CLEAN Future Proposal Offers Details on House Democrats' Vision for Climate Legislation

Senior Democrats from the U.S. House Committee on Energy and Commerce introduced on March 2, 2021, their comprehensive climate bill, the Climate Leadership and Environmental Action for our Nation's (CLEAN) Future Act. The legislation, which was announced and initially circulated as a discussion draft in January 2020, sets an economy-wide goal of reaching net-zero national greenhouse gas (GHG) emissions by 2050. Many House Democrats view this proposal as the basis for climate-oriented infrastructure legislation that Democrats in Congress are eager to pass in 2021.

The new proposal includes several updates compared to the discussion draft circulated in 2020. Most notably, the proposal sets an interim national goal for the United States to achieve 50 percent GHG emissions reductions by 2030, driving near-term action on emissions reductions, particularly in sectors where technologies for decarbonization are more developed. Like the proposal before it, though, implementation of the economy-wide target is decentralized, with federal agencies and the states tasked with developing individual strategies and plans to reach the top-line goals. This iteration also includes a greater focus on worker and community transition, environmental justice and waste reduction.

From an economy-wide perspective, the bill includes several key provisions that will impact entities of all types across the United States. Most notably, it would direct the U.S. Securities and Exchange Commission (SEC) to require public companies to disclose information about their exposure to climate-related risks – an issue gaining significant momentum within the Democratic caucus. The bill significantly bolsters the funding it makes available, establishing a juggernaut Clean Energy and Sustainability Accelerator capitalized with $100 billion to help states, cities, communities and businesses transition to a clean energy economy. The move will drive up the price tag associated with the proposal and is likely to draw the ire of deficit hawks.

The committee also provided a section-by-section summary, an overview of new provisions and a one-page outline of the measure.

Significant updates in this new iteration are further outlined below:

Power Sector

• Offers more detail on the federal Clean Electricity Standard (CES) that puts the U.S. on a path to 100 percent clean electricity generation by 2035, including:
• interim targets for retail electricity suppliers of 80 percent clean electricity generation by 2030 and 100 percent by 2035, with an added extension provision allowing the U.S. Environmental Protection Agency (EPA) to extend an individual supplier's compliance obligation in the 2030s under certain circumstances
• phasing out of partial credit options for fossil fuel-powered plants
• limitation on waste-to-energy facilities requiring EPA certification every 18 months
• requirement for prevailing wages for construction of new generating units, and all qualifying generation must remain neutral with respect to the right to organize and bargain
• Supports transmission buildout, including updating and restoring federal backstop siting authority and the establishment of an Office of Transmission at the Federal Energy Regulatory Commission (FERC)

Efficiency

• Establishes a benchmarking program to track commercial and multifamily building energy and water use to advance efforts to reduce energy and water consumption and GHG emissions at these buildings
• Establishes annual targets for federal facilities to improve energy and water use efficiency under the Federal Energy Management Program (FEMP)
• Provides funding for projects related to resiliency, energy efficiency, renewable energy and grid integration at public facilities
• Creates and expands programs to provide rebates to homeowners to defray the costs of retrofitting home to be wildfire-resistant and to support home-energy-savings retrofits

Transportation

• Expands support for electric vehicles (EVs), including adequate standards related to EV supply equipment (EVSE) to ensure the industry has the resources to meet public demand and offer EVs to underserved or disadvantaged communities
• Establishes an EPA grant program to reduce GHG emissions and other forms of air pollution at ports; authorized to invest $2 billion annually to decarbonize and electrify port infrastructure and operations
• Creates a deadline for the annual submission of petitions to extend small refinery exemptions under the renewable fuels program, and increases transparency by making certain information from those petitions subject to public disclosure

Industrial

• Provides more detail on the "Buy Clean Program" to reduce emissions from materials and products used in federally funded projects
• Establishes a Climate Star program to identify and promote cleaner products through voluntary labeling and federal procurement requirements
• Updates the performance standards process to ensure adequate consideration of the various factors and complexities of eligible material manufacturing
• Creates a U.S. Department of Energy (DOE) grant program to support manufacturing of clean energy systems and decarbonization of energy-intensive product manufacturing
• Establishes a Sustainable Industry Rebate Program at the DOE to assist industrial facilities in making upgrades to improve energy and water efficiency and reduce GHG pollution
• Establishes an Industrial Efficiency Working Group to assess technologies and maintain a comprehensive list of those that qualify for a rebate

Environmental Justice

• Includes an overarching requirement that 40 percent of funds made available under the CLEAN Future Act benefit environmental justice communities
• Creates a new program with high labor standards to pay for lead service line removal across the country that uses American-made iron and steel at no cost to states or homeowners; the program will prioritize disadvantaged communities
• Restricts air pollution permits from being issued or renewed for major sources in census tracts already overburdened by pollution
• Sets a 10-year deadline for the cleanup of all federal Superfund sites that are vulnerable to the effects of climate change
• Establishes a timeline for the EPA to assess and address cumulative public health risks
• Requires significant expansion of air quality monitoring for toxic air pollutants in fenceline communities, a rapid expansion of the national ambient air monitoring network in overburdened communities and increased community access to information about air quality
• Establishes an environmental justice clearinghouse with information on the EPA's related activities, technical expert and community group directories, and linguistically appropriate information

Waste Reduction

• Places a temporary pause on the permitting of new and expanded plastic production and related facilities, during which the EPA must update clean air regulations to limit emissions from these facilities
• Establishes EPA grant programs to invest in community-level zero-waste initiatives to reduce the amount of waste that ends up in landfills and to improve education and outreach related to recycling and waste reduction at the federal, state and local levels
• Establishes programs and measures to improve the collection, recycling and reuse of batteries and other forms of electronic waste

Worker and Community Transition

• Establishes an Office of Energy and Economic Transition in the Executive Office of the President to coordinate federal activities concerning worker and community transition
• Creates programs to provide financial and technical assistance to local governments and community-based organizations that need educational and training programs or have lost significant amounts of revenue due to the nation's transition to net-zero GHG emissions

For more information about the CLEAN Future Act or other topics addressed in this alert, please contact the authors.

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