Thursday, December 5, 2024

GOP battle brews over clean energy tax credits

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By Arianna Skibell

Presented by Chevron

Rep. Nick LaLota (R-N.Y.) talks at a press conference.

Rep. Nick LaLota (R-N.Y.) at a press conference in March 2023. “You can't throw the baby out with the bath water," he said of climate law tax credits. | Drew Angerer/AFP via Getty Images

Republican lawmakers will soon have the power to carve up Democrats’ landmark climate law — something they’ve been hungry to do since it passed in 2022.

But as the reality of clawing back hundreds of billions of dollars in clean energy tax breaks sinks in, some GOP lawmakers and business groups are amplifying their concerns that such a move might be a big mistake, write Andres Picon and Emma Dumain.

The brewing discord is just one point of contention bubbling within the GOP, threatening to undermine the party’s ability to swiftly deliver President-elect Donald Trump’s agenda. With thin margins in the House and Senate, there is little wiggle room as leadership tries to wrangle members with varied priorities.

Republican lawmakers whose districts stand to benefit from the Inflation Reduction Act have been making noise for a while now, but party strife intensified this week when incoming Senate Majority Leader John Thune laid out a plan to pass sweeping legislation on taxes, energy and immigration.

Thune wants two bills: the first on energy and immigration, and the second on taxes. That angered some members of his party who want to tackle taxes first and others who say a tax bill will have a better shot if it's included in a larger package.

Still other lawmakers were upset that Thune plans to include a provision in the first bill that would roll back the IRA’s $7,500 electric vehicle tax credit and other clean energy incentives. The law’s investments have prompted clean energy companies to flock to numerous red states, creating jobs and boosting local economies.

Georgia Republican Rep. Buddy Carter, whose district is home to a Hyundai EV manufacturing plant that has received $5.5 billion from the IRA, said his party’s approach should be more targeted and less sweeping.

“I think that they understand that there may be parts of it that can help us secure our supply chain. There may be parts of it that help us with domestic manufacturing,” Carter said. “And if there are, then we should look at keeping it.”

Businesses hoping to continue benefiting from the climate law’s energy and manufacturing incentives — such as Avangrid and Samsung — also took to the Hill this week, where they met with lawmakers to push back against possible cuts.

Democratic Sen. Tom Carper of Delaware, who is retiring as chair of the Senate Environment and Public Works Committee, compared the IRA to the Affordable Care Act — an initially polarizing law that gained bipartisan backing as policymakers, businesses and individuals reaped benefits.

“Oh, they’ll try” to repeal clean energy incentives, Carper predicted, “but market forces actually took place with the ACA and saved it, and market forces will do the same with IRA.”

 

It's Thursday — thank you for tuning in to POLITICO's Power Switch. I'm your host, Arianna Skibell. Power Switch is brought to you by the journalists behind E&E News and POLITICO Energy. Send your tips, comments, questions to askibell@eenews.net.

 

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Power Centers

Jared Isaacman stands in front of the recovered first stage of a Falcon 9 rocket.

Jared Isaacman stands in front of the recovered first stage of a Falcon 9 rocket at SpaceX on Feb. 2, 2021, in Hawthorne, California. | Patrick T. Fallon/AFP via Getty Images

What Trump’s NASA pick means for climate science
Trump’s pick for NASA administrator is an experienced commercial astronaut who staunchly supports increased investment in human-crewed space exploration, writes Chelsea Harvey.

But Jared Isaacman’s views on climate change — a major NASA research priority — remain unclear. The billionaire has described himself as a “moderate who occasionally weighs in on various issues” and who is “firmly anchored in the middle.”

More gas for data centers
The nation's largest grid operator has a new strategy to meet the growing energy demands from data centers run by U.S. technology giants: more natural gas, writes Peter Behr.

PJM Interconnection's plan would prioritize gas-fired generation over carbon-free wind and solar projects. The strategy must first be approved by the Federal Energy Regulatory Commission before it can take effect.

Russia circumvents sanctions
Russia will loosen restrictions on the way foreign countries must pay for its fossil fuels in order to bypass new sanctions imposed by Washington, writes Gabriel Gavin.

President Vladimir Putin has scrapped requirements for funds to be paid through Gazprombank. That bank is the target of new U.S. Treasury Department sanctions designed to deprive Moscow of revenue it's using to continue waging war on Ukraine.

In Other News

Roll backs: What Trump’s second administration could mean for environmental justice.

Life after death: America’s cemeteries are rewilding.

 

Billions in spending. Critical foreign aid. Immigration reform. The final weeks of 2024 could bring major policy changes. Inside Congress provides daily insights into how Congressional leaders are navigating these high-stakes issues. Subscribe today.

 
 
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Legal adviser to the U.S. Department of State Margaret Taylor attends a climate hearing.

Margaret Taylor, the legal adviser to the State Department, attends a climate hearing at the International Court of Justice on Wednesday. | Robin van Lonkhuijsen/ANP/AFP via Getty Images

The United States downplayed its obligation to address climate change during an international court hearing Wednesday aimed at determining whether countries are violating international law by polluting the atmosphere.

A top official leading the federal government’s buildout of electric vehicle charging stations defended the program’s rollout against criticisms about its slow pace, saying “we are where we thought we’d be.”

Projected power demand growth in the United States jumped by a factor of five in the past two years, according to a new report.

The Treasury Department finalized rules for a major clean energy tax cut, potentially offering a big boost to offshore wind, geothermal, energy storage and other sectors.

That's it for today, folks! Thanks for reading.

 

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