Biden Climate Change Plan Certain To Impact Businesses
With only fifty days until President-Elect Joe Biden and Vice President-Elect Kamala Harris are sworn into office, the Biden-Harris team continues to work on the many aspects of transition to ensure that change can commence immediately after swearing in. While the United States and other countries wait to see the areas that will remain the focus of the Biden-Harris leadership, there is little question that one of the top campaigning issues – the environment – will remain a key focal point of the administration’s efforts in the next four years.
While there are hundreds of ways that environmental policies will likely change in the next four years, this three-part article series takes a deeper dive into the top three environmental initiatives that we predict the Biden-Harris leadership will try to tackle: (1) climate change (2) per- and polyfluoroalkyl substances (PFAS) and (3) federal agency regulatory enforcement and oversight.
Companies, both nationally and internationally, must stay on top of each of these as part of their compliance planning and overall corporate strategy. In fact, “staying on top of” these changes will not be enough – companies must look ahead and remain several steps ahead of expected changes to avoid business interruption, growth stagnation and potential tax penalties.
There is no bigger area of government oversight that will see a complete one-eighty between the Trump and Biden administrations than climate change (or, as the Biden team dubs it, the “climate crisis”). The Biden-Harris plan to tackle climate change is detailed in a 300 page document entitled the Climate 21 Project that took one-and-a-half years to create, as well as in the “Biden Plan For a Clean Energy Revolution and Environmental Justice.” However, in broad terms, the plans set out to effectuate change using three primary policy vehicles:
- Domestic policy changes
- Infrastructure changes
- Foreign policy
Domestic Policy Changes
The Biden-Harris administration’s stated goal for domestic climate change is net-zero carbon emissions from electricity production by 2035 and “a 100% clean energy economy” with net-zero carbon emissions no later than 2050. This is a lofty goal that, to be achieved, will require numerous radical changes to domestic policy. Yet, from public statements, campaign promises, and the leadership’s written plans, it is clear that the Biden-Harris administration will seek to achieve the carbon emissions goals in several ways.
Auto and Trucking Industry Changes
The likely first targets for change to achieve the net-zero goal will be the auto and trucking industries, primarily because the Obama administration previously enacted emissions standards, which were subsequently rolled back by the Trump administration. There is, though, at least a framework within which to operate for Biden’s team to strengthen auto and trucking emission limits.
In some ways, Biden’s efforts may find receptive audiences among automobile and truck manufacturers. When the Trump administration rolled back President Obama’s emissions standards, some manufacturers voluntarily chose to follow the more stringent Obama administration standards, while others supported President Trump’s rollbacks. The result was a lack of uniformity within the industry. Further complicating the emissions standards question is the fact that over a dozen states, led by California, adopted state-level emissions standards and goals that tracked the Obama administration’s standards. Those states represent roughly 40% of the nation’s car market.
The Biden-Harris administration will look to quickly bring clarity and uniformity to this issue and will at the very least, re-enact the Obama era regulations. More likely, they will adopt even more stringent regulations. Biden campaigned on the promise to make significant steps towards having 100% of new light and medium duty vehicles electric powered, and to see the trucking industry make significant steps in the same direction, so predicting that significant steps will be taken to achieve that goal is not farfetched.
The Biden-Harris administration will undoubtedly leverage its considerable financial power found in the $500 billion annual procurement budget to further incentivize auto and truck manufacturers to quickly move to cleaner emissions products. Under the government’s procurement budget, it has the ability to consider pollution levels emitted by manufacturers (including manufacturers of all of the glass, steel and other materials that go into making a vehicle or truck) when determining who to send government contracts or purchasing orders to. A similar procurement standard is found in California’s Buy Clean law. The direct impact of these considerations will be the potential for tens of thousands of federal vehicles and trucks to be purchased from manufacturers that not only adhere to the emissions standards that the federal government sets, but also from manufacturers that utilize parts producers that adhere to standards that lower levels of pollution. The impact of an initiative to include “green manufacturing” in procurement considerations thus has considerable direct and downstream market effects.
Consumer Appliances Industry Changes
Similar direct and downstream market effects will not be limited to auto and trucking manufacturers and parts providers. The consumer appliance industry will also see a resurgence of green energy regulations that were virtually done away with under the Trump administration. The regulations will primarily focus on ensuring energy efficiency, which will lower energy needs and thereby lower pollution by the energy industry due to decreased use.
