White House climate adviser Gina McCarthy said Thursday that the Biden administration is not ready to “close” the door on a carbon tax as part of its $2 trillion green infrastructure spending proposal. But McCarthy emphasized that President Joe Biden prefers a different approach as one of his main mechanisms to eliminate carbon emissions from electricity.
Biden’s plan calls on Congress to pass a clean electricity standard, which would require power companies to purchase an increasing amount of clean electricity until they reach 100% by 2035.
“I am certainly not going to close that,” McCarthy told reporters about a carbon tax. “But [Biden’s] choice was to look at a clean electricity standard in concert with the investments we identified. To him, that gets to the kind of reductions we promised in the campaign.”
CARBON TAXES ARE OUT, AND CLEAN ELECTRICITY STANDARDS ARE IN
Democrats have coalesced around a clean electricity standard and moved away from a carbon tax, which has long been the favored climate policy of economists and some businesses because it would force companies to pay for their emissions without outlawing it. The American Petroleum Institute, the largest U.S. oil lobby, recently endorsed carbon pricing, but that has not slowed momentum for a clean electricity standard.
McCarthy and her deputy, Ali Zaidi, were scheduled to meet Thursday with the utility trade group Edison Electric Institute to sell the industry on supporting a clean electricity standard mandating 100% clean power by 2035.
EEI President Tom Kuhn has warned about the potential for reliability problems and rate increases for customers if utilities were forced to meet that 2035 timeline without progress on building transmission lines and deploying nascent low-carbon technologies, such as smaller advanced nuclear reactors and carbon removal.
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Many utilities, though, support the concept of a federal clean electricity standard as a way to harmonize various state policies and could look to push for a later timeline for 100% clean electricity.
McCarthy said the utility industry sees a standard as a “flexible” tool and noted Biden supports a policy that would count nuclear power and fossil fuel plants equipped with carbon capture technology as being clean, along with wind, solar, and hydropower.
