Update on President Biden’s Climate Agenda

Biden White House

Despite setbacks, such as not being able to secure speedy Congressional enactment of the President’s climate legislation (called Build Back Better) and not convincing China to make ambitious revisions to its nationally determined contribution (NDC), the Biden administration believes it produced a number of major climate successes in 2021.

These perceived accomplishments included re-establishing American global leadership on climate, reversing President Trump’s rollback of domestic environmental regulations, and passing a bipartisan infrastructure bill with green provisions. In 2022, the Biden administration is looking to build on these successes with fresh victories both domestically and internationally. The Biden administration is expected to keep climate change as a policy priority in 2022, although voting rights, the global pandemic, the Russia-Ukraine crisis, and the economy are likely to be even higher priorities in the New Year. This year is crucial to President Biden’s ability to set the country on a path to meeting his administration’s climate pledges.  This year could be the country’s last chance to enact bold climate initiatives for a decade, given the likelihood that Republicans will gain new power in November’s midterm election. In this post we analyze whether the United States can meet its 2030 NDC without enacting Build Back Better,  the Biden administration’s top international climate policy priorities for 2022, and recent executive action on climate change by the Biden administration to gauge its climate progress.

U.S. Emissions Without Build Back Better

President Biden’s climate agenda is in doubt with Senator Joe Manchin (Democrat-West Virginia) refusing to yet put his support behind the latest version of Build Back Better (which mainly includes a huge amount of federal spending on clean technologies and innovation. Senator Manchin, whose vote is necessary to pass Build Back Better, continues to express concerns over the overall level of spending in the package and a number of specific provisions. Nevertheless, climate legislation still could be a possibility this year, but if Build Back Better does in fact die in Congress, the United States would have significant difficulty reaching its climate goal of 50 percent reduction in emissions by 2030 and would more likely than not come up short. The climate initiatives in Build Back Better include extended tax credits for renewable energy, subsidies for purchasing electric vehicles (EVs), financial incentives for industrial decarbonization, among others. Without them, the United States would have to rely on increasing its climate ambition through executive action, state and city governments, and changes in business and consumer behavior. This scenario would bring about a patchwork of actions without federal leadership and could leave too many holes in U.S. climate policy for the United States to decarbonize quickly. Modeling from Princeton University’s REPEAT Project (see Figure 1 below) says that the country would fall 1.3 billion tons short of the Biden administration’s 2030 target without Build Back Better, “a yawning gap that is unlikely to be bridged by executive action or state policy alone,” said Princeton’s Jesse Jenkins.

Figure 1: Emissions Gap Without Build Back Better

Source: REPEAT Project

The Rhodium Group, a leading climate economics consultancy, has similar estimates, saying that without new federal policy, the United States would see greenhouse gas reductions of just 17-25 percent by 2030. Even though current trends show growth in clean energy, such as the penetration of wind, solar, and EVs, they need a greater push from the federal government to meet the 50 percent target. Energy Innovation, a respected energy modeler, says that without new policy, the U.S. electricity sector would have 43 percent clean energy by 2030, in contrast to the 80 percent needed to reach the U.S. target. Similarly, EV sales would fall short without strong federal policy. Energy Innovation sees EVs reaching 23 percent of new vehicle sales instead of the 50 percent needed to meet the U.S. NDC.

International Outlook: U.S. Diplomatic Priorities in 2022

In 2021, the United States made significant contributions to international climate ambition by updating U.S. emissions mitigation and climate adaptation plans, and by helping facilitate a host of new global commitments and initiatives at COP26 in Glasgow. The Biden administration and the U.S. climate community, however, recognize that these actions will not limit warming to 1.5 degrees Celsius. In 2022, the United States is looking to ensure that not only are current promises implemented, but that the international community moves beyond them. More specifically, Special Presidential Climate Envoy John Kerry and his team at the State Department intend to      focus on two core diplomatic priorities: helping nations implement their climate pledges and pursuing international activities outside of national emissions targets.

The administration’s key area of diplomatic focus for the United States in 2022 will be continued engagement with China. Despite not securing a more ambitious commitment from China during COP26, the United States is keen to move forward with the priorities the countries outlined in their Joint Statement. The delegations from both countries are currently constructing a work program that will emphasis three main objectives: (1) accelerating phase down of coal consumption; (2) China’s commitment to put together a national action plan for methane before the next COP; and (3) best practices on banning the import illegal forest products.  Alongside these new priorities, there are likely to be continued efforts by the United States to get China to commit to the new climate goals the U.S. had hoped to secure in 2021, such as an earlier date for peaking emissions and increasing the amount of renewable energy in China’s energy mix.

