On January 3, 2023, the 118th Congress convened for the first time in Washington, D.C., marking the beginning of the next two years of federal policymaking. When lawmakers arrived, some for the first time, the House and Senate looks – and will legislate – differently than in the last Congress. The House and Senate are now controlled with slim majorities by the GOP and the Democratic Party, respectively, ending the last two years of nominal single-party Democratic control over both chambers of Congress and starting a new – and historically more typical – era of divided government.
Amid this new political landscape, Congress must continue to advance durable and pragmatic policies on issues that matter to voters across party lines: improved air quality and lower emissions, improved public health, energy security, a stronger economy, and good jobs.
Beginning with the Energy Act of 2020 to the Infrastructure Investment and Jobs Act of 2021 to the CHIPS and Science Act to the Inflation Reduction Act of 2022, historic legislation on all these issues has recently passed under a variety of political configurations in both Congress and the White House. And to mitigate the worst impacts of climate change, we can’t stop there.
So, what exactly happened this past November, and what does it mean for climate progress in the United States going forward?
Republicans took the House, Democrats retained the Senate
In advance of the 2022 midterm elections, with many competitive races for seats in the House of Representatives appearing to favor Republicans, most political strategists predicted that a “red wave” would overtake the House and give the GOP control of the chamber in the 118th Congress. Meanwhile, pollsters were unable to predict whether Democrats would be able to retain control of the Senate. Combined with President Biden’s approval rating hovering below 40% and the general expectation for the majority party to lose seats in a midterm election, signs before the 2022 midterms pointed to a likely wipeout for Democrats and a reset of congressional priorities for the 118th Congress.
Although the results of some particularly competitive races took weeks to finalize, it quickly became clear that the predicted red wave would hit neither the House nor the Senate. Republicans gained 10 seats in the House, clinching slim control of the chamber with a total of 222 seats (218 seats are needed to control the House). Democrats increased their majority in the Senate by one after flipping an open seat in Pennsylvania, creating a 51-49 split.
While other factors were top-of mind-for voters in the 2022 midterms, from these remarkable results, we can conclude that Democrats did not experience a political backlash to the recently enacted climate and clean energy policies in the Inflation Reduction Act. And as the new law is implemented, voters may become even more supportive of these policies as their economic, public health, and environmental benefits manifest directly in their communities. The more businesses and communities reap the benefits, the more popular consensus will be built to continue advancing climate legislation.
What does this mean for clean energy and climate action in 2023?
We have witnessed immense progress on climate action over the last two years, particularly through the passage of the Energy Act of 2020, the Infrastructure Investment and Jobs Act of 2021, the CHIPS and Science Act of 2022, and the Inflation Reduction Act of 2022. Notably, these pieces of landmark legislation either passed with bipartisan support or included bipartisan provisions sourced from other bills. While the next two years are unlikely to bring a similar level of historic achievement, Congress can and must identify and take advantage of opportunities for bipartisan agreement on climate and clean energy legislation. At the same time, policy implementation at federal agencies and the promulgation of new regulations requiring reductions in greenhouse gas emissions offer key opportunities for progress on climate in 2023 and beyond.
Passing federal climate and clean energy legislation in the 118th Congress
With a Republican House and Democratic Senate, policymaking in 2023 will require bipartisan agreement across both chambers of Congress. Fortunately, there are areas of consensus on climate and clean energy across the political spectrum – and divided government is the rule rather than the exception across recent history (see timeline below). With this in mind, CATF gears advocacy toward achieving bipartisan – and therefore durable – policy outcomes.
The new House of Representatives got off to an inauspicious start with 15 attempts to elect Rep. Kevin McCarthy (R-Calif.) as its new speaker, which may impact key orders of business and send signals as to how the party will legislate in the coming year. To secure the support of the right-flank members of the Republican party for his bid for the speakership, Rep. McCarthy made a host of concessions, including promising fights over the debt ceiling and federal budget. This may put clean energy incentives passed in the last Congress at some risk given their impact on federal spending, particularly the provisions in the Inflation Reduction Act, which was passed with no Republican support.
Fortunately, the clean energy projects that result from these programs will benefit red and blue districts alike, creating economic investment in communities and new jobs in addition to improving environmental quality, which should help make the incentives politically durable. So, while some focus will need to be on defending the provisions against budget showdowns, we can expect the Democratic-controlled Senate and President Biden to act as safeguards against budget cuts.
