Exactly two years ago, President Joe Biden signed the Inflation Reduction Act into law. With more than $800 billion devoted to renewables, batteries, transmission, carbon removal, electric vehicles, and the factories to build them, the bill is America’s largest-ever investment in climate solutions. 

Yet the rollout of the IRA hasn’t been the smoothest. Some projects have been slow to come online, and polls show that many voters remain unaware of its impact.

In today’s episode, the hosts are joined by veteran Democrat John Podesta, a key player in crafting the IRA. Podesta currently serves as senior adviser to President Biden for clean energy innovation and implementation.

In the interview, Podesta reflects on the bill’s triumphs over the past two years, and addresses concerns around its implementation — voters’ unfamiliarity with the bill, reports that 40% of IRA projects have been delayed or paused, and general apprehension that the bill can’t reach its full potential without expansive permitting reform.

Later in the show, the hosts take a quick look at two new federal bills that could also impact the future of clean energy in America: a bipartisan stab at permitting reform from Senators Manchin and Barrasso, and a plan to bar Chinese companies from benefiting from the IRA.

Transcript

Julia Pyper: The Olympics just came to a close, guys, I'm sure you all watched as I did. Brandon, who do you think are the Olympians of the climate and clean energy movement right now?

Brandon Hurlbut: Forum Energy is the Katie Ledecky of the energy transition, because they can go the distance,

Julia Pyper: Long duration.

Brandon Hurlbut: Long duration.

Julia Pyper: Who would be the Simone Biles, just the all-around rock star?

Emily Domenech: I mean, I think that's got to be Nuclear Power, right? They can stay on all day long. 

Julia Pyper: Hey! (laughs)

Julia Pyper: Welcome back to Political Climate. I'm Julia Pyper. Two years ago today President Joe Biden signed his flagship climate bill, the Inflation Reduction Act into law, with over $800 billion devoted to renewables, batteries, transmission, carbon removal, electric vehicles, and the factories to build them, it's the biggest ever American investment in climate solutions. Yet, the IRA has not been without its complications. Some projects have been slow to come online and polls show that a plurality of voters aren't aware of the bill's impact. On today's episode we're joined by John Podesta, a Democratic political powerhouse and key adviser to several presidents. Podesta currently serves as the senior adviser to President Biden for clean energy innovation and implementation, and has been a central figure in the rollout of the IRA. Earlier this week Podesta sat down with Josh Freed, Senior Vice President for Climate and Energy at the think tank Third Way for a fireside chat about the bill before its two-year anniversary.

John Podesta: That law makes the largest investment in climate and clean energy, not only in the history of America, but in the history of the world.

Julia Pyper: We were lucky to catch up with Podesta after the event to explore a handful of questions surrounding the IRA's future. How can Democrats most effectively pitch the bill to the American public? What's been surprising about how the IRA has been received? And what are some of the remaining roadblocks to realizing its full potential? And then after our interview we'll take a quick look at two new federal bills that could dramatically impact the IRA and the future of clean energy in America. Per usual, I'm joined by my two wonderful co-hosts, Brandon Hurlbut and Emily Domenech. Brandon served as chief of staff in President Obama's energy department, and went on to found Boundary Stone Partners and Overture VC. Emily served as Senior Energy Advisor to Speakers of the House Kevin McCarthy and Mike Johnson, and is now a senior vice president at Boundary Stone. Hey guys, how are you doing? Getting pumped up for the DNC there, Brandon?

Brandon Hurlbut: I'm so excited. It's in my hometown of Chicago. We're all going to be there from Political Climate, so if any of you out in our audience are going to be there or your boss is going to be there, let us know. We want to talk to you.

Julia Pyper: So Emily, you're going to be at the DNC too. Is this going to be your first?

Emily Domenech: This is going to be my first DNC. Ironically, a few weeks ago at the RNC was my first time at the RNC too, which is kind of wild considering how long I have been in the political game. But I'm going to do my best not to catch on fire as the one Republican in Chicago.

Julia Pyper: Well, Political Climate will be there, as Brandon mentioned. We'll probably be running around a lot. We want to be there and capture the moment and mark the IRA anniversary, how successful it's been from the folks who've been on the ground deploying a lot of the solutions enabled by the bill, get a sense of the feeling on the ground, the vibe, how are people feeling about Kamala Harris as the nominee? And to look to the future. So yeah, do reach out if you are going to be there. We'd love to connect.

Emily Domenech: Particularly if you want to talk about permitting reform, because I'm still going to be doing that in Chicago.

Brandon Hurlbut: What a different environment from a couple of weeks ago, right? I mean, there's going to be so much energy and enthusiasm at this convention. I'm really excited that we're going.

Julia Pyper: Before we turn to our interview, let's take stock of some of the biggest IRA achievements to date. Podesta offered a highlight reel at the third way event this week, so let's hear how Biden's Senior Climate Advisor marked the moment.