Construction Industry Changes
The construction industry will also be a likely target of the Biden-Harris team’s regulations to combat climate change. President-Elect Biden campaigned on the promise that many of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) certification requirements will find their way into federal regulations. The LEED certifications currently aim to promote highly efficient and cost-saving green buildings that will offset climate change impact during a building’s lifetime.
While it will be relatively easy for Biden to enact executive orders ensuring that all federal buildings are more energy efficient and “climate ready”, it is clear that the aim of the Biden-Harris team is to have the more stringent green standards apply to private construction, as well. Look for the administration to incentivize changes in the private sector through tax breaks to construction companies, property owners, and in some instances, cities or municipalities for encouraging green construction.
Oil and Gas Industry
The Biden-Harris team has made it abundantly clear that they will set aggressive limits on methane pollution for oil and gas producers. In addition, tax cuts and breaks afforded to this industry by the Trump administration will be eliminated. It is likely that the proposed changes to the oil and gas industry aimed at fighting climate change will be heavily litigated in both state and federal courts, so change in this area will not be immediate. However, it is also likely that at least some of the initiatives will pass judicial muster and become industry standard in the United States.
The focus of the Biden-Harris plans for infrastructure changes to help curb climate change focus on creating and improving infrastructure (buildings, water systems, transportation, and energy supply) in ways that will ensure that these sectors can withstand climate change impacts. There are five key ways that Biden’s plan aims to achieve this result:
Develop new zoning and building codes that will ensure that climate change impact is taken into consideration and properly planned for;
Negotiate with insurance companies to have them lower property insurance costs if purchasers of policies and communities invest in resiliency measures to combat sea level rises, widespread wildfires, and increased hurricane occurrences;
Embark on the “second great railroad revolution” by catching the United States up to other parts of the world that have much broader and more advanced rail systems. At the same time, Biden’s plan strives to ensure that the next generation of rail investment leads to the cleanest rail industry that technology allows for;
Provide training, education, and jobs for climate resiliency employment positions throughout the country. These jobs would help to support the above efforts, as well as ensure continued advancement of the United States’ resiliency efforts; and
Establish a “carbon bank” under the USDA’s purview that pays farmers and forest owners to store carbon in their soil and land. Since carbon is naturally stored in the soil, the soil carbon sequestration efforts would significantly reduce carbon that makes its way into the Earth’s atmosphere.
One of the most immediate foreign policy moves that the Biden-Harris team will make will be to have the United States rejoin the Paris Agreement. Doing so would commit the United States to certain greenhouse gas and emissions levels by certain years, adding further incentive to effectuate changes domestically to achieve the international goals.
In addition, even before being sworn in, President-Elect Biden met with leaders of all of the major European countries in an effort to form an informal coalition of countries that will strengthen their domestic emissions reduction targets. This step is seen by many as a precursor to President-Elect Biden creating a climate change coalition of the major carbon-emitting nations in an effort to reduce the countries’ carbon emissions more rapidly. Biden has even gone so far as to suggest the creation of a published Global Climate Change Report, which would hold member nations publicly accountable for climate commitments and “name and shame” violators.
Climate change considerations will also play a part in trade agreements and arrangements made by the Biden-Harris administration. However, the administration is also aiming to create enforceable international agreements with dozens of countries that will reduce global shipping and aviation emissions. These agreements will impact the aviation industry, shipping industry, and port authorities worldwide, as well as have likely impacts on tariffs among countries.
The Biden-Harris goals for combatting climate change are lofty and, even if re-elected to a second term, likely cannot be achieved within the coming administration’s time in office. However, the Biden-Harris team clearly wants to take significant and meaningful steps to lay a strong foundation for future administrations to build on (or, to make the foundations difficult to reverse). We predict that the Biden-Harris team will attempt to address climate change through the above domestic, infrastructure, and foreign policy changes. It is critical for companies of all types to pay close attention to the changes that aim to tackle climate change, as they will impact numerous business sectors, either directly or indirectly. Change is coming and the key for any company is to identify change that will impact its business and prepare accordingly.
Follow this story line for future articles detailing the Biden-Harris administration’s impact on environmental regulatory agency authority and PFAS issues.