Jan 25, 2021
Change has come to Washington D.C. Just last week, Joe Biden was sworn in as the 46th President of the United States, Kamala Harris became the first woman to serve as Vice President, and Democrats took control of the Senate for the first time since 2014. Together, this marks the first time Democrats have controlled the “trifecta” since 2010, during the first two years of the Obama Administration.
With that change comes the hope and the expectation that the federal government will now chart a path toward tackling climate change through ambitious clean energy policy. Even as the warning signs of a changing climate have grown, that role that has largely been left to the states during the Trump Administration.
So what exactly do these developments in D.C. mean for the future of climate and clean energy policy at the federal level? Here’s a guide on what to expect:
A top priority for the Biden-Harris Administration
Throughout the campaign, then-Candidate Biden emphasized the urgent need to address the climate crisis and to double down on the transition to clean energy. The Biden-Harris plan proposes to invest $2 trillion in clean energy, sets a national goal of carbon-free electricity by 2035, and net zero emissions no later than 2050.
Climate change was also among of the key priority areas that President Biden addressed on day one of his presidency, in addition to addressing the COVID-19 pandemic, immigration, and student loan debt.
As promised, Biden signed an executive order recommitting the United States to the Paris Climate Accord. International efforts to address climate change will be a major focus of the Administration’s climate policy, particularly in light of the appointment of John Kerry as the Presidential Envoy for Climate as we highlighted last week.
President Biden also issued Executive Orders revoking the permits for Keystone XL pipeline and instituting a moratorium on oil and gas lease sales in the Alaska National Wildlife Refuge.
A mandate for immediate action
Despite a Democratic trifecta, and a clear mandate to act on climate, the Democrats have the slimmest of majorities in the Senate, making legislative action difficult though not impossible. As a result, President Biden will have to leverage the expansive executive powers of the Presidency to advance his agenda quickly. He will likely use executive action wherever possible and use the federal agencies to address climate change and environmental justice policies in areas within their purview. In a sign of his commitment to fully use his executive authority to act on climate, one of the first Executive Orders signed on day one by the President was a directive to federal agencies to review and in some cases reverse nearly 100 environmental actions from the Trump Administration.
In the early days of his Administration, President Trump directed the federal agencies to review and revise regulations that impeded energy production, an order that set in motion the massive rollbacks that favored coal and natural gas production under his watch. President Biden is following a similar playbook, but with a radically different end goal in mind.
At the Environmental Protection Agency we are likely to see a return to President Obama’s Clean Power Plan, which regulated carbon emissions from power plants, and a renewed focus on limiting emissions from cars and trucks, helping pave the way for wider electric vehicle adoption.
At the Department of Energy the focus will remain on research and development into energy technologies but with a laser focus on clean energy sources, particularly energy storage and electric vehicle technology. If President Biden has his way, those efforts will be boosted by a new “moonshot” initiative for clean energy, called “ARPA-C” which would focus research on cutting-edge technological solutions to the climate crisis.
At the Department of Interior, which oversees renewable energy projects on federal lands and in federal waters, expect the new Administration to cut the red tape for solar and offshore wind projects, and to reverse policies that have long favored fossil fuels and extraction on federal lands.
The Administration’s “whole of government” approach effort will also involve agencies not accustomed to having climate change directly within their mandate such as the Department of Treasury and the Department of Agriculture. A major user of energy, the federal government under the Biden Administration could turn into a leading consumer of clean energy, both through electricity and converting government fleets to electric vehicles.
What are the challenges?
Getting to the heart of President Biden’s clean energy goals, however, will require cooperation from Congress. Despite Democrats gaining control of both the House and Senate, the Senate filibuster, which essentially requires 60 votes to advance legislation, will be a key obstacle for priority issues like clean energy.
Biden has two principal paths to address climate change and clean energy this year. The first would be to include clean energy initiatives as part of a COVID-19 economic relief package, as he has previously suggested, recognizing that this investment is as much of an economic imperative today as an environmental imperative. This path is likely to offer the greatest opportunity for bipartisan action on clean energy in the near term.
The second path would be to use the Senate’s arcane rules to pass clean energy measures through what is known as “budget reconciliation” which allows certain pieces of legislation to proceed with simple majority vote, avoiding the need for the filibuster and allowing Democrats to proceed without Republican support. Senate rules, however, limit the types of provisions that can be a part of reconciliation, so any clean energy measures would have to be narrowly tailored under this path or would require the Senate to abandon decades of precedent in favor of new rules.
So what’s possible?
A recent extension of the federal Investment Tax Credit (ITC) for renewable energy sources like solar has shown that there is bipartisan support for clean energy policy. Even with the extension, the ITC is scheduled to phase down over the coming years. Congress could choose to expand the ITC, extend it to new technologies such as energy storage, or even to transition the ITC to be “technology neutral” and open the door to all possible technologies, with the credit based on the carbon profile of the technology.
President Biden and others have also highlighted the need to invest in research and development efforts in emerging clean energy technologies, as well as the need to invest in the modernization of electric grid infrastructure to unlock the full potential of these technologies. Biden has proposed an investment of $400 billion over 10 years into these efforts, which in recent years have enjoyed bipartisan support in Congress.
Another significant step President Biden has already taken is naming Richard Glick the new Chair of the Federal Energy Regulatory Commission (FERC). An independent, and historically overlooked agency, FERC has taken major steps to allow non-discriminatory access for clean energy resources to regional energy markets that have long favored fossil fuel resources. While the agency has made progress in some areas, in recent years President Trump’s nominees put their thumbs back on the scale in favor of fossil fuels which has raised costs for consumers. Simply by naming a new Chair of FERC, the President has enabled FERC over the coming years to resume the focus on removing barriers to market access for clean energy.
What’s less likely?
The narrow Democratic majorities in both the House and Senate make some ambitious policies, such as the proposal from President Biden and others to establish a federal clean energy standard like those adopted by certain states, unlikely to succeed. Policies to address carbon emissions legislatively, either through a carbon fee, cap-and-trade system, or other mechanism remain politically controversial and likewise would be unlikely to gain traction in a narrowly divided Congress. Economists and those in the environmental community who see national carbon pricing as the most efficient means to address climate are likely to be left waiting.
While the exact policies supporting clean energy at the federal level will take time to play out, there can be no doubt that the outlook for federal support and the success of clean energy industry has never been brighter.
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