy,” a panel discussion hosted by Columbia University. 

Donnelly noted that Senate Republicans led on energy issues in the last Congress with the enactment of the bipartisan Energy Act of 2020, the first comprehensive national energy policy update in 13 years. The law focuses on innovation, RD&D, and commercialization for next-generation technologies, storage, renewables, and nuclear energy.

Despite the razor-thin Democratic majorities in the House and Senate in the 117th Congress, Republicans have worked collaboratively to deliver significant wins to the Biden Administration on climate-related issues. The sweeping bipartisan Infrastructure Investment and Jobs Act included significant funding to combat climate change, along with meaningful transmission provisions to bring clean energy resources to load. The $1 trillion infrastructure bill also provided funding to the Republican energy priorities authorized in the Energy Act of 2020. Donnelly highlighted that Republicans again crossed the aisle this summer and joined with their Democratic colleagues to enact the CHIPS and Science Act, which provided billions to the Energy Department to spur energy innovation and carbon sequestration initiatives. And just last month, Senate Republicans voted to ratify the Kigali Amendment to the Montreal Protocol to phase down the use of hydrofluorocarbons. 

Francis Chung/E&E News (Capitol); Freepik (Solar panels)

Panelists discussed how Senator Joe Manchin (D-WV), Chair of the Energy and Natural Resources Committee, after objecting to the House-passed Build Back Better legislation, was able to find a path forward on budget reconciliation that allowed Democrats to pass the renamed Inflation Reduction Act. The bill provides $369 billion for clean energy spending, mostly in the form of tax credits, which the Biden administration says is the largest investment in clean energy in history.

But the budget reconciliation process, designed to circumvent the Senate’s 60-vote filibuster threshold, is inherently partisan and Republicans were completely cut out of the deliberations. “It was really unfortunate, because Republicans are willing to engage on tax incentives, particularly for nascent and emerging technologies,” Donnelly explained.

The divide between the parties continues to handicap environmental policy. Senator Manchin’s permitting reform proposal, which was unveiled as part of the reconciliation agreement, has run into bipartisan opposition. House progressives fear permitting reform will result in a degradation of environmental standards, while Republicans, who have been left out of discussions, believe the proposed reforms fail to address the problem. 

There's still an opportunity before the end of this Congress to reach a deal on permitting reform, panelists confirmed. For example, Senator Manchin has said he is going to try to work with his Republican colleagues to do just that. Donnelly re-emphasized that even if this important issue is not addressed in this Congress, it will certainly be a priority in the 118th Congress – regardless of who's in charge.

All eyes are on the midterms, less than 15 days from now. Panelists underscored that everything is dependent on what the results are for this election cycle. “That's what I'm going to be looking for,” said Donnelly.

To watch the full panel discussion, click here.