John Podesta: It tackles climate pollution in every economic sector, power, transportation, buildings, industry, agriculture and forestry. And it does all this by investing in workers, communities and families. The IRA invests in workers by catalyzing a clean energy boom that's creating good paying union jobs all across America. The law does this with a government-enabled but private sector led approach. Providing 10-plus years of certainty through expanded and enhanced clean and enhance clean energy tax credits, signaling to businesses that they can think big and make long-term decisions. That's given the private sector the certainty it needed to announce more than $415 billion in new clean energy investments since President Biden and Vice President Harris took office, 265 billion of that investment's been announced since the Inflation Reduction Act passed. And since that date, just two years ago this week, there have been, according to independent study, more than 300,000 jobs created as a result of the passage of that act.

The IRA effectively make strong labor standards an offer the private sector can't refuse by providing five times the value of tax credits when developers pay prevailing wages. According to the Treasury analysis, since the IRA passed, 75% of clean energy investments have been in counties with lower than medium household incomes. Clean energy investments in traditional energy communities have doubled in the past two years. And federal dollars are directly flowing into communities through the grant side of the law as well. Last week the Treasury Department, the IRS released the first public data on the IRA's consumer clean energy tax incentives. The new analysis shows that in 2023 more than 3.4 million American families benefited from $8.4 billion in tax credits to lower the cost of clean energy and energy efficiency upgrades to their homes. Have we solved every challenge facing the clean energy economy? Of course not. But the bottom line is this, two years in the largest climate investment in history is working.

Julia Pyper: And with that, let's turn now to our interview. John Podesta is one of the most influential figures in Democratic politics. He served as chief of staff to President Clinton, counselor to President Obama and chaired Hillary Clinton's 2016 campaign. In 2003 he founded the prominent think tank The Center for American Progress. We had the pleasure of interviewing John several years ago and the run-up to the 2020 election on actions Biden could take to address climate change should he win the White House. Flash forward, the Inflation Reduction Act has passed and Podesta was tapped by President Biden to lead implementation of the landmark climate law. He joins us now to talk about how the rollout is going two years in. John, welcome back to the show.

John Podesta: It's great to be back. And we talked before about what President Biden could do and then he went and did it. So, we're very excited that we're two years into the Inflation Reduction Act and we're seeing investments happen all across the country, north, south, east, west. And emissions coming down. So, it's great to be back to reflect about what's happened and where we need to go from here.

Julia Pyper: A lot of our audience will be familiar with the law, some may have worked on it in alignment with your teams, with Congress. They're maybe on the implementing side of turning a lot of these, utilizing these policies to make them a reality. What are some of the things that you think maybe need more attention when it comes to IRA implementation and the rollout and the law more broadly? Is there an innovative technology you'd maybe highlight that the law has enabled? Or is there a community impact you think we all need to appreciate a little bit more two years down the road?

John Podesta: Well, that's a big question, Julia. Let me start by saying that the bulk of the support, this is the largest investment in clean energy and climate change, and not just in the history of the United States, but the history of the world. It's largely government enabled, but private sector led. It's done through support in the tax code to deploy clean energy technologies in every emitting sector, power, transportation, industry, buildings, agriculture and forestry. One of the most interesting features though of the bill is that it has a feature that permits nonprofit organizations, cities, towns, counties, local government to take advantage of the credits that used to only be available to private companies. And so, we're seeing the deployment by healthcare systems, nonprofits, et cetera, contribute to building out this clean energy future for the country. And we're doing it in a way that supports good paying jobs in all these sectors and across the country.

Julia Pyper: You're referring there to the direct pay feature of the tax credits available to yes, schools, nonprofit schools, other types of nonprofit entities. Indeed, that was a massive development with the IRA, and excited to see those institutions in particular see some of those benefits.

John Podesta: Yeah, I'll give you a specific example. One of the credits in the Inflation Reduction Act was intended to deploy rooftop solar and community solar in disadvantaged communities. The Boston Medical Center in Boston took advantage of that, got an allocation of the credit. They not only are decarbonizing their electricity use and saving money in the process, but it's a hospital system that serves low-income people, people of color, 70% of their patients are on public insurance, Medicaid and other public insurance. And they're passing those savings along to the families, the low-income families that are coming to the Center for Medical Service, they're helping to support lowering their electricity bills even as they're saving money themselves. So, this is a virtuous cycle that people are really feeling on the ground and we're very proud of it.

Brandon Hurlbut: Most Americans don't know the benefits of the IRA. And many of our listeners, as Julia said, they're implementing this, their CEOs, their investors, they're working on the policy. The communications landscape has changed a lot over your many decades of service. What is the best way for our listeners to communicate the benefits of the IRA?

