Outlook on US Midterms & State Climate Action

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Historically, voters have tended to blame the party in power for problems taking place in the country. As a result of this recurring trend, the President’s party has often lost ground in midterm elections, particularly in the President’s first term. For instance, this happened in 1994, when the Republican party secured unified control of Congress for the first time since 1952 in the middle of President Bill Clinton’s first term. Again, in 2010, Republicans won the House of Representatives two years into Barack Obama’s first term; and in 2018, Democrats deprived Republicans of unified control of the federal government by winning control of the House. Now, many observers expect history will repeat itself in the upcoming midterm elections in November 2022, with potentially major consequences both for Democrats in Congress and the President’s climate agenda. This analysis discusses why Democrats are expected to lose and what the prospect of Democratic losses might mean for climate policy in 2022 and beyond.

Outlook for Midterm Elections

Current public opinion polls suggest Democratic losses in Congress are more likely than not this November, when all members of the House of Representatives and one-third of Senators will be up for re-election. After beginning his term with strong poll numbers, President Biden has seen his popularity drop considerably since late summer when the delta variant of COVID-19 reached the United States, and it has remained low ever since. Since the end of August, more Americans have had an unfavorable impression of the President than have had a favorable impression. The picture is similar for Democrats in Congress. Early in President Biden’s term, Democrats had a four-point edge over Republicans in polls that asked voters which party they would support in an election, but since mid-November, voters have been split nearly evenly between the two parties, with Republicans having a slight edge. However, the picture for Democrats is turning out to be less dire than some feared. It was widely expected that Republicans would take advantage of the ongoing redistricting process to re-draw the boundaries of congressional districts to give themselves a sizable edge in the House. At present, however, it looks likely that the new maps will be less biased in favor of Republicans than the previous ones; in fact, they may even end up biased very slightly in favor of Democrats. In part, this is because legislatures in states controlled by Democrats have been equally aggressive about manipulating political maps in their favor.  In addition, Texas Republicans have prioritized protecting incumbents over maximizing the number of Republican-held seats, and in Ohio, a proposed map that would have heavily favored Republicans has been rejected by the courts.

Several factors have likely contributed to Democrats’ and the President’s sinking poll numbers, including high gasoline prices, frustration with pandemic-related restrictions, ongoing supply chain issues that have led to product shortages for consumers, and unexpectedly high inflation.  Each of these factors could improve or worsen between now and November. Gasoline prices, for example, could fall as oil supply returns to pre-pandemic levels, and pandemic-era restrictions and supply chain issues could become a distant memory as the latest surge subsides and a combination of widely available testing and vaccines enable a path to move beyond the pandemic. Inflation could ease as the Federal Reserve raises interest rates and the economy recovers, perhaps with further help from Congress. Finally, Democrats still have time to enact a significant portion of the President’s agenda through reconciliation. If Democrats can pass significant legislation, voters might reward them at the polls. Thus, it’s far too soon to predict that Democrats will suffer an historic drubbing in the mid-term elections. Nevertheless, if history is a guide, Democrats would be lucky to retain control in Congress.

Implications for Climate Policy

Most observers believe that the risk of Democratic losses in the midterm election will not deter the Biden administration from doing all it can to promote climate action in Congress and through executive action (see the next section on executive authority). Far harder to predict is how the prospect of Democratic losses in November will influence members of Congress’ thinking about the Build Back Better Act, which, if enacted, would amount to the most significant piece of climate legislation ever passed in the United States. At present, the climate aspects of the bill seem like they could become law. In part, this is because conservative Democratic Senator Joe Manchin (West Virginia), whose support is needed to pass the bill, recently expressed approval for the climate provisions in the bill. Other Democratic legislators are adamant about passing the climate elements of the bill because it could well be the last chance Congress has for some time to pass substantive climate legislation and because they believe it would show voters that they can follow through on the promises they and President Biden made on the campaign trail in 2020. At the same time, however, some question whether Senator Manchin is negotiating in good faith. In the past months, he has reversed commitments and positions he has taken without warning and could do so in the future on the climate provisions at any time. We believe that if Senator Manchin wanted some version of Build Back Better to pass the Senate it would have done so since he has been the main obstacle. The longer negotiations drag on, the more likely it is that Senator Manchin is merely trying to delay the moment when President Biden realizes that Senator Manchin will not support the President on this bill under virtually any terms. Also, as the midterm elections get closer, some members of Congress from regions with roughly equal numbers of conservatives and liberals may become more anxious about the prospect of supporting an expensive and expansive piece of legislation, especially if it contains potentially controversial new social programs. Because the Democrats have such slim majorities in Congress, even a small number of defections inspired by this line of thought could spell disaster for the Build Back Better Act.

The prospect of Democratic losses in the November election probably makes it less likely that Congress will advance climate policy through alternative bipartisan legislation if Build Back Better fails to pass through the Senate. Sensing that Democrats are vulnerable in the upcoming election, Republicans in Congress will likely be reluctant to cooperate with them to pass any major legislation, since doing so would bolster President Biden’s credentials as a unifier and give Democrats another victory to tout on the campaign trail. Nevertheless, some initiatives may yet garner enough support to pass. Given that environmental conservation measures have often passed through Congress when almost nothing else could, perhaps the most likely candidate bill would be the Recovering America’s Wildlife Act, which would provide states funds to proactively protect wildlife species that are at risk of being placed on the endangered species list.  Currently, the bill has 140 co-sponsors in the House and 32 in the Senate, in each case from both parties. Should that bill pass, we would expect to see more habitat restoration and conservation efforts that could marginally increase land-based carbon sinks in the United States.