The administration will also focus on implementation-centered activities, which will center on goals and commitments that have already been announced. Priorities for the United States include:

  • Following through on domestic promises: The White House will continue to push the Build Back Better Act through Congress, which includes billions of dollars in climate funding (see update in previous section), and the EPA will be strengthening domestic regulations to help meet the new U.S. NDC targets. The United States hopes strong domestic action will bolster its international credibility and give it greater leverage in climate negotiations with other countries.
  • Providing international climate finance: The administration recognizes the importance of delivering on the $11.4 billion in international climate finance President Biden committed to in 2021. The financing must come through the federal budget, which is currently under consideration in Congress. The FY2022 bill allocates $1.45 billion to the Green Climate Fund, and the administration will likely ask for more in the FY2023 federal budget this spring. Additionally, the United States plans to engage with other donors to align climate finance contributions through initiatives like the NDC Partnership and pressure other large economies to follow through on their funding promises.
  • Supporting NDCs: S. executive agencies, such as the State Department and USAID, are looking to ensure their climate programs are aligned to best to support other countries in implementing and defining their NDCs. Most of this work will occur in countries that already have ambitious and updated NDCs, such as South Africa.
  • Implementing adaptation: The administration will implement the President’s Emergency Plan for Adaptation and Resilience (PREPARE) framework to increase support to developing countries in adapting to climate change, particularly in expanding knowledge of climate risks and vulnerabilities, mobilizing finance, and creating adaptation plans. This will require coordination across the five core agencies highlighted in PREPARE: USAID, State, Treasury, the National Oceanic and Atmospheric Administration (NOAA), and the U.S. International Development Finance Corporation (DFC).
  • Supporting COP26 initiatives: One of the top administration priorities is ensuring that the pledges at COP26 have tangible results in 2022. That includes those on deforestation, methane, and fossil fuels—key pledges that the United States helped negotiate in Glasgow.
  • Enhancing transparency: The final version of the Article 13 Transparency requirements agreed to in Glasgow allow two years to implement transparency guidance. The United States intends to support countries in beginning this work in 2022.

The United States, however, has realized that even if all these goals are achieved, much more work is necessary to keep 1.5 degrees within reach. The Biden administration’s second priority for 2022, therefore, will focus on efforts to go to enhance ambition globally. Priorities in this category include:

  • Increasing G20 commitments: The United States will be pushing G20 countries, particularly China, to produce more ambitious climate targets and increase their climate finance pledges.
  • Pursuing bilateral and minilateral agreements: Similar to the deal agreed with South Africa at COP26, the United States is likely to pursue new agreements with big emitter developing countries, such as India and Indonesia, to support the adoption of renewable energy and provide financial support for these countries to go beyond their current NDCs.
  • Phasing down fossil fuels: The administration has recognized the importance of moving away from coal and phasing out fossil fuel subsidies and will work internationally to achieve a fossil-fuel phase out.
  • Decarbonizing key global economic sectors: Following up on the US-EU Steel deal announced at COP26, the United States will continue to work on decarbonizing key sectors of the economy, such as aviation, shipping, agriculture, and industrial processes. The administration plans to do this through a variety of processes, including bilateral engagement with key countries, the Major Economies Forum (MEF), G7, G20, Clean Energy Ministerial (CEM), Mission Innovation, UNFCCC, First Movers Coalition, and the February Our Ocean Conference.

With the ambitious plans for 2022 comes a series of challenges that also must be addressed. First, the Glasgow decision text requests that “Parties to revisit and strengthen the 2030 targets in their nationally determined contributions… by the end of 2022, taking into account different national circumstances.” Some major developing countries, however, do not believe this request applies to them. The United States wants to focus on how to increase ambition in 2022 from major emitters, while taking into account specific national circumstances and focusing bilateral efforts on these countries. The second major challenge is timeframes. Many issues in the international negotiations have different timeframes, which can skew the attention issues get on the international stage. For example, while the Glasgow Climate Pact set 2022 as a timeframe for many mitigation targets, there is already pressure to focus on other issues at the next COP.  However, the United States does not want to lose the momentum created on mitigation and therefore will likely continue to champion mitigation throughout the next year, while ensuring there is sufficient attention to other key issues in the lead up to COP27.

Update on President Biden’s Executive Action

With congressional action stalled for the time being, President Biden has moved forward with executive actions that will reduce emissions long term and are important steps for the country to reach its 2030 emissions target. The two latest actions that will have widespread consequences include revised fuel efficiency and emissions standards for new passenger vehicles and light trucks and directions for the federal government to reach carbon neutrality by 2050. This section analyzes the importance of President Biden’s recent climate executive actions.

