How Inflation Upended Biden’s Climate Agenda

WASHINGTON — President Biden bowed to political realty on Friday, conceding that he had been unable to persuade a holdout coal-state Democrat — and any Republicans in the Senate — to back what had been his greatest hope to confront the climate crisis.

Calling an end to what had been more than a year of fruitless negotiations on legislation to spend hundreds of billions of dollars to clean up the nation’s electricity and transportation sectors, Mr. Biden released a statement Friday afternoon saying he was instead prepared to “take strong executive action to meet this moment.”

Even for a president who has prided himself on compromise and the art of the possible, it was a marked retreat — one driven, in large part, by the economic and political challenges of rampant inflation.

Mr. Biden’s statement also called on Democratic senators to quickly approve a slimmed version of a bill that had once been Mr. Biden’s grand agenda to remake the federal role in the economy, which will now be narrowed to only include expanded health-insurance subsidies through the Affordable Care Act and efforts to reduce the cost of prescription drugs. The move effectively dooms his legislative efforts on climate — and his accompanying plans to raise taxes on businesses and high-earning individuals — unless Democrats hold the House and Senate in November.

In a sign of the degree to which price spikes across the economy have upended Mr. Biden’s agenda over the last year, the announcement came from Saudi Arabia, where Mr. Biden flew on Friday with plans to press the region’s oil giants to pump even more crude onto global markets.

At the end of a news conference after a day of meetings in Jeddah, Mr. Biden vowed that “I am not going away” on the climate fight. “I will use every power that I have as president to continue to fulfill my pledge toward dealing with global warming,” he said.

Mr. Biden came to office promising to wean the United States from fossil fuels like oil and coal in order to reduce the greenhouse gas emissions that are on pace to trigger catastrophic global warming.

He surrounded himself with experienced and aggressive advisers on international and domestic climate politics, setting ambitious goals to speed an energy transition that would touch every corner of the American economy. He cast himself as a master negotiator who had spent nearly four decades in the Senate and could build coalitions on big legislation.

One 24-hour span at the end of this week showed how thoroughly Mr. Biden has been frustrated in that effort.

His climate goals have stalled amid Democratic infighting and shifting economic priorities driven by fast-rising inflation, including the gasoline price spike triggered by Russia’s war in Ukraine.

The Biden Administration’s Environmental Agenda

President Biden is pushing stronger regulations, but faces a narrow path to achieving his goals in the fight against global warming.

After more than a year of tortured negotiations, Democratic Senator Joe Manchin III of West Virginia gave party leaders yet another reason he could not support $300 billion in tax incentives for clean energy like solar and wind power. He said Thursday he wanted to wait for more encouraging data on inflation, even though administration officials said the clean energy provisions would be part of a broader bill designed to reduce health and electricity costs, cut the deficit and strengthen the economy.

Mr. Manchin had been negotiating with Senator Chuck Schumer of New York, the majority leader, on a scaled-back version of the climate initiatives Mr. Biden had unsuccessfully tried to sell to Mr. Manchin last fall. In a taste of the on-again, off-again nature of the talks, on Friday, Mr. Manchin told the West Virginia radio host Hoppy Kercheval that he was still engaged in those negotiations and dangled the idea that he might support energy legislation in September, but not earlier.

But Mr. Manchin also said he was wary of raising taxes on businesses and high-earning individuals in order to offset the energy and climate credits, at a time when inflation is rising at its fastest pace in 40 years. He said he had told Mr. Schumer he wanted to wait for the next set of economic indicators in August before proceeding.

“Inflation is absolutely killing many, many people,” Mr. Manchin said on the radio program. “They can’t buy gasoline, they have a hard time buying groceries, everything they buy and consume for their daily lives is a hardship to them. And can’t we wait to make sure that we do nothing to add to that?”

Mr. Biden’s statement effectively ruled out waiting any longer on Mr. Manchin,

who had objected to portions of the climate plan for more than a year, well before the war in Ukraine and before inflation took root.

Mr. Manchin’s vote was key in large part because not a single Republican is willing to vote for the Democrats’ climate legislation. While several Republicans have in recent years abandoned outright climate denial, none said they would vote for clean energy tax credits if they were in a stand-alone bill, a New York Times survey earlier this year found.

The news came at a particularly awkward time for Mr. Biden. The president was flying on Friday from Israel to Saudi Arabia, carrying hopes that the Saudis and their oil-rich neighbors will ramp up production and help to drive down the gasoline prices that have helped to hobble Mr. Biden’s approval ratings this year.

Leaders of some of the country’s biggest environmental organizations held a teleconference Friday afternoon with two of Mr. Biden’s top aides, Steve Ricchetti and Bruce Reed as well as Ali Zaidi, the White House deputy climate adviser.