Should Democrats lose unified control of Congress in the midterm election, there is little prospect that major climate legislation will pass before 2025. However, there will still be opportunities to make incremental progress. Probably the best such opportunity will be the farm bill, which is up for re-authorization in 2023. There is significant mitigation potential in the agriculture industry, and provided the motivation is there, the farm bill is among the best vehicles to implement related initiatives. There may also be opportunities to advance climate action through changes in the tax code to promote bipartisan clean energy innovation solutions (such as carbon capture and storage as well as direct air capture), though this too remains hard to predict at this time.

Changes at the State and City Levels

In recent years, particularly during the Trump administration, climate action at the state level rose significantly. If Republicans do win back a chamber of Congress it will be on willing States to close the gap created from the absence of national leadership to reduce emissions. Several policies like  clean energy standards, increasing the presence of zero-emissions vehicles, programs for resilience and adaptation, and regional coalitions are becoming more popular in both red and blue states. Recent developments show that these trends will continue, but the outlook is mixed as some states may also roll back initiatives. This section looks at the importance of climate news from Nebraska, New York, and Virginia.

Nebraska

Nebraska Public Power District, a public utility controlled by Republicans, committed to becoming carbon neutral by 2050. This commitment is non-binding, and the state’s legislators do not yet have a plan to reach net zero emissions by mid-century. Nevertheless, the announcement from the board of directors of Nebraska Public Power District, made in December, is significant for several reasons. For one, Nebraska is a very conservative state and reliably votes Republican in both local and national elections. The fact that a utility in a deep red state is moving forward with clean electricity is a reflection of how this trend will likely continue throughout most of the country –and would speed up even more with the passage of Build Back Better. Second, since the utility is publicly owned, voters have a say in the direction of the utility, making it more likely than not that it will move forward in this direction. Third, the changes at the utility, which follows similar commitments from others in the state such as Omaha Public Power District and Lincoln Electric System, mean that the shift to renewables will be state-wide. While climate activists see the changes in Nebraska as steps in the right direction, they do note that the state’s timeline is less ambitious than other states that are aiming to eliminate emissions in the electricity sector in the 2030s. Also, the state’s main power source is coal, accounting for more than slightly half of its electricity generation, meaning that the transition will be slow and coal will likely remain part of the energy mix for the next several decades. Wind, however, is growing at a rapid rate: nearly a quarter of its electricity now comes from wind, up from about 1 percent in 2010.

New York

New York City has now banned the combustion of fossil fuels in new buildings. Former Mayor Bill de Blasio, whose term ended on the first day of 2022, signed the legislation in late December, announcing how it would lead to significant changes in how the city heats and cools its buildings. Crucially, the law bans gas hook-ups and intends to accelerate building electrification. Other cities, such as Berkeley, California, Seattle, and Denver, have also taken steps to either limit or eliminate the use of gas in new buildings. New York City’s timeline is for the ban to start in 2024 for buildings that are less than seven stories and 2027 for larger buildings. The Rocky Mountain Institute says that the new initiative would save more than 2 million tons of emissions by 2040 and also reduce costs for ratepayers. As more cities are likely to follow the lead of New York and the others that have implemented new prohibitions, the natural gas industry is expected to continue to fight these bans. The gas industry has successfully lobbied lawmakers in certain cities from implementing such initiatives. There have been preemption measures put in place in a number of states to undermine local changes that seek to increase electrification in buildings. The two main utilities in New York, Consolidated Edison and National Grid, had different reactions to the new law. National Grid argued that it would reduce options for decarbonization in buildings and would increase energy costs, while ConEd said it was a “necessary step.” Both are looking into using hydrogen to replace natural gas and transport it through existing pipelines.

Virginia

Virginia, after seeing major climate achievements in recent years, is now likely to experience rollbacks with Republican Governor Glenn Youngkin taking office in January. Governor Youngkin has already said that he would pull Virginia out of the Regional Greenhouse Gas Initiative (RGGI), a program the reduces electricity emissions through “cap-and-invest.” The RGGI has 11 members, and Virginia, which joined in 2020 under Democratic Governor Ralph Northam, is currently the only Southern member. Governor Youngkin, soon after winning the election in November, said that he would take Virginia out of the program in an effort to save residents money on their electricity bills. His office said that being in the RGGI program adds slightly less than $5 to consumers’ monthly bills. “RGGI describes itself as a regional market for carbon. It is really a carbon tax that is fully passed on to ratepayers,” he said. “It’s a bad deal for Virginians. It’s a bad deal for Virginia businesses.” Governor Youngkin will use executive action to exit the RGGI, but Democrats have questioned whether he can legally do this, setting up a clash between both sides once his term begins. Governor Youngkin also named former President Trump’s EPA director Andrew Wheeler as his Secretary of Natural Resources, and even though his appointment has been rejected by the Democratic Senate, his nomination another sign that Governor Youngkin plans to implement policies that promote fossil fuels. Democrats have pointed out that the benefits of the RGGI outweigh the costs of being in the program, and noted that the state raised more than $200 million in 2020 from selling carbon credits. Even though Governor Youngkin will attempt to take the state out of the RGGI, he cannot repeal Virginia’s renewable portfolio standard without support from the state legislature. Democrats still control the state Senate.