Now that a speaker has been chosen and members have been officially sworn in, legislating can begin.
In the House, Republicans will hold the top positions, giving them control of committee leadership chairs and the opportunity to shift the policy agenda to reflect the interests of the party. While this does not mean climate and clean energy discussions will stop entirely, it does signal a potential change in priorities and framing. In the summer of 2022, House Republicans released a climate and clean energy agenda with the following pillars of focus: Unlock American Resources, Let America Build, American Innovation, Beat China and Russia, Conservation with a Purpose, and Build Resilient Communities. These efforts indicate the GOP’s growing awareness of climate as an animating issue for the younger voters it’s trying to court, and how climate and energy policies are important pathways for maintaining American economic competitiveness.
We also expect to see interest from Republican party leaders on a number of issues related to energy deployment, including permitting and siting policy reform for energy infrastructure, promoting innovation for carbon capture and advanced nuclear energy, and developing the clean energy supply chain.
Implementing the Infrastructure Investment and Jobs Act and the Inflation Reduction Act
New federal legislation isn’t the only avenue for climate action. Through legislation enacted in 2021 and 2022, including the Infrastructure Investment and Jobs Act and the Inflation Reduction Act, Congress has already invested hundreds of billions of dollars in new and existing climate and clean energy programs at various federal agencies. It is critical that agencies implement these programs in a maximally impactful, efficient, and equitable way.
The following programs enacted in the Infrastructure Investment and Jobs Act and Inflation Reduction Act are poised to enter their implementation stage:
- Department of Energy: $3.5 billion for direct air capture hubs; $3.47 billion for carbon capture demonstration and pilots; $8 billion for clean hydrogen hubs; over $8 billion to support the nuclear energy industry; and expansion for the department’s loan authority by nearly $350 billion.
- Department of Treasury: Tax credits with an estimated $270 billion in benefits for: clean energy generation; clean vehicles; clean fuels and fueling infrastructure, including clean hydrogen; carbon capture, utilization, and storage, and direct air capture; and clean manufacturing.
- Environmental Protection Agency: The first ever federal fee on greenhouse gas emissions (a methane “fee” for methane emissions) plus $1.55 billion in funding for a new program at the Environmental Protection Agency (EPA) to curb methane emissions from the oil and gas sector in addition to investing billions of dollars to deploy low- and zero-emission technologies in communities across the country. And $5 billion for grants to states to support planning and implementation of climate pollution reduction strategies.
- US Department of Agriculture: $1 billion for loans for renewable energy infrastructure; $9.7 billion for loans to support the purchase of renewable energy systems.
- Department of Transportation: $2.5 billion for charging and fueling infrastructure for corridors and communities; $6.4 billion for a State Carbon Reduction Program.
There’s a lot of work to be done, some of which is already underway.
Many House Republicans have also signaled intentions to use their new leadership roles to conduct oversight of federal agencies and the implementation of programs established or expanded by the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. While Congress absolutely must continue to play its role in oversight of federal agency activities, it is critical for Congress to choose a constructive oversight agenda that centers good governance and holds the Biden administration – and all decisionmakers – accountable for competent, efficient, and effective implementation of existing law, ensuring that Americans in both red and blue states alike get their fair share of congressionally directed investments and benefits.
Finalizing strong and comprehensive federal environmental regulations
Along with new and already enacted federal legislation, emissions regulations will also continue to play a large role in addressing climate change and improving public health.
Recently, the EPA took a much-needed step forward by releasing an updated proposal to the one released in November 2021 on standards for methane emissions from the oil and gas sector, which is currently open for public comment and likely to be finalized in 2023. Along with finalizing the comprehensive methane rule, EPA can – and must – move ahead with promulgating several other regulations under the Clean Air Act and other federal statutes to reduce greenhouse gas emissions. These emissions standards must include stringent requirements for power plants, industrial facilities, transportation vehicle emissions, and methane from the oil and gas sector. These standards will have an immense positive impact on the environment and public health.
Strong federal regulations, coupled with federal and state legislation, will reduce greenhouse gas emissions and help the U.S. reach its climate goals.
