Democratic climate hawks were unable to get every provision they wanted into the Inflation Reduction Act, constrained by opposition from their own party and procedural rules. But a new program from the Environmental Protection Agency is dangling a carrot in front of states that may want to implement more aggressive green policies — they just need to apply.
The EPA in September announced the details for a $4.6 billion program aimed at reducing greenhouse gas emissions by allowing lower-level governments to develop plans to fight pollution and compete for funding for their proposals. Birthed by funding from Democrats’ sweeping climate bill passed last year, the Climate Pollution Reduction Grants could possibly pay for a bevy of green provisions that could not be passed at the federal level — including a clean electricity standard, cap and trade programs, carbon taxes, streamlining permitting for renewable energy projects, and more.
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“Tackling the climate crisis requires urgency and collaboration,” EPA administrator Michael Regan said earlier this month in a call to reporters. “Through the program, we have a real opportunity to make meaningful progress toward reducing greenhouse gas emissions, creating good paying jobs, and protecting our planet for generations to come.”
But many of these policies had faced pushback from within the Democratic Party — particularly from centrist Democrat Sen. Joe Manchin (WV), who has yet to decide if he wants to mount a tough reelection bid in 2024 or pursue a long-shot third-party run for the White House. His vote for the Democrats’ climate bill last year provided campaign fodder to Republicans, who have argued that the measure will disadvantage his constituents, who rely heavily on coal and natural gas production.
A $150 billion clean electricity program, one that would reward utilities that switched to renewable energy from burning fossil fuel and penalize those that do not, was cut out of Democrats’ original Build Back Better bill after Manchin expressed opposition to the provisions.
The West Virginia Democrat had reasoned at the time that he was opposed to the program funneling taxpayer dollars to private companies that were already putting in muscle to transition to renewable energy.
But even following the rewrite of the bill that excluded the clean electricity program, Manchin railed against the legislation for its high price tag. The Inflation Reduction Act, negotiated by Senate Majority Leader Chuck Schumer (D-NY) and Manchin and signed into law last year, is a scaled-down version of the original bill.
The other provisions that are listed as possible funding initiatives have also faced notable opposition in Congress. Sweeping permitting reform has faced a deadlock in a divided Congress — and faces slim chances of passing both chambers before the election year. Democrats’ 2010 clean energy bill would have implemented an emissions trading system similar to the European Union’s but was eventually stalled in the Senate.
Even before becoming a senator, Manchin was campaigning against his own party’s climate policy — running an ad in which he shouldered a rifle and shot a copy of the cap-and-trade bill, arguing that it’s “bad for West Virginia.”
A spokesperson for Manchin did not respond to a request for comment about the program.
What does the program do?
The CPRG program is a competitive grant initiative that will give states IRA money to plan and implement policies that reduce climate pollution while fitting localized needs. The EPA anticipates awarding 30 to 115 grants to states, municipalities, and agencies, ranging between $2 million and $500 million. But in order to win the grant, the EPA will “prioritize measures that achieve the greatest amount of greenhouse gas emission reductions,” according to Regan.
The EPA’s list of greenhouse gas reduction measures that could possibly be funded is expansive. An EPA spokesperson told the Washington Examiner that the program was “intentionally broad in scope” to give states, cities, and tribes flexibility in crafting their own legislation that’s best suited to local demands.
“Nearly every state, as well as many major cities, opted in to receive planning funds, and are currently in the process of developing their plans, so we cannot speculate at this point about what the plans will include,” Khanya Brann, a spokesperson for the agency, wrote in a statement. “We are not prescribing any particular projects or technology, since we know there are many, many opportunities at the state, local, and Tribal levels—but we can say that we will be looking for projects that can drive the biggest reductions in greenhouse gas emissions and deliver substantial benefits to low income and disadvantaged communities.”
The program will also prioritize plans that work to benefit low-income and disadvantaged communities.
The deadline for entities to apply for the grants is April 2024, while the EPA expects to award the funding in fall of next year.
Forty-six states have already applied for the initial tranche of funding – $250 million — allocated to states, municipalities, tribes, and air pollution control agencies to develop the details of these plans. This funding has allowed states like Georgia to come up with first-ever proposals to address climate change.
But some state governments, such as Florida, Iowa, Kentucky, and South Dakota, did not apply for the grants for various reasons. Instead, cities within these states applied to the program directly — therefore qualifying them for the second, larger pot of money.
In a statement to the Washington Examiner, Kentucky Energy and Environment Cabinet spokesman John Mura said the administration of Gov. Andy Beshear (D-KY) had determined that local governments were “best situated” to directly apply for the funds, citing cities Louisville, Lexington, and Bowling Green as participating in the program.
Brian Miller, a press secretary for the Florida Department of Environmental Protection, stated that the agency had concerns about the “lack of clarity and definition of criteria for this program, as well as the rushed process to commit to deliverables that may include activities outside of the Florida Department of Environmental Protection’s (DEP) statutory authorities.” Ian Fury, the chief of communications for Republican Gov. Kristi Noem of South Dakota, stated that the governor was concerned about “wasteful spending.”
Iowa Economic Development Authority Director Debi Durham told Axios the government declined the money because it was redundant with a state initiative and that it was better to stay the course rather than create a new plan through the federal program.
Many of the governors of these states are generating a lot of buzz ahead of 2024, but for different reasons. Gov. Ron DeSantis (R-FL) is a candidate in the GOP presidential primary — and made headlines when he rejected a large sum of IRA funds. Gov. Kristi Noem (R-SD) has been mentioned as a possible running mate for former president and GOP candidate Donald Trump. And Beshear faces a tough reelection bid in the historically red state of Kentucky.
How the other side feels about the program
A number of critics are raising concerns with the program, labeling it as a maneuver to work around what couldn’t be passed through Congress.
“The EPA’s climate grant program under the Inflation Reduction Act is a thinly veiled bribe to state, local, and tribal governments to enact laws that Congress could not pass and to endorse tighter state regulations than what’s established in federal law,” said Travis Fisher, the director of energy and environmental policy studies at the Cato Institute.
Rep. Bill Johnson (R-OH), a subcommittee chairman on House Energy and Commerce, had particular concerns about renewable energy permitting listed as a possible measure to be funded in the program, advocating for a broader energy portfolio.
“Congress didn't appropriate that money for that purpose,” he said. “If we're going to have permitting reform, it needs to be across the board for a true all-of-the-above energy policy. Not only renewables but coal, natural gas, nuclear, all of the above."
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Sen. Shelley Moore Capito (R-WV), the ranking member of the Environment Public Works Committee, said she would be “closely tracking” IRA funding, including the Climate Pollution Reduction Grants program.
“The American people deserve a light shone on the taxpayer money that the administration is trying to shovel out as part of the Democrats’ trillion dollar spending spree,” she said in a written statement.