New Vehicle Emissions Standards

The Environmental Protection Agency (EPA) announced late last year its new standards for passenger vehicles and light trucks that would first be enforced for model year 2023, with the average fuel economy rising through 2026. In the new rules, which will take effect in February, the EPA is targeting an average fuel economy of 40 miles per gallon (mpg) for new vehicles by 2026, versus the current rule that aims for 32 mpg. The new target is slightly higher than the EPA’s proposal announced during the summer. The EPA’s fuel economy rules were weakened during the Trump administration and are now back on a path similar to what was seen during the Obama years. The EPA is also planning to establish fuel efficiency standards for the 2027-2030 period, which would also include medium-duty vehicles.

The new rule is poised to not only cut emissions, but also save costs for motorists and improve public health through lower pollution. The EPA estimates that the new standards will cut greenhouse gas emissions by 3 billion tons and save consumers as much as $420 billion on fuel through the next three decades. This order will also likely speed up the manufacturing of electric vehicles (EVs) by auto companies since EVs can be used by automakers to meet new standards. This could help the United States reach President Biden’s goal of EVs making up 50 percent of new vehicle sales by 2030. This order, on its own, however, won’t likely get the United States to that target, as EVs are now below 4 percent of total sales. Tax credits for consumers that are included in Build Back Better would be needed to come near the 50 percent goal—which is seen as likely difficult to meet because of consumer preferences and limited charging infrastructure. The Bipartisan Infrastructure Bill, passed in 2021, provides $7.5 billion for building EV charging stations, but that amount is likely insufficient for EVs to make significant inroads at the pace the administration would like to see. The administration, in its efforts to promote electrification in the transportation, has also included EVs in new procurement standards for the federal government (see more below in the discussion on Carbon Neutrality for the Federal Government).

Climate groups and public health groups were mostly positive about the new standards, but auto manufacturers will likely keep pushing back on their stringency and cite costs and feasibility as factors that could lead to a clash between the industry and the administration. The Alliance for Automotive Innovation, which represents car manufacturers, says that since the standards are more aggressive than anticipated, the industry will need government help—through consumer incentives, new infrastructure, and manufacturing and supply chain support—to reach the goals of the standards.

Carbon Neutrality for the Federal Government

In early December, President Biden signed an executive order to put the federal government’s operations on a pathway to cut carbon emissions by 65 percent by 2030 and become carbon neutral by 2050. The Biden administration is looking to accelerate uptake of clean energy in the U.S. economy through leveraging the federal government’s purchasing power, which would completely revamp the way the government uses energy. This plan is in line with the administration’s “whole-of-government” approach to curbing emissions and fighting climate change. The order aims for carbon-free electricity by 2030, purchasing only zero-emission vehicles by 2035, and the full decarbonization of federal buildings by 2045. Also, the government will seek to be carbon neutral in its supply chains by 2050, as the order includes a “Buy Clean” provision that will boost the use of lower-carbon materials for construction, such as cleaner steel or cement.

Since the federal government is the country’s largest consumer and employer, this executive order has the potential to be very wide-ranging through specific goals for cutting emissions in the use of buildings, equipment, and vehicles. President Biden, through federal government procurement and changes in its energy consumption, wants to send a signal to the marketplace to bring about broader shifts in demand and spur innovation for low carbon technologies that can get a boost from small- and medium-sized businesses competing for federal government business.

The U.S. government has seen its energy consumption, which is around 900 trillion BTUs, or 1.5 percent of the country’s total, decline over the past two decades. And these measures will accelerate the trend, building off of executive orders from previous administrations, including one signed by President Obama in 2015. The Biden administration estimates that the new order will affect 300,000 buildings, 600,000 vehicles, and $650 billion of goods and services.[5] The government will cut emissions through upgrading or retrofitting existing buildings with energy efficiency or renewable energy technologies while also adhering to stricter standards for new facilities through a Federal Building Performance Standard. The biggest gap in the order is that it exempts the U.S. military and Department of Defense (DOD) private contractors. Defense accounts for almost three-quarters of the government’s energy consumption, and the DOD is the largest energy consumer in the world.

Left-leaning groups reacted favorably to the administration’s order, but would like to see President Biden take more steps in this area. Josh Freed of the Third Way said that the administration’s plans mirror what China is doing through its government purchases of clean energy. The Sunrise Movement, meanwhile, reacted by pressuring the administration to eliminate oil and gas production on public lands and curtail new pipelines. Republicans argued that the order will hurt jobs in energy-producing states and unnecessarily grow the federal bureaucracy. Senator John Barrasso (Republican-Wyoming) said in a statement: “With this action, he’s telling millions of Americans who provide most of the energy we use every day that he thinks they should be thrown out of work. What’s worse, he wants to use the power of the federal government to do it.”

As always, the biggest downside of climate action through executive orders is that they can be reversed by future administrations. For example, President Obama strengthened fuel economy standards, but they were rolled back by the Trump administration, which also challenged in court California’s authority to set its own standards. President Biden’s reversal would be at risk should a Republican win the presidency in 2024.