The case for a national clean electricity standard.
Last year, presidential candidate Joe Biden campaigned on a bold climate plan that included cleaning up America’s electricity system by 2035 with a federal Clean Electricity Standard (CES). A national CES, which would require utilities increase their share of renewable and carbon pollution-free electricity, is an old idea. But the ambition — 100 percent clean electricity by 2035 — was new.
By the end of the campaign, whenever he brought up climate change, which he did constantly, Biden had one year on his mind: 2035.
The new deadline reflects the scientific facts and the economic opportunity. The US must cut emissions by about half this decade to give the world a shot at limiting warming to 1.5 degrees Celsius. Doing this will create millions of good-paying jobs in the American clean energy economy. But to make progress at the pace and scale that’s necessary, it’s Congress who must focus on building a 100 percent clean electricity system.
That’s why we released a major report Thursday, with Evergreen Action and Data for Progress, which shows how Congress can get this done. As two policy experts and advocates who have focused on cleaning up the electricity sector, we think we have the best shot yet to get this policy passed this year.
Clean electricity is the backbone of the energy transition — the critical piece that all the other sectors will slot into. Not only will getting to 100 percent clean electricity directly cut more than a quarter of US carbon pollution, it will also enable large parts of our transportation, building, and industrial sectors to run on clean power. Powering as much of these sectors as we can with carbon-free electricity would allow us to cut US emissions 70 to 80 percent. It would, in short, solve a huge chunk of our climate challenge.
The climate demands it. The president campaigned on it. And 81 million Americans voted for it. It’s now time for Congress and the administration to deliver. Here’s how they can do it.
A proven, practical, and popular approach
Over the past three decades, 30 states — red and blue alike — have passed laws requiring electric utilities to use more clean energy. Since 2015, 10 states have adopted 100 percent clean electricity standards, requiring the transition to fully 100 percent carbon-free power. And six more have committed to that goal. State laws are popping up so fast, it’s hard to keep track. Across the country, 170 cities have policies to get to 100 percent clean. As a result, more than one in three Americans already live in a place that’s committed to reaching 100 percent clean power.
We know this approach is technologically possible. Wind, solar, batteries, transmission lines, and other technologies can replace dirty fossil fuels. Google, one of the largest electricity consumers in the country, is aiming for 100 percent clean power, real-time at all its facilities by 2030.
With all this state and local leadership, it’s not surprising that this approach is popular with the public. In independent polls from both Data for Progress and the Yale Program on Climate Change Communication, run over the past few months, more than two-thirds of voters support the federal government moving the country to 100 percent clean power by 2035.
And once we implement this policy nationally, it should stay popular because clean energy saves customers money.
Researchers from UC Berkeley, GridLab, and Energy Innovation have shown that we could dramatically clean up our electricity system by 2035 and lower electricity bills. Why? Many utilities continue to operate old, uneconomic coal plants. In just three years, these plants cost customers an additional $3.5 billion to keep open — and that’s before we add in all the extra hospital bills for folks breathing in their pollution day after day. Or the cost of destabilizing our climate. Replacing these dirty plants with clean power is not only good for our health; it’s also good for our wallets.
Clean electricity standards are proven, practical, and popular. What’s missing is federal policy, to ensure that every state and utility is switching from dirty energy to clean sources at the accelerated pace that’s necessary. Without a national CES, we know that utilities will not move fast enough — their own plans show that they won’t. This policy must be at the top of Congress’s to-do list this year.
How Congress can pass a CES through the budget reconciliation process
With the election last month in Georgia, Democrats took control of the Senate. However, their majority is slim. The Democrats and Republicans each have 50 seats, and Vice President Kamala Harris can cast tiebreaking votes in Democrats’ favor.
To pass meaningful legislation, Democrats have two options. They can get rid of the filibuster, an arcane Senate rule that prevents consideration of a bill without 60 votes. Or they must rely on a unique parliamentary process known as budget reconciliation, which allows some bills to pass with a simple majority.
Most voters think Congress should ditch the filibuster, and we certainly agree with them. But so far, some moderate Senate Democrats have expressed reluctance to do that. That means, at least for the time being, we’re talking a lot about option B.
Reconciliation is complicated. Essentially, it’s a legislative process that allows Congress to expedite bills that relate to federal government revenues (like taxes), outlays (spending), or the debt limit. This process allows legislation to pass with a simple majority in the Senate — just 51 votes. However, there are limits to what types of legislation can be included in this process. The criteria are written in the “Byrd Rule.” And this can’t be done all the time; historically, Congress has only used budget reconciliation once each fiscal year.
In our research for our report, we spent months talking with congressional offices, parliamentary experts, think tanks, climate advocates, and others, and have concluded that it is possible to pass a CES through the budget reconciliation process. In our report, we identify several ways a CES can fit with the Byrd Rule.
