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Barring any unexpected changes or legitimate legal challenges, it appears that former Vice President Joe Biden will be the 46th President of the United States. Since this appears to be the inevitable outcome, it is paramount that we turn our attention to those issues most salient to a Biden administration. Chief among these is the issue of climate change and clean energy.
Since early on in the campaign, Biden and the Democrats have made it clear that climate change is going to be at the very top of the agenda. As the Washington Post described, the Biden camp is already preparing a “flurry of executive orders” to be issued shortly following inauguration. Some parts of this agenda, like the Clean Power Plan and Paris Accords, are merely the reestablishment of Obama-era policies that were rescinded by the Trump administration, while others, particularly the emphasis on so-called “environmental justice,” are offshoots of the progressive left’s Green New Deal.
What follows is a brief rundown of many of the likely policies a Biden administration would seek to implement within their term.
Paris Climate Agreement
Signed by some 196 nations belonging to the United Nations Framework Convention on Climate Change (UNFCCC) in 2016, the Paris Climate Agreement is an all-encompassing international framework regarding greenhouse gas and other emissions. In the accords, the signatory nations asserted that climate change presents an existential threat to humanity, and that all countries should take dramatic steps to curb their emissions. The goal of the agreement was to “achieve a balance between anthropogenic emissions by sources and removals by sinks of greenhouse gases.” While the Paris Climate Agreement has no international enforcement mechanism to force countries to reduce emissions, it does require member nations to implement a plan and regularly report to the UN on their activities to mitigate climate change.
President Obama, a strong proponent of the accords, signed the United States onto the Paris Climate Agreement in September of 2016. In his announcement, President Obama stated, “We have a saying in America — that you need to put your money where your mouth is. And when it comes to combating climate change, that’s what we’re doing, both the United States and China. We’re leading by example.” Rather predictably, the Obama administration's belief about the power of international agreements over our world’s largest polluters turned out to be wishful thinking.
While the agreements had a chilling effect on energy investment and production in countries like the United States who were faithful to the agreement, many other signatories have continually failed to live up to their commitments. In particular, China under President Xi Jinping -- which President Obama regularly praised as his compatriot in their efforts to combat harmful emissions -- has seen increased emissions in recent years. In an independent analysis of the Paris Climate Agreement, the International Energy Agency found that “China’s actions and its historic approach to international cooperation indicate that a meaningful reduction in emissions from China is unrealistic, thus undermining the Paris agreement’s justification.”
The failure of the Paris Climate Agreement to produce any real results, accompanied by the undue economic burden placed on the energy industry, led the Trump campaign to make withdrawing from the agreement an essential piece of their energy policy. True to his word, in June of 2017 President Trump notified the UN that the United States was formally withdrawing from the Paris Climate Agreement. During a statement in the Rose Garden, President Trump expounded his reasons for withdrawing. “The Paris Climate Accord is simply the latest example of Washington entering into an agreement that disadvantages the United States to the exclusive benefit of other countries, leaving American workers — who I love — and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories, and vastly diminished economic production.”
Now, years later while many member nations continue to shirk their commitments, Joe Biden insists on America rejoining the Paris Climate Agreement. In fact, he’s gone one step further, indicating that he would move to rejoin the accords on day one in office. Although rejoining the Paris Climate Agreement would not have immediate, concrete effects on energy policy, the fact that it is top of mind for a Biden administration indicates that the accords represent the tip of the spear for radical domestic policy changes.
Clean Power Plan
Announced in August of 2015, the Clean Power Plan (CPP) was one of the principal policies implemented by the Obama administration to combat climate change by reducing carbon emission nationwide. Based on the authority given to them under the Clean Air Act, the Environmental Protection Agency (EPA) set emissions targets for all states, tribes, and U.S. territories. These mandates established carbon dioxide (CO2) emission performance rates for fossil fuel burning power plants, leaving the planning and implementation of these goals up to the relevant local authorities.
These emissions standards faced numerous legal challenges from stakeholders, and their projections of higher energy prices, fewer jobs, and less growth turned out to be true. By targeting coal-fired power plants in particular, regions like West Virginia and Pennsylvania who were already under pressure from the natural market transition to renewable energy faced historic economic downturns. As it turned out, democratic presidential candidate Hillary Clinton’s proclamation in 2016 that “we're going to put a lot of coal miners and coal companies out of business,” was accurate, leaving many communities behind.
In response to the economic impact of the CPP, the Trump administration replaced the plan with the Affordable Clean Energy (ACE) rule in 2019. The ACE rule took a far more balanced approach to the abatement of carbon emissions. Under the Trump rule, EPA continues to provide states, tribes, and territories with guidelines for “developing plans to limit carbon dioxide (CO2) at their coal-fired power plants.” Yet, the ACE rule provides more flexibility and regulatory certainty by extending the timeframe to three year improvements and focusing on “heat rate improvements as the best system of emission reduction (BSER).” As opposed to the CPP, the ACE rule establishes a concrete framework for providing federal guidelines rather than relying solely on the discretion of EPA administrators.
