The CLEAN Future Act of 2021: An In-Depth Look

Brownstein Hyatt Farber Schreck

On March 2, 2021, the House Energy and Commerce Committee introduced H.R.1512 (117), the “Climate Leadership and Environmental Action for our Nation’s Future Act” or the “CLEAN Future Act.” The committee first unveiled the bill as a discussion draft in January 2020. After over a year of hearings and stakeholder feedback, the legislation now boasts several new provisions and modifications. Brownstein has compiled an in-depth section-by-section summary of the bill, attached above.

The CLEAN Future Act has far-reaching implications for many sectors of the economy. The bill sets a national climate target of net-zero greenhouse-gas (GHG) emissions by 2050. The bill includes a mix of incentives for renewable energy and provisions increasing regulation of non-renewable energy and other emitting industries. It aims to achieve GHG and other emissions reductions through provisions impacting the power sector, the building sector, the automotive sector, ports, manufacturing, oil and gas extraction, waste-management and recycling.

Public companies are also impacted. The legislation proposes mandatory climate risk disclosures at the Securities and Exchange Commission (SEC), similar to those proposed in the Climate Risk Disclosure Act of 2019 (H.R.3623 (116) and S.2075 (116)) introduced by Sen. Elizabeth Warren (D-MA) and Rep. Sean Casten (D-IL). Environmental justice provisions are also a key component of the legislation. The bill includes funding for infrastructure projects for environmental justice communities including brownfields and Superfund funding, drinking water, and per- and polyfluoroalkyl substances (PFAS) grants. Lastly, the legislation includes a labor component intended to transition U.S. workers to a clean energy economy and away from traditional fossil fuel jobs.

The CLEAN Future Act faces a new political makeup in Congress after the 2020 election compared to when the draft legislation was first released. The White House and the Congress are now under Democratic control, but with slim margins of power. The 50-50 party split in the Senate necessitated the passage of COVID-19 relief through a process called reconciliation to avoid the need for a bipartisan vote. Once the $1.9 trillion COVID-19 relief reconciliation measure is completed, Democrats have stated they will turn to a large stimulus reconciliation measure with a focus on climate and infrastructure.

However, the reconciliation process will limit what can be included in the next big legislative package. Provisions of a reconciliation bill must adhere to strict revenue-related rules and many substantive provisions may be knocked out by the Senate parliamentarian—as we saw with proposals to raise the minimum wage in the COVID-19 reconciliation measure. Many CLEAN Future Act proposals like a federal clean electricity standard would likely meet the same fate. However, many other provisions of the legislation could easily be inserted into a large infrastructure package similar to H.R. 2 (116), the Moving Forward Act, which passed the House but stalled in the Senate last Congress.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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