Most state clean energy laws create a system of credits that utilities and other power producers can get by producing clean power. These “zero-emissions electricity credits” — or ZECs — allow us to measure progress. Through reconciliation, the federal government could create a system of ZECs that live “on the books,” inside the federal budget. Utilities would earn ZECs by continuously increasing the amount of carbon-free electricity they deliver to customers, or else purchase the credits from the federal program.
Another approach would involve the federal government regularly buying a quantity of ZECs from power companies, through auctions. Essentially, companies would submit bids for how much they would like to be paid for the clean power they are producing. The federal government would set the quantity needed that year — for example, 80 percent clean power by 2030 — and purchase ZECs until that target was fulfilled. This approach would keep the costs of the policy low. Auctions have been used successfully in New York state.
A third approach could involve a twist on either of the first two, but with utilities earning clean energy credits for every ton of carbon pollution that they reduce, rather than for every megawatt-hour of clean electricity that they deliver. This is similar to policy recently adopted in Arizona’s new 100 percent clean electricity standard.
There are other alternatives that come close to approximating a federal CES and could also fit within the Byrd Rule. The federal government could provide funding to states with strings attached to ensure they are adopting carbon-free electricity requirements with the ambitious timelines necessary. Another option is a carbon-intensity standard that penalizes power utilities for failing to reduce their emissions. We could also continue to use the tax code to penalize and incentivize utilities, pushing them toward 100 percent clean electricity by 2035.
Each of these approaches can put us on a path to 100 percent clean electricity, even under the constraints of the Byrd Rule. We are confident there are other CES designs that could fit within reconciliation.
On the road to 100 percent clean electricity by 2035, we need to hit 80 percent clean in 2030. This is a critical target for several reasons. It places the emphasis where it should be: on urgent and immediate progress. And it’s doable with the technology we have now.
Some utilities are already aiming for 80 percent clean by 2030, including practically all the ones in Colorado. These utilities, and others, recognize that it’s time to move off of fossil fuels. NIPSCO, in Indiana, has committed to retiring all its coal by 2028 and will not build new gas.
Focusing on 80 percent clean will ensure that we are not distracted by how to squeeze the last, and most difficult, 10 to 20 percent of pollution out of the electricity system. This target is also important because of congressional rules — the budget reconciliation process typically limits a law’s budgetary impact to 10 years. For all these reasons, a federal CES must include this 2030 target.
Congress and the Biden administration must pass other policies alongside a CES, to drive environmental justice and equitable economic opportunity, and promote good union jobs. We outline a number of them in our report, including long-term federal clean energy investments through tax incentives, grants, and public financing; energy transition support through debt retirement for coal plants and financial resources for fossil fuel communities; speeding up electrification of other sectors, including vehicles and buildings; streamlining clean energy siting and permitting; promoting electricity market competition; intervenor compensation to ensure transition costs remain as low as possible; and policies to address the technology innovation gap.
Realistically, Congress will first tackle Covid-19 relief using budget reconciliation, and only turn to Biden’s clean infrastructure agenda in the months to come, during a second budget reconciliation process. Because Congress didn’t pass a budget resolution last year, there are two opportunities to use reconciliation this year.
The Biden administration cannot wait for Congress to act. In the meantime, it must use existing laws to begin making progress toward 100 percent clean electricity right away. Biden’s Environmental Protection Agency already has a clear legal requirement to regulate greenhouse gases under the Clean Air Act, because these pollutants endanger Americans’ health and well-being. It must also act on other dangerous pollution from fossil fuel power plants, advancing regulations that the Trump administration sat on, and reversing rollbacks made over the past four years.
Clean electricity: It is the way
President Biden and Vice President Harris ran and won on a bold plan for climate action.
As the country faces a terrible economic crisis, and the ongoing Covid-19 pandemic, a clean energy recovery is our best opportunity for economic recovery. A CES can create millions of good jobs and drive environmental justice. With a big push on clean power, we could see a net increase of 500,000 to 1 million more good-paying jobs in the energy sector this decade, reaching 2.2 million in the 2030s. If we worked on energy efficiency at the same time, we could get twice as many jobs.
Imagine what it will feel like in 2035, looking back on this moment 15 years from now. If we act now, all of us — everyday people, utility executives, and senators alike — can reflect on this moment and know that when we were called to act, we answered. Solving the climate crisis is possible, if only we are brave enough to see it, if only we are brave enough to do it.
Leah Stokes (@leahstokes) is an assistant professor at UC Santa Barbara, author of Short Circuiting Policy, co-host of the podcast A Matter of Degrees, and a member of the advisory board of Evergreen.
Author: Leah Stokes