Energy & Environment — House GOP announces anti-ESG working group

The House’s Republican majority is launching a working group to push back on environmental, social and governance investing. Meanwhile, the Treasury Department expands which electric vehicles can claim a tax credit, and the Interior Department announces millions toward tribal water settlement. 

This is Energy & Environment, your source for the latest news focused on energy, the environment and beyond. For The Hill, we’re Rachel Frazin and Zack Budryk.

Republicans join to fight ‘threat’ of ESG investing 

House Republicans are creating a new working group to further their pushback against environmental, social and governance (ESG) investing.  

A press release from the House Financial Services Committee announcing the group said it will be aimed at combating what they described as a “threat to our capital markets.” 

What’s the plan? The group will be led by Rep. Bill Huizenga (R-Mich.). 

It will seek to “develop a comprehensive approach” to the ESG issue and “hold Biden’s rogue regulators accountable,” Financial Services Committee Chairman Patrick McHenry (R-N.C.) said in the release. 

The press release did not specify how it would do so, and a spokesperson did not immediately respond to questions from The Hill. 

Where did this start? ESG investing is a broad term for attempts to invest ethically and can include actions by the government, investment firms and banks or individuals.  

• Huizenga, in the press release, specifically called out a proposal from the Securities and Exchange Commission that would require companies to disclose their contributions to climate change. 
  
• Both this proposed rule and ESG in general have gotten pushback from Republicans, who have raised concerns about its impacts on the fossil fuel industry, as burning fossil fuels is the main driver of climate change. Republicans have also raised concerns that ESG could push money managers toward choosing social issues over profits for their clients.  

Proponents of ESG argue that it is possible to do good for the planet and well financially at the same time. A 2021 meta-analysis from New York University found ESG to be generally associated with better financial performance for stock holders. 

Read more about the group here. 

Treasury expands eligibility for EV tax credit  

The Biden administration will expand eligibility for an Inflation Reduction Act-enabled tax cut for electric vehicles, the Treasury Department announced Friday. 

• The department has updated the classification standards used to determine eligibility, expanding the definition of an SUV. The $7,500 tax credit applies to SUVs costing up to $80,000, but there is no such benefit for passenger cars more expensive than $55,000. The update, retroactive to Jan. 1, will use the standard set by the Environmental Protection Agency’s (EPA) fuel economy standards. 
  
• “To make it easier for consumers to know which vehicles qualify under the applicable MSRP cap, Treasury is updating the vehicle classification standard to use the consumer-facing EPA Fuel Economy Labeling standard, rather than the EPA CAFE [Corporate Average Fuel Economy] standard,” the department said in a statement Friday. “This change will allow crossover vehicles that share similar features to be treated consistently.” 

So what’s changing? Under the expanded eligibility, Tesla’s five-seat Model Y, the Volkswagen ID.4 and General Motors’s Cadillac Lyriq will all be allowed under the $80,000 price cap as crossover SUVs. 

Companies such as Tesla and GM had previously lobbied for a more expansive eligibility standard to allow their models to qualify. Tesla cut the price of its Model Y vehicle 20 percent in January, which would make it eligible for the tax credit even before the expansion.

In January, CEO Elon Musk tweeted that it was “messed up” that the five-seat version of the Model Y was ineligible under the earlier standards.

The Hill has reached out to Tesla for clarification on whether the announcement will affect the price cut. 

Read more about the expansion here. 

WATER RELIEF

The Biden administration will distribute $580 million to 15 Native American tribes toward settling water rights claims, the Interior Department announced Thursday night. 

• The funds will include $460 million allocated from the bipartisan infrastructure law for settlements reached before November 2021 and another $120 million from the Reclamation Water Settlement Fund, which Congress established in 2009.
  
• The 2021 infrastructure law allocated a total of $2.5 billion to address native water rights settlements. The biggest single beneficiary of the funds will be the Confederated Salish and Kootenai Tribes in Montana, which are set to receive just under $157 million. 

In 1908, the Supreme Court ruled in its Winters v. United States decision that tribes have the right to as much water as necessary for their reservations to be self-sufficient. Congress had enacted 34 settlements involving water rights as of November 2021. Despite the seniority conferred by the so-called Winters doctrine, the burden of determining the details has often been placed on individual stakeholders. 

Read more about the announcement here. 

ON TAP FOR NEXT WEEK

    Wednesday 

• The House Natural Resources Committee will hold a hearing titled “Unleashing America’s Energy and Mineral Potential” 
• The House Transportation and Infrastructure Committee will hold a hearing on impacts of the Waters of the United States rule 

    Thursday 

• The House Natural Resources Committee will hold a hearing titled “Dependence on Foreign Adversaries: America’s Critical Minerals Crisis” 

WHAT WE’RE READING

• Atlanta shooting part of alarming US crackdown on environmental defenders (The Guardian) 
• Manchin pushes DOE to invest in coal that earned him millions (E&E News) 
• Minnesota’s 2040 carbon-free energy bill advances to Gov. Walz for signature (Star Tribune) 
• Extreme cold snaps: Why temperatures still plummet to dangerous levels even as the planet warms (CNN) 
• A rare and beautiful bird is turning up all over Denver this winter (The Denver Post) 
• Before and after: Lake Oroville, California’s second-largest reservoir, has risen 182 feet (The Mercury News) 

That’s it for today, thanks for reading. Check out The Hill’s Energy & Environment page for the latest news and coverage. We’ll see you next week.