Since the Waxman-Markey bill, which aimed to establish a nationwide cap-and-trade emissions system, passed the House of Representatives in 2009 but died in the Senate, the prospect of legislation that would substantially reduce carbon dioxide emissions passing both chambers of Congress has been bleak. Now, this structural dilemma appears fundamentally unchanged in the post-2021 election landscape.

In response to urgent calls to address climate change, large electric utilities, multinational corporations, and state governments have pledged to achieve net-zero emissions over the coming decades. The significant increase in the cost competitiveness of renewable energy and battery storage has transformed the goal of building a 100% carbon-free grid from a distant dream into a topic of serious discussion among scientists and policymakers.

However, at the congressional level, the world after the 2021 elections faces many similar challenges to 2009. The main obstacle remains in the Senate. The Democrats' most optimistic expectation for this election is merely to win control of the Senate by a slim margin, which makes any comprehensive climate legislation highly susceptible to obstruction by the filibuster procedure.

Sasha Mackler, director of the Energy Program at the Bipartisan Policy Center, said: "Finding 60 votes in the Senate for an economy-wide policy, like Waxman-Markey, will be very difficult."

"Assuming we control the Senate, I think we will move quickly on a climate bill, and we will likely use the budget reconciliation process to ensure it passes."

— Sheldon Whitehouse, U.S. Senator from Rhode Island

Some climate policies can indeed be included in the budget reconciliation process, which is not subject to the filibuster, but that process only applies to provisions related to spending. Therefore, a core element of Joe Biden's climate agenda—a clean energy standard modeled on state renewable portfolio standards (RPS)—would likely be excluded from reconciliation. State-level RPS policies have been widely regarded as successful examples of promoting renewable energy adoption.

Other energy proposals have a degree of bipartisan support and could theoretically pass regardless of the composition of the next Congress. However, for climate action advocates, these policies, at least on their own, fall far short of mandatory emission reduction standards.

Gregory Wetstone, president and CEO of the American Council on Renewable Energy, said: "We will prioritize advancing a clean energy standard. It is the path to ensuring progress toward a clean energy future."

An example of legislation with bipartisan support is the Clean Energy Jobs and Innovation Act, which directs funding to a variety of emerging energy technologies and passed the House in September. The American Energy Innovation Act, introduced by Senator Lisa Murkowski, a Republican from Alaska and chair of the Senate Energy and Natural Resources Committee, along with the committee's ranking member, Senator Joe Manchin, a Democrat from West Virginia, is similar to but distinct from the House version. It has come close to passing the Senate but still lacks key votes.

Wetstone has previously stated that energy legislation limited solely to funding research and development would be a "critical shortfall," because the practical deployment of research results could take years to materialize.

However, given the bipartisan consensus on existing bills, innovation spending may be politically easier to advance in an environment where a clean energy standard is stalled. The House and Senate innovation bills have demonstrated bipartisan support, and the compromise elements they contain—such as funding for carbon capture and sequestration demonstration projects and next-generation nuclear reactors—hint at what a future compromise energy bill might include.

Another policy path that could more directly drive emission reductions is the budget reconciliation process. Under this process, Senate Democrats could include relevant policies in a broader tax and spending bill with only a simple majority vote.

Senator Sheldon Whitehouse, a Democrat from Rhode Island, said during an October 21 discussion with Senator Murkowski hosted by Stanford University's Center for Environmental and Energy Policy Analysis: "Assuming we control the Senate, I think we will move quickly on a climate bill, and we will likely use the budget reconciliation process to ensure it passes." When asked how the nature of the budget reconciliation process would limit the bill's content, Whitehouse said, "At a minimum, carbon pricing would be a clear, budget-related item."

Several bills in Congress have more explicitly priced carbon emissions, such as the Market Choice Act, introduced in 2019 by bipartisan lawmakers, which aims to replace the federal gasoline tax with a carbon emissions tax.

"A significant number of Republicans are evolving on the climate issue."

— Sasha Mackler, Director of the Energy Program at the Bipartisan Policy Center

Another piece of legislation that could gain new momentum under a Biden administration is the Clean Energy for America Act, introduced by Senator Ron Wyden, a Democrat from Oregon. Co-sponsored by Whitehouse, the bill proposes replacing tax credits for specific clean energy sources like solar and wind with a technology-neutral tax credit—applicable to energy sources that are 35% cleaner than average, with the credit increasing as they approach 100% carbon dioxide-free.

Grant Carlisle, senior advisor to the Natural Resources Defense Council's (NRDC) Climate and Clean Energy Program, said: "A technology-neutral approach like Wyden's bill could be included in a tax reform bill." He believes the bill could pass after Biden takes office and before the midterm elections.

However, if Trump wins a second term, the downstream electoral effects would likely keep the Senate under Republican control. Wyden has said he favors extending tax credits for electric vehicles, solar, wind, and energy-efficient buildings, and expanding existing credits to fuel cell vehicles and energy storage, but these are highly unlikely to pass in a Republican-majority Senate.

An evolution in attitudes?