While restoring the Obama-era CPP is a near certainty, the question remains whether a Biden administration would merely reimplement the Obama plan, or whether they would use the opportunity to strengthen the CPP. Considering the inordinate amount of litigation over the Clean Air Act authorities used in the CPP, it is likely that Biden would first need to grant EPA greater authority through legislation. Regardless, stakeholders in the fossil fuels industry should be wary of issues like the CPP which Biden has promised to unilaterally address immediately upon inauguration.
National Energy Efficiency and Clean Energy Standards (EECES)
Beyond the first 100 days in office, the Biden climate agenda only increases in intensity. Another policy proposal high on the list for a Biden administration is the creation of a national Energy Efficiency and Clean Energy Standard (EECES), sometimes referred to as Renewable Portfolio Standards. Currently implemented in 29 states, these types of policies require that a certain portion of an area’s utility sales come from either low-carbon or zero-carbon sources. Counterintuitively, these types of policies have historically resulted in increased energy prices for consumers and minimal emissions reductions.
As I outlined in a recent blog, EECES is one of the worst possible options among policies aimed at reducing carbon emissions. Studies have shown that Renewable Portfolio Standards consistently result in higher energy prices for consumers. Perhaps more importantly, when researchers have measured the social cost of carbon (SCC) abatement through EECES, they found that it was significantly more expensive than alternative methods. Taking EECES nationwide would present a disaster for the energy industry, resulting in job losses and higher energy prices across the country.
Carbon emissions are not the only air pollutant on the Biden team’s radar. On day 1, Biden has promised to create new “aggressive methane pollution limits for new and existing oil and gas operations.” He has similarly promised to reenforce aggressive automobile emissions standards that were justifiably rolled back under the Trump administration. The new vehicle emissions standards are aimed at achieving the lofty goal of ensuring that 100 percent of new vehicles are sold with zero emissions. Unfortunately, a Biden administration will not stop with emissions standards. They aim to reorganize our economy’s entire relationship with fossil fuels.
For starters, “Biden will require public companies to disclose climate-related financial risks and the greenhouse gas emissions in their operations and supply chains.” He will also “work to enact legislation requiring polluters to bear the full cost of their climate pollution,” within his first year, signaling a transition towards either a cap-and-trade system, or a tax on emissions. Regardless of which form the final policy takes, it is clear that the Biden administration's approach to climate change will not stop at government action. They intend to create intense new top down mandates to force private citizens and corporations to accede to their agenda.
Nowhere is the extent of the Biden climate agenda more obvious than in their insistence that “environmental justice” ought to pervade every aspect of governmental decision making. This effort attempts to mobilize the entirety of both the public and private sectors to address what are perceived as “environmental injustices affecting communities of color, low-income communities, and indigenous communities.” This line of thinking is a direct offshoot of radical postmodern environmentalist thinking in the 1980’s and 1990’s, and has become a central part of the progressive left’s vision of environmental policy.
Since environmental justice, like most other postmodernist theories of social justice, is an all-encompassing theory, it can be difficult to pinpoint exactly what impact such a frameshift might have. What is certain is that environmentalist thinking will be at the core of all policymaking in a Biden White House. Biden has indicated willingness to create a National Climate Council that would be co-equal to the National Economic Council, and even nodded at creating a cabinet position for Climate Czar. In this sense, the insistence that environmental justice be at the forefront of federal policy presents uncertainty for the energy industry, as policy becomes tied up in the perceived social issue of the day, rather than following a utilitarian approach based on statistics.
One of the least discussed issues in the Biden climate agenda is the preposterous promise to create “1 million jobs upgrading 4 million buildings and weatherizing 2 million homes over 4 years.” To be certain, the age of America’s homes and corporate buildings does nothing to help our nation’s energy efficiency. However, the idea that the federal government can swoop in with direct payments, tax incentives, and altered building codes and renovate 4 million buildings is, frankly, ridiculous. As a point of contrast, in 2019 a mere 5,700 buildings earned EPA’s Energy Star rating, an award given for energy efficiency, bringing the total 36,000 buildings nationwide. One would hope that a President Biden would have better things to do than worry about weatherizing apartment windows.
There are to be no doubts about the extent of the Biden climate agenda. Drawing on rhetoric surrounding COVID-19, Climate 21 -- the Biden transition team’s climate brain trust -- has outlined “a whole-of-government climate response at the dawn of the next administration.” Their report organizes reforms by agency across most the executive branch, including changes not only to the Department of Energy and EPA, but also the Departments of Treasury, State, and Interior, further indicating that no corner of the federal government will go untouched by the Biden climate agenda.
What has been presented above is not an exhaustive list of changes that Biden will make. Instead, it serves to prove the point that the Biden climate agenda will be a radical frameshift for our national policy. This agenda will certainly focus on the energy industry, but it will also creep into every corner of the federal bureaucracy.