John Podesta: The Treasury Department just last week issued a report that said 3.4 million families took advantage of the tax credits and the Inflation Reduction Act to reduce their own energy bills through Rooftop Solar using energy efficient technologies, better insulation, windows, doors, et cetera. I think one of the most important things is neighbor-to-neighbor conversations. The ability for people to understand that they can personally benefit, reduce their bills, access these energy savings technologies is really quite important. That's what's really going to count. I think on the investment side and the job side we've seen now just a tremendous uptake as a result of the Inflation Reduction Act of $415 billion of investments in clean energy manufacturing deployment just since president, vice president took office, 265 billion of that since the Inflation Reduction Act passed. 

Climate Power just issued a report that found that there are already 300,000 jobs and counting across the country, 334,000 I think is their current account, and counting. And as I said, it's happening all across the country. And so people are beginning to feel that impact as they're going to work in these clean energy industries. And as a result of the fact that private companies have the ability to get a five X bonus in many of these credits if they pay prevailing wage and you certified apprentices, those are good paying jobs, union jobs that are being supported really all across the country. I think, as I said in a speech in Washington this week, we really made the private sector an offer they couldn't refuse. If you're getting a five X bonus, you'd have to have your head examined not to pay a family level living wage and use certified apprentices that are coming from the strong programs that train apprentices from unions and community colleges and other sources.

Julia Pyper: I have to say the home energy tax credits you mentioned are near and dear to my heart as my day job at GoodLeap is about enabling those. We work with contractors all over the country, some of whom aren't following politics and policy day-to-day, right? So, educating them and having them be aware of what's available at the kitchen table is another, I think channel for us to not just tout the IRA, but really get the benefits into customer's hands where they need it most. These are essential upgrades in many cases like air conditioning in a heat wave in California. And so making sure folks can get the most efficient low-carbon technology is a place where we think we can really step in and feel the benefits.

John Podesta: Yeah, I think particularly in the heating and cooling space, which are really point of failure purchases. Most people don't go out and say, "I want to shop for a more efficient furnace." Their furnace breaks, and then they say, "What are my options?" And I think the support that the bill gives to converting to heat pumps and more efficient use of appliances would save ... And the ability to write those down at the point of sale, but then save money every month after that, is really a critical element of the bill. But that requires them to know that they need to engage with somebody they trust to give them options, and that's often the people who are, as you noted, installers or contractors who are coming to the House who they're used to dealing with.

The Department of Energy has deployed money to increase training of small business and those installers. But the understanding the economics of that, working with the private sector, particularly at the point of sale, to make sure that people understand that they can really save a lot of money, really thousands of dollars a year if they switch to more efficient appliances.

Julia Pyper: So sir, we're also speaking on the day that the White House announced it has fully committed the Greenhouse Gas Reduction Fund's $27 billion, many of those benefits will go directly to homeowners. What can you say about this milestone and what it meant to get those dollars out the door?

John Podesta: This was a tremendously innovative program to provide financing to deploy clean energy, really aimed at moving it into, again, disadvantaged communities to working class communities around the country, to Indian tribes, to other places around the country. And it was done, it was a big program, had to start from scratch in 2022, to create this mechanism that is really operating through community-based financial institutions, through a couple of larger grantees who can build bigger projects, and through a Solar for All program that was championed in the Congress by Senator Bernie Sanders to make sure that the benefits of deployment and the reductions in bills that can come from deployment of solar power could reach working people and lower income people. 

That was a monumental task to get that program up and going, and the awards were made last spring. And today EPA has announced that that money is obligated, that money will be flowing to those community-based financial institutions, state green banks, other financial intermediaries that can deploy that money to lower the cost of deployment really across the country. So, it's a huge achievement, and I want to give a shout-out to Administrator Michael Regan and Jahi Weiss who ran the program over there, for building that from scratch and being able to do this in a way that's going to ensure that people are feeling the benefits of that in the very near future.

Julia Pyper: Deploy, deploy, deploy.

John Podesta: Speed and scale, Julia.

Julia Pyper: I love it. Yep, we're here for it.

Emily Domenech: I want to take it back a little bit to IRA implementation. I think it's hard for us to talk about this topic without talking about permitting reform, particularly since the International Monetary Fund found that if we have permitting delays through 2030, the emissions reduction capability of the IRA declines by about a third, which is a pretty significant percentage. You publicly endorsed Senator Manchin's last effort at permitting reform, but then the White House later walked away from that position in negotiations with House Republicans. And with Manchin's latest effort you've said it has some problematic provisions that need fixing, but haven't taken as strong a position on the bill. Do you think that permitting reform is necessary to fully implement the IRA, and if so, how do you convince climate activists that this is a good deal for them?