“We were very clear in our meeting at the White House that this was a moment that demands presidential leadership. President Biden has said the climate crisis is code red and he’s right,” said Fred Krupp, president of the Environmental Defense Fund, an environmental group, who co-chaired the discussion.

“The people that elected Biden need to see much more action,” said Ramón Cruz, president of the Sierra Club.

The death of the legislation is just the latest, but arguably worst, blow to Mr. Biden’s climate agenda, as his tools to tackle global warming have been stripped away, one by one.

“There has been a party leadership-wide failure to address this,” said Varshini Prakash, executive director of the Sunrise Movement, an environmental group that represents many young climate activists.

“I want to make sure Biden and his administration hear this loud and clear,” Ms. Prakash said. “They have to create a response across all agencies of the government at every level over the course of the two and a half years that they remain in office to do everything in their power to address the climate crisis, or risk being a huge failure and disappointment to the American people and young people in particular.”

Christy Goldfuss, the senior vice president for energy and environment policy at the Center for American Progress, a liberal think tank, said she believed it was time for an “honest conversation” about how much more difficult it will be now to meet Mr. Biden’s climate goals without congressional action.

Economists generally agree there are two basic ways to reduce emissions and curb global temperature rise. One is to drive down the cost of low-carbon energy sources, like wind, solar or nuclear power, while improving energy efficiency. The other is making fossil fuels more expensive to use, either by putting a price on carbon emissions or raising the price of the fuels.

Mr. Biden appears to have lost his best chance to further promote clean energy. He could pursue executive actions to regulate emissions in some sectors of the economy, though his options have been narrowed on that front by a recent Supreme Court ruling that restricted the authority of the Environmental Protection Agency to limit emissions from power plants, the nation’s second-largest source of planet-warming pollution.

Legal experts say that decision will likely set a precedent that could also constrain the federal government’s ability to more strictly regulate other sources of heat-trapping emissions, including cars and trucks.

At the White House, Mr. Biden’s climate team is now assembling a suite of smaller and less muscular tools to fight global warming, which experts say could still take slices out of the nation’s carbon footprint — although not by enough to meet the targets Mr. Biden has pledged to the rest of the world. He has promised the United States would cut its greenhouse gas emissions by about half by the end of this decade.

In the coming months, the E.P.A. still plans to issue tougher regulations to control methane, a potent greenhouse gas that leaks from oil and gas wells, along with a more modest rule to cut emissions from utilities.

And while many economists have long pushed for governments to tax fossil fuels to reduce emissions, Mr. Biden and his advisers have said repeatedly that they want to reduce, not raise, gasoline prices. The president is mindful of gasoline’s impact on household budgets and the political toll that high gas prices have exacted on his presidency.

Mr. Biden acknowledged the contradictions of that position last fall, when gasoline prices were rising but were still $1.50 a gallon cheaper on average in the United States than they are today.

“On the surface,” he told reporters at a news conference following a Group of 20 summit meeting in Rome, “it seems like an irony, but the truth of the matter is — you’ve all known, everyone knows — that the idea we’re going to be able to move to renewable energy overnight and not have — from this moment on, not use oil or not use gas or not use hydrogen is just not rational.”

When gasoline rises above $3.35 a gallon, he added, “it has profound impact on working-class families just to get back and forth to work.”

The collapse of climate legislation comes as Mr. Biden’s top environmental advisers are said to be headed for the exits. Mr. Biden had assembled what many called a dream team of experts including Gina McCarthy, who had served as the head of the Environmental Protection Agency under President Barack Obama, to lead a White House office of climate policy.

Ms. McCarthy has indicated she intends to step down from her position this year, but had hoped to do so on a high note after the passage of climate legislation, aides have said.

Mr. Biden’s top international envoy, John Kerry, who served as secretary of state in the Obama administration, is expected to leave after the next round of United Nations climate negotiations, which will be in November in Egypt.

With little to show from the United States, however, Mr. Kerry will struggle to push other countries to cut their climate pollution, experts said. Doing so is critical to keeping the planet stable at about 1.5 degrees Celsius of warming compared to preindustrial levels. That is the threshold beyond which the likelihood of catastrophic droughts, floods, fires and heat waves increases significantly. The Earth has already warmed by an average of about 1.1 degrees Celsius, or about 2 degrees Fahrenheit.

As the world’s biggest emitter of greenhouse gases historically, the United States occupies a singular role in the fight to mitigate global warming. President Donald J. Trump abdicated that role, but when Mr. Biden was elected he declared that America was “back” and would lead nations in tamping down the pollution that is dangerously heating the planet.

Now, the United States “will find it very hard to lead the world if we can’t even take the first steps here at home,” said Nat Keohane, the president of the Center for Climate and Energy Solutions, an environmental group. “The honeymoon is over.”

Emily Cochrane contributed reporting.