In the states: Midterm election outcomes and future policymaking
States are engines of climate action with a particular superpower: they work both in collaboration with and independent of the federal government. States provide opportunities to establish durable climate policies like clean energy standards, as well as venues to implement new federal legislation and EPA standards for greenhouse gas emissions and other air pollutants.
The midterm elections affirmed broad voter support for state climate action and political opportunities for progress. Residents in 46 states voted in more than 6,000 state legislative races, and 46 governors were on the ballot. The results: Voters elected or re-elected 17 governors that champion strong climate action, Democrats gained control of four previously Republican-held legislative chambers, and the number of divided state governments will be lower in 2023 than it was in 2022. Starting this year, 17 states will have a governor and legislative majorities that favor strong climate action, which creates a historic opportunity to pass laws with policies designed to achieve net-zero greenhouse gas emissions by 2050. States will also begin to help steer hundreds of billions of dollars appropriated in the Infrastructure Investment and Jobs Act and Inflation Reduction Act for demonstration and deployment of clean energy technologies. States will also largely set the pace of the build out of the physical infrastructure required for broad-based uptake of clean energy technologies. Complemented by federal policy and regulations, states play an outsized role in advancing climate policy and can push federal wins even further in their communities.
Where we go from here: Climate action in 2023 and beyond
Elections can create uncertainty around future progress, particularly on climate. However, by advocating for “election-proof” policies that are pragmatic, bipartisan, and therefore durable, CATF will continue to leverage opportunities for action across party lines, no matter the political configuration in statehouses and governors’ mansions, Congress, or the White House.
Creating durable policy through consensus across the aisle
Durable policies that can withstand changes in the political environment are critical for continued progress on climate. That means advocating for policies that have climate, economic, and public health benefits that both parties and their constituencies can get behind. And, because political parties support legislation based on their values and interests, successful policies must garner support on both sides of the aisle and benefit a diverse set of constituencies. CATF identifies these points of consensus by working across the aisle to find opportunities to create and pass long-lasting, successful policy.
One recent example of a successful policy that drew support from both political parties was the SCALE Act, which funded infrastructure for carbon capture and storage. CATF championed this policy, and it was ultimately included in the bipartisan Infrastructure Investment and Jobs Act after garnering support from both Democrats on the left and conservative Republicans.
CATF’s role in federal policy implementation
When fully implemented, the Infrastructure Investment and Jobs Act and the Inflation Reduction Act will bring the U.S. significantly closer to achieving our nationally determined contribution (NDC) under the Paris Agreement. According to an August 2022 analysis from Princeton University’s ZERO Lab, after passing these laws, the U.S. is projected to reduce greenhouse gas emissions 42% by 2030 relative to 2005 levels (the U.S. NDC requires the country to reduce emissions 50-52% by 2030 relative to 2005 levels). But to achieve the full potential of these laws, equitable and efficient policy implementation will be critical. CATF continues to work with policymakers, administration officials, state governments, key industries, and other stakeholders to support implementation, including by:
- Advising agencies and providing recommendations for strategic and equitable use of federal resources to achieve emissions targets.
- Supporting policies in key geographies by working with diverse stakeholders, coalitions, and organizations to ensure policies and other conditions are ready when projects deploy.
- Advising industry to serve as independent experts in stakeholder engagement processes and identify barriers to implementation that need policy solutions.
- Communicating successes to highlight wins in deployment of federal funding to reinforce the benefits of climate policy and support political durability.
Effective climate action takes far more than passing good policy. It requires work at all levels of government, across party lines, and with input and guidance from communities and other stakeholders to turn commitment into action.
Opportunities for policymaking and implementation going forward
Despite heightened political divisiveness, the 2022 midterms have shown that bold commitments to advance a diverse suite of climate and clean energy technologies can foster bipartisan support from policymakers and their constituents. With several historic pieces of legislation under our belts over the last two years, the United States needs to keep up the momentum to advance policy and implement already enacted legislation that will help us achieve our climate goals and realize the benefits of these historic investments.
We’re continuing to work with policymakers, administration officials, state governments, industry leaders, communities, and other stakeholders to advocate for a diverse suite of climate solutions while creating new opportunities for progress through bipartisan action. Taking action to reduce emissions and advance the next generation of clean energy technologies helps secure a prosperous, healthy, and competitive future for the U.S., and working with a diverse network across the country and within communities allows us to continue building durable policies.