John Podesta: Well, Emily, you've written history a little bit on who did what on Manchin's earlier bill, which was presented on this in the Senate after the IRA passed in 2022. It was the Republicans that voted it down in the Senate, not us walking away from it. But having said that, look, we've said that we need permitting reform. We put a bunch of specific proposals on the table. I want to start with what we've already done. We've tried to make more efficient permitting process the order of the day in the administration, we meet at the cabinet level. I've been around the track here a little bit. This is the first time in history I've seen cabinet secretaries get down and really engage on individual permitting decisions, trying to work through bottlenecks, try to mitigate where there is an environmental issue that needs resolution. We've deployed a billion dollars that was included in the IRA, the Inflation Reduction Act, to increase the permitting workforce in federal agencies and the technology that's gone along with it.

We, for the first time using authority that was granted to the president in the Bush administration, but never utilized to give the Secretary of Energy the ability to set strict time limits and move the process along on transmission. We've implemented the rather modest permitting reform provisions that were included in the Fiscal Responsibility Act, I think that you worked on, Emily. So, we're doing what we can under the current set of statutes, but we think more needs to be done, particularly to ensure that we have the infrastructure, the transmission, the interconnection that's necessary to power what is now an increasing use of electricity from everything from electrifying transportation, to buildings, to data centers, to artificial intelligence. And there's a room for Congress to do more here, I think, and we've made our views known. There are a couple of provisions that we think need to be adjusted in the bill that just came out of the Senate Energy Committee, but we'll look forward to talking to both Houses. And I have said, I don't anticipate this is likely to happen in September, there's-

Emily Domenech: Tough in an election year, for sure, for sure.

John Podesta: It’s a short session before the election, but I'm almost certain there'll be a lame-duck session. Maybe we can work something out, but right now it's legislation that's just been reported from the Energy Committee, and we've let the Senate know that we have a couple of concerns with it, but there's some things we like in it too. I think it improves the efficiency, particularly in that transmission sector.

Emily Domenech: Certainly. Well, I think we can agree that it's something that we want to keep working on, for sure.

John Podesta: Yeah. Well, maybe one of the few bipartisan things that we can come to agreement on.

Julia Pyper: Absolutely. In the spirit of realizing the full potential of the IRA, I do want to ask you about a report from the Financial Times that found 40% of the biggest manufacturing announcements made in the first year of the IRA, so going back a bit in time. The first year of the IRA and CHIPS in fact have been delayed or paused, and the report cited a number of potential reasons for this, tough macroeconomic backdrop, competition with China, need for additional policy guidance in some cases, and broader political uncertainty in the run-up to this November election. I'm wondering what you make of this report and seeing these projects actually come to fruition?

John Podesta: Look, we think these investments are going on. We thought that the report kind of cherry-picked through anecdotes in a bunch of data. They didn't note, I think the overall statistics, which is that manufacturing investment has hit an all-time high in six consecutive quarters. That's largely been driven by these clean energy and CHIPS investments. We've seen 20,000 construction workers added to the payroll every month in 2024, so there's a lot going on around the country. And of course, these are big projects. Sometimes they end up taking longer than originally announced, but we think that we're on track to see a huge contribution to the overall economy from clean energy investments. Just yesterday the largest direct air capture plant in the country broke ground with bipartisan support in Oklahoma, and we welcome that. It's a technology that we're going to need in order to reach the net-zero goal by mid-century to take as much carbon out of the atmosphere as we're putting into it by the middle of the next century.

And we're seeing projects being built in the EV supply chain and in batteries and critical minerals. I was out in California where there's a great promise to extract lithium from the brines of the Salton Sea to new development in offshore wind, et cetera. Are there hiccups? Yes. Do we try to overcome them? Yes, but I think we're seeing remarkable progress and the private sectors remains enthusiastic about the ability to invest in America. I've picked up running around the world as part of my portfolio these days as well. After Secretary Kerry left the administration I'm trying to coordinate the international climate policy. And all I hear from both governments, I hear from private sector overseas that they want to come invest in America, and I hear from governments, "Why are you getting all this investment and why can't we have some?"

And I think there's plenty of room for this, because there really is a challenge from an economic security perspective to reduce our dependency on China for the source, particularly of critical minerals of battery components and upstream solar components. So, we want our friends and our allies to invest along with us, but we're seeing tremendous levels of investment in all those technologies here in the U.S.

Brandon Hurlbut: John, a few years ago we were sitting on your porch and it appeared you were about to ride off into the sunset. You made a Godfather reference before, I'll make another one, just when you tried to get out, they pulled you back in. Now that you've added this Biden chapter to your storied career, what are you most proud of over the last few decades?

John Podesta: I'm not a very self-reflective person, but I think the fact that we have taken the challenge of climate change and turned it into an opportunity, particularly for working people. I grew up in a blue collar neighborhood in Chicago, you know this, Brandon.

Brandon Hurlbut: Mm-hmm.