Given the Republican Party's recent performance—including nominating a presidential candidate who once called climate change a "hoax"—there is skepticism about the realism of a significant number of Republicans supporting any climate legislation.

Mackler believes: "A significant number of Republicans are evolving on the climate issue." He observes that carbon neutrality commitments made by the private sector have changed the conversation, making the right wing more comfortable discussing climate issues. "The signals coming from congressional Republicans are different now. Eighteen to 24 months ago, it was difficult to have conversations with Republican offices; that is no longer the case."

However, the evolution in Republican attitudes toward climate does not necessarily translate into support for the Democratic agenda and its mandatory emission reduction targets. Rich Powell, executive director of ClearPath, a conservative nonprofit, points out that Republicans have more concern and willingness on climate policy than often portrayed. ClearPath advocates for reducing carbon dioxide emissions through policies that support the development of clean energy technologies such as nuclear, storage, geothermal, and carbon capture. But the organization believes that economy-wide mandatory penalties on energy sources that emit carbon dioxide go too far. Powell says ClearPath focuses on "making clean energy cheaper, not making traditional energy more expensive," and has consistently supported innovation bills in Congress.

This does not mean no Republicans are willing to support some form of clean energy standard. Earlier this year, Republican Representative David McKinley of West Virginia and Democratic Representative Kurt Schrader of Oregon outlined draft legislation they positioned as a bipartisan alternative to the Green New Deal. Their approach is called "innovation first, regulation later," because it pairs emission reduction standards with a mechanism that takes effect about a decade later, preceded by billions of dollars in investment in technologies such as carbon capture, advanced nuclear, and renewables with energy storage.

The McKinley-Schrader proposal aims to reduce carbon dioxide emissions by 80% by 2050 while suspending all greenhouse gas regulations on fossil fuel power plants. In their place would be a clean energy credit trading system allowing utilities that exceed emission limits to purchase offset credits.

The McKinley-Schrader proposal shows that at least some House Republicans—even those from the fossil fuel stronghold of West Virginia—can support legislation mandating significant carbon dioxide emission reductions at a future date. However, the Senate may be another matter. Beyond persuading enough Republican senators to support a clean energy standard to overcome a filibuster, Kenny Stein, director of policy and federal affairs at the American Energy Alliance, predicts that Democratic Senators Kyrsten Sinema of Arizona and Manchin might decide not to support "comprehensive legislation" on emissions. The American Energy Alliance is an advocacy group that opposes carbon regulation, opposes government financial support for renewable energy, and supports President Trump's re-election.

Stein said: "There will be good opportunities on a bill that 'spends all the money on research.' There are plenty of Republicans in the House and Senate who would vote for that. But it won't be a clean energy standard or tax credits."

Compromise legislation

A compromise energy spending bill might resemble the innovation legislation proposed in Congress, but with additional provisions to compensate for the failure to pass comprehensive climate legislation.

A report released in August by the Atlantic Council's Global Energy Center envisioned what a bipartisan energy infrastructure bill might look like. Authors David Goldwyn and Andrea Clabough wrote: "Such a package could include significant enhancements to tax incentives for renewable and zero-emission energy producers, possibly even offering direct payment options, as well as much-needed infrastructure upgrades, such as broadband internet access (to facilitate grid digitalization) and high-voltage direct current transmission lines to enable nationwide access to regionally produced zero-emission electricity."

Clabough said in an interview: "There are areas of cooperation, but we think they are fairly limited." She noted that transmission infrastructure could be a particularly productive bipartisan issue because large construction projects like new transmission lines create jobs, making them a potential part of an economic stimulus package.

"We need a 21st-century grid, and we think this has the potential for bipartisan support."

— Gregory Wetstone, President and CEO of the American Council on Renewable Energy

Investment in more transmission lines is a top priority for many renewable energy advocates, because the lack of transmission lines connecting regions rich in wind and solar resources to population centers is hindering the larger-scale expansion of renewables. These transmission lines would boost economic development in several red states, thereby increasing the likelihood of bipartisan support.

Wetstone said: "We need a 21st-century grid, and we think this has the potential for bipartisan support. There is growing awareness that we are still using a 1950s grid, and other countries are surpassing us."

Best and worst-case scenarios

In the Stanford panel discussion with Murkowski, Whitehouse also said that an innovation bill could pass with bipartisan support, but he emphasized that the priority for congressional Democrats should be passing emission reduction legislation, even if it means forgoing Republican support. Whitehouse said: "This is an urgent enough problem that we must move forward—if we can't find Republican help—using every tool at our disposal. We shied away from this during the Obama administration, and I don't think we can afford to do that again."

However, Murkowski responded that major climate policy passed without at least some cooperation from the minority party would not be lasting policy. She said: "What you will get is policy made for this administration, and in every subsequent administration, Republicans will do everything they can to undermine it. This will replay what happened with the Affordable Care Act."

Whitehouse agreed that "if we can do this in a bipartisan way, we would be better off. That is the best-case scenario." But he added, "The worst-case scenario is that we do nothing. So if we have to accept a partisan approach, I guess that is what we will have to accept."