John Podesta: My dad had to leave high school after a year. He worked in a factory his whole life. The fact that we're not only tackling the climate crisis, we're not only reducing emissions, but we're doing it in a way that's spreading those benefits to working people all across the country is something that I relate to and extremely proud of. My team here gets tired of hearing me talk about this, but one of the unsung programs of the Inflation Reduction Act was the effort to plant trees in urban neighborhoods, which I really related to, because those urban cores are so much hotter than suburban neighborhoods. It was an initiative that was championed by Cory Booker. We deployed $1.5 billion to plant trees, reduce the heat load in the urban core, reduce pollution, and that has benefits for the young people growing up in those neighborhoods, for elderly people who are having to contend with that extreme heat.

So, I can go here and there. I talk about what we've been able to do on conservation now through three presidents, through President Clinton, President Obama, and now President Biden that in preserving great places. But I think it's those things that really get to benefit working people that I'm most proud of.

Julia Pyper: It's a very inspiring legacy and one with a lot of different elements to it. Folks who work in technology, who work in community organizing, who work in environmental solutions, air quality, a lot of stuff there that's making I think the country a better place for people to grow and thrive and prosper. So, thank you sir for your service. Thank you for taking the time with us. We really appreciate it.

John Podesta: Nice to be with you.

Julia Pyper: All right, well, always great to sit down with someone who's on the inside of actually implementing one of the landmark laws we all hear and know so much about. Emily, I'd love to go to you first. What were your takeaways hearing from John Podesta directly on some of these policies he's working on?

Emily Domenech: I mean, I think he's going to come out and be a cheerleader for the policies he's put his name on. I think that's not a surprise to us or probably, or our listeners. But I think there's still some big questions for the White House to answer in terms of how they're really going to implement these programs and actually get money out the door and build projects when they need it. I loved that he brought up direct air capture, but I'd love to pick his brain a little bit about how we get environmentalists to stop suing about the pipelines we need if we want to do any robust CO2 management. We can't manage direct air capture if we have nowhere for the CO2 to go. Those are the kinds of things that I think I'd love to have a follow-up conversation about with him if there's an opportunity.

Brandon Hurlbut: Emily, you had a little Jedi battle there. How did that feel?

Emily Domenech: I mean, it felt pretty good since I know I'm right. I would love to have Ali Zaidi on so he can talk about how they refused to accept the Manchin bill and the FRA discussion, but perhaps maybe he and John haven't had a chance to chat about it.

Julia Pyper: Brandon, you've known John Podesta a long time. You talked about taking his courses in university, if I'm not mistaken, going back and teaching some of those classes.

Brandon Hurlbut: I was not a great student.

Julia Pyper: Fail upward (laughs). I'm just wondering, you've known him for a while, you've been on the inside of the IRA rollout. Actually, maybe let me frame this in a political lens. What are you thinking about as we head into the election? You've seen the work that John Podesta and his team have done. Heading into the election where we've talked about on the show, a lot of folks aren't sure what the future of the IRA and that legacy he talked about will look like. How are you thinking about it coming out of these conversations where we sit in the political cycle today?

Brandon Hurlbut: I'm so glad he's there. I mean, he's the legend. He's seen it all. And one of the things I really appreciate about John, you have a lot of different types of people that work in government. He is there to get things done, and he's willing to do what it takes to make those things happen. He's not a cautious person worried about the next thing. He's always got the country's best interest at heart, the president's agenda at heart, and so, there's a lot of important stuff that has to be done this year. Take away the election, there's still six months left in this term, and there's a lot of implementation that has to happen. And so, the fact that he's there still doing that gives me a lot of confidence. And now he's got this new role where he is talking to global leaders, and that's important, because everybody is looking at America saying, "What's going to happen?"

It's been very disorienting for other countries. Because we went from Obama, to Trump, to Biden, and for a while there Trump was leading in all the polls and people thought we're going to go back to Trump. So, I think the rest of the world is like, "Is America in or out on climate?" Trump's actively said at the convention, "Pull us out of Paris." So, having somebody like him that is a known figure, I think delivering this message to global leaders is really important. I'm glad that he brought that up, because it's probably an underappreciated part of what he's doing.

Julia Pyper: Yeah, he talked in his public comments this week in the run-up to the IRA anniversary about the 42 attempts of Republican House lawmakers have had in repealing some or all of the IRA, a stat he used. He also then pointed to the fact that there had been 18 or so Republican lawmakers calling for keeping elements of the Inflation Reduction Act intact because of the benefits going to their communities. Emily, what do you make of that sort of two sides of that coin and the sticking power today? I know we've asked you this before, but again, things change every day in the political world. What do you make of where we sit?

Emily Domenech: I think Brandon and I have talked about this before, but no one should assume that the IRA as a whole is safe in any election outcome. People need to engage and talk to their members and explain what the various benefits and downsides are of this law. That is why we go and talk to our members of Congress and that's how they can represent you better. My one note I will say on letter sent by House Republicans is that if you read it, they very notably did not say which provisions of the IRA they support, because that group of 18 cannot agree on which provisions they support. They all support different ones based on what their regional interests are. And I think that's one of the things that makes this challenging and why frankly, when we look at the outcomes in the House, if we have a Republican House, those margins will be small and we'll need to look at which are the things that have winning coalitions to stay in a tax reauthorization year.

I think, again, it's important to think about this in the context of the bigger tax picture. Even I think moderate Democrats have to make some choices when it comes down to, do we want to extend the small business tax cut or the R&D tax cut or the things that I think really help us with economic growth here in this country we got to pay for them somehow, and sometimes things get on the chopping block that way. So, looking at ways we can bring down the cost curve for some of this stuff, I think is going to be on the table, regardless of how the election plays out.

Julia Pyper: Engage. Engage. Yeah, and just for a little more color on that letter. It stated, "A full repeal of the IRA would create a worst-case scenario where we would have spent billions of taxpayer dollars and received next to nothing in return." And to that point, Podesta talked this week about the fact that more than 90% of IRA funding available this fiscal year at least has been awarded, and he's looking to get the rest of it distributed in the remaining months to come of the year. He said, "Treasury Department will complete its final guidance on the IRA's hydrogen tax credit in the near future here, as well as guidance for existing nuclear power plants by the end of the year." To your point, Brandon, more work to do. We're celebrating those two-year milestone for those of us celebrating, those of us who celebrate, but more work to come and certainly more, to Emily's point, if you like these policies, more defense to do of those policies and showing how they're working in the real world.

Let's move on to the other stories in today's episode. Get excited, Emily. We're starting with your favorite topic, permitting.

Emily Domenech: Whoop-whoop.

Julia Pyper: A couple weeks ago on July 22nd, the retiring Democrat-turned-independent Senator Joe Manchin and Republican John Barrasso announced their energy Permitting Reform Act of 2024. The bill aims to accelerate the permitting process for clean energy and fossil projects alike. The bill is generated by partisan support, and on July 31st it passed out of the Senate Energy and Natural Resources Committee on a vote of 15 to four. Manchin is the chair of that committee and Barrasso is the ranking Republican. Climate activists appear split over the bill however, given its support for fossil fuels, yet proponents argue that its benefits could outweigh the cons. During the bill's hearing Democratic Senator Martin Heinrich estimated that its oil and gas policies would generate less than 160 million tons of CO2, while clean energy projects stimulated by the bill would reduce emissions by two to three billion tons of CO2.

In a summary of the bill Heatmap News, Jael Holzman spoke to other experts who agreed with this estimate. The bill also negates President Biden's attempt to pause or halt approvals for new LNG export terminals. Additionally, it potentially removes the federal government from making decisions about drilling on private land. According to the same Heatmap report, that policy could stand in the way of dormant wells getting plugged and as a result emitting greenhouse gases. All right, lots to dig into here, including the feasibility of this bill going forward as we head into an election. What is your reaction to this bill?

Emily Domenech: I give Chairman Manchin and Ranking Member Barrasso a ton of credit for looking to cover as much as they could within the committee jurisdiction of the Energy and Natural Resources Committee in the Senate. They talked about developing energy on federal lands. They talked about LNG export permits. They included language on directing FERC on transmission. I think it's a really well-balanced approach. Where I think it falls short is largely due to committee jurisdiction in the Senate where you have limits on what you can do based on each committee's focus area. So, you have, we left some things on the cutting room floor like addressing NEPA, looking at the impact of some of the Clean Water Act regulations that make it hard to build transmission and pipelines. There's definitely some big items that are still out on the table that I think could make this a little bit challenging moving forward in terms of the politics of the bill. When you have some big stakeholders that are left waiting to see if their issue is going to make it to the table, they're not as inclined to lean in.

Another great example of this is, a lot of the money that is taking a long time to get out the door from things like the CHIPS Act and from the IRA, that money is tied up in that NEPA process that takes a really long time. They couldn't touch NEPA in this bill, because it's not in the jurisdiction of the committee. I think there's a lot more work to be done. This is a great start. It's great to see them working in a bipartisan way. It's great to see a bill moving through committee in the Senate, because as a good House gal who passed bills all the time, sometimes the Senate takes a little longer to get through their processes, so it's good to see them moving the ball forward. But I think really honestly, it will still be a pretty narrow pathway to success going into the poll. But I would give them more credit than it just being a messaging exercise. I think they really took a fulsome effort to really cover as much as they could in their jurisdiction.

Julia Pyper: Brandon, what's your review from the Democratic side, from the climate activists who may be opposed to this because of the fossil fuel measures, things like effectively undoing the Biden administration's ban on LNG exports. Is that going to be one of the things that kills this bill in the near term?

Brandon Hurlbut: Julia, I want to get to the answer to that question, but first I want to tee something up with Emily, because just to set the table on the political context, we are in a very different world than we were a month ago. A month ago we were looking at maybe a Republican sweep of all three chambers, and I think under that scenario Democrats would have felt more pressure to get something done now, because it might be the best that they can get, but things have changed. In the latest polling over the weekend Kamala Harris is up in battleground states. She's got a real path to victory. There's a chance they could win the House, and people have written off the Senate for the last two years, like, "The map is bad for Democrats. There's no way." But if you look at the polling in these Senate races, the Democrats are winning in Wisconsin, Michigan, Pennsylvania, Arizona. I mean, it's not totally out of the question that there could be a 50/50 Senate.

Emily Domenech: I think this was always going to be a really tight election. To your point about the House in particular being a coin flip, I think it has always been in that spot where it could go either way. And even if control flips, I expect it to be pretty narrow in the House, which really limits what you can do in terms of big sweeping legislative efforts. I've always felt like permitting was a lame duck to play. People are going to look at where the cards fall in the election and then make some decisions about what's possible going forward. For example, I think if the House flips to Dems than House Republicans may be more likely to be friendly towards the Manchin-Barrasso bill as like, "Maybe this is the best we can get." If it stays in Republican control, then I think you're going to see them play a little bit more hardball in the lame duck and say, "Hey, well we want to address NEPA, we want to address the Clean Water Act. We want to address some of these other things that are making it hard to build an America."

Brandon Hurlbut: Julia, to answer your question, I think many things can be true at once. Number one, is permitting broken and needs to be reformed? Yes. Does that need to happen to enable the true benefits of the Inflation Reduction Act? Absolutely. Given a somewhat level playing field, can clean energy outcompete fossil fuels?, absolutely. Should climate activists support progress and sometimes have to compromise when you don't get everything you want? Yes. But finally, we know that even though more clean energy projects would get built under this, more fossil fuel projects would be built as well, and we know where those will be built. It will be built in the communities that suffer first and worse from pollution. And so the climate activists do have, I understand where they're coming from on this. I still support the bill, but I understand that, and they are often the piece that gets traded in these negotiations, and that doesn't feel very fair.

Emily Domenech: I would push back on this a little bit, because most of the energy development that's going to come from this bill, because it's in the jurisdiction that it is, is going to come in western states on federal land. I think there is plenty of talk about communities benefiting or there are benefits across the board, depending on what type of project you're doing. If we're going to talk about costs and benefits, let's talk about the benefits to those communities too. Because those are jobs and those are frankly opportunity and you fund your schools and your roads and all of that stuff from royalties you get from energy production on federal lands. The same is true for renewable energy projects. If you're paying royalties on federal lands, you're funding into those processes, but it's part of why you see a lot of support for oil and gas development in the west, and it's because that's part of what their communities are built around. I think it's very fair to say we should have a cost and benefit discussion, and that's what a compromise bill is always going to look like, right?

Julia Pyper: Right, we'll leave it there on permitting for now, but you know it's going to be back.

Emily Domenech: Don't worry.

Julia Pyper: Don't worry. Do not fret. Let's move on to our final topic of this episode. On July 31st a group of bipartisan senators introduced the American Tax Dollars for American Solar Manufacturing Act. The bill has a pretty clear purpose, to prevent Chinese companies from accessing American taxpayer money, like funds from the IRA. I'm just curious about the politics of all this. I think as we're pushing more into making clean energy products and all kinds of products here in America, it creates some tensions around, what does Made an American mean? Does it have to be soup to nuts, all American companies, investors, et cetera? Are we going to leverage globalism to some extent and make a more dynamic market? I'm really curious to see how this is all going to shake out, and this bill gets to the heart of some of those tensions. I think. So Brandon, I'll go to you first. Can the energy transition afford to have a restrictive policy like this, or should we really be focusing on emissions reductions and less focused on which exact entities are driving that?

Brandon Hurlbut: It's a complicated question, Julia. Look, I support us building out our domestic solar manufacturing. I think it's really important to have that in this country. There are national security angles to this as well. It's such a vital part of our future, we don't want to be dependent on a hostile country for that. But it could raise the costs in the short term, because it does take, this is not like a light switch. You don't just turn on that supply chain. That will take a little bit of time, and we've seen that some of the costs are going up, and so that can be a barrier with these really tight margins to deployment. And so, we're running up against many things here, a 2030 inflection point on climate where we need to get as much clean energy deployed as possible in these next six years. We want to have this domestic manufacturing base and supply chain here. It's going to take a little bit of time to build that out. And those two things are at odds with each other. And so it's a complicated issue.

Julia Pyper: In a statement announcing the bill, one of its sponsors, Democratic Senator Sherrod Brown of Ohio said, "We cannot allow American tax dollars to go to Chinese companies that cheat and undermine American solar manufacturing." Emily, does that notion of cheating ring true to you, and where do you land on this issue?

Emily Domenech: Yeah, I don't know that I would say cheating is necessarily how I describe it, but this is a two-page bill, it's not that complicated. It says we shouldn't be subsidizing Chinese components and Chinese manufacturing. The goal of the 45X tax credit is to support American manufacturing, that's what it's for. This is part of why we've seen bipartisan support for proposals like this, and why I would say, regardless of what happens in November, I think we will continue to see some pretty aggressive anti-China both rhetoric and policy when it comes to looking particularly at the tax code, but also at our grant programs. We want to make sure that these programs are actually funding U.S. businesses and U.S. manufacturing, not Chinese manufacturing. And the problem is, we don't have really good policies to ensure that that's not happening. And I think that's part of why you're seeing bills like this come out Now.

Brandon Hurlbut: How many votes would that get in the House and Senate? I mean, do you think this would just pass with very clear majorities?

Emily Domenech: Yes, I think it would be an easy pass. You certainly would have some folks who would get lobbied by the, I would say probably the solar developers saying like, "Hey, it's bad for us if we have this stricter language." But I point back to the, if you had told me we were going to have a massive vote to force China to divest from TikTok three or four years ago, I wouldn't have thought that was possible. And it was a resounding and very bipartisan vote. We are hearing more and more and more from folks who are hearing from local communities with this anti-China sentiment, to the point where you're hearing folks say, "I don't want a Chinese company to come build a factory in my district."

I think it's only growing and it's something that the clean energy space is going to have to figure out a solution to, because I don't think people are going to support U.S. tax dollars subsidizing Chinese companies. I think when our defense posture towards China is frankly relatively adversarial, it's hard to see us getting to a place where we're excited for them to be controlling a huge part of our market.

Brandon Hurlbut: With my investor hat on, I would just say that I think that there is capital to build these manufacturing facilities for American companies, but those financiers really rely on the certainty of these policies. And so, we got to get Democrats and Republicans together to provide some confidence that no matter what happens with these elections, the U.S. is all in on these IRA policies and these tax credits. Because if there's any sense of like this could get pulled back, the financiers won't do those deals and those factories aren't going to happen, so this does sort of all hang together.

Emily Domenech: Yeah. I'd also add that if we want certainty in our policies, then it's better for them to be bipartisan rather than shoved through on a party line vote using reconciliation. So, the biggest challenge the IRA has is that not a single Republican voted for it, so that means not a single Republican is on record supporting it in its current form, and that makes it harder for us to say with a straight face that nothing's going to happen to the IRA in the future. I do think though, that most of the area where you'll see bipartisan changes to the IRA is in this foreign entity of concern space.

Brandon Hurlbut: I saw this statistic that blew my mind. I think in the month of June 50% of all cars sold in China were EVs, they are attacking this EV market. They're building cars that cost 10 to $15,000 that are selling like hotcakes. And the EV tax policies are the ones that the Republicans have been the loudest about opposing. And so, if we're going to compete with the Chinese and build these vehicles here, we need to maintain those incentives.

Emily Domenech: Well, I think maybe also we need to be thinking about what we're incentivizing. Are we incentivizing the last purchase in a supply chain that's controlled by China, where those parts and those cheap vehicles are being manufactured using coal with no environmental restrictions put on it and higher emissions than anything you'd see manufacturing here in the United States. Let's be honest about why they're cheaper. They're using slave labor and coal. Let's have a conversation about what happens when we offshore those emissions to China.

Julia Pyper: Last question for you, Brandon. Do you think that coupled with tariffs, a bill like this American Tax Dollars for American Solar Manufacturing Act, do you think that does enough to give the American solar manufacturers enough of a boost to catch up and do the deployment you talked about, have that certainty? As this bill is written today, does that give the market signal you think those manufacturers need?

Brandon Hurlbut: I think it gives a signal, but again, they'll want to know, is this durable? And it takes a little bit of time. We're not making parts of these supply chain here right now, and the Chinese do it really well. They've been doing it for a while, and they can do it very inexpensively. And so, to get that spun up here to do it at the cost that they can do it, even with the incentives, that's not an overnight thing.

Julia Pyper: And that's it for the show. Political Climate is a co-production of Latitude Media and Boundary Stone Partners. Max Savage Levinson is our producer, Sean Marquand is our technical director, and Roy Campanella mixed this episode, Stephen Lacey is our executive editor. You can get all of our show notes and transcripts at latitudemedia.com. And if you want us to talk about a specific topic, please email us at politicalclimatepodcast@gmail.com. Please also feel free to help spread the word about Political Climate on LinkedIn, X, and beyond. I'm Julia Pyper. We'll be back next week with our first dispatch from the DNC.

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