In its first week in office, the Biden Administration took initial steps to meet its ambitious goals to address climate change. These steps are contained in a January 20, 2021, executive order (the "Day One Order"), a January 20 notice regarding the Paris Agreement (the "Paris Notice"), and a January 27 executive order (the "January 27 Order").
Day One Order
In the Day One Order, the Administration laid the groundwork of its climate focus by setting policies of, among other things, reducing greenhouse gas emissions and bolstering resilience to the impacts of climate change. To that end, each agency and department is instructed to consider proposing rules suspending, revising, or rescinding any agency action taken during the prior administration inconsistent with the policies. Rules specifically identified for review include rules addressing methane emissions from the oil and gas sector and fuel economy standards. It also revokes the permit for the Keystone XL pipeline.
The Biden Administration also issued a notice that it was rejoining the Paris Agreement. Since the Paris Agreement is not a formal treaty, no legislative action is required. The Agreement sets a goal of a 50% reduction from 2005 greenhouse gas emissions by 2030 and "net zero" greenhouse gas emissions by 2050. To meet these goals, each country sets its own "National Determined Contributions" ("NDC"). The Biden Administration has instructed departments and agencies to immediately begin development of a United States NDC in advance of the November Paris Agreement meeting.
January 27 Order
The January 27 Order formally designates Biden's climate campaign promises as goals of the Administration: net-zero carbon emissions by 2050 and carbon pollution-free power sector by 2035.
To implement these actions and orders, on the international level, former Secretary of State John Kerry has been appointed Special Presidential Envoy for Climate. He has been tasked, along with the Secretary of State and the Secretary of the Treasury, with developing a climate finance plan to assist developing countries in addressing climate change. The January 27 Order also directs the Secretary of State to prepare a package to present the Kigali Amendment to the Montreal Protocol to the Senate. Although the United States has signed the amendment, it has not yet been ratified by the Senate. It would require the phase-out of the production and consumption of hydrofluorocarbons, which were developed to replace ozone depleting substances.
The January 27 Order also prioritizes climate change considerations as central to the United States' national security and tasks national security and defense leaders to develop: (i) a National Intelligence Estimate on the national and economic security impacts of climate change; and (ii) a Climate Risk Analysis assessing the security implications of climate change.
Former Environmental Protection Agency ("EPA") Administrator Gina McCarthy has been appointed National Climate Advisor and will head the White House Office of Domestic Policy. She will also head the National Climate Task Force, which will include twenty-one cabinet secretaries and other senior executive branch leaders. The Task Force is tasked with facilitating and deploying a Government-wide approach to combat climate change. The January 27 Order also instructs the Council on Environmental Quality ("CEQ") and the Office of Budget and Management to require that federal permitting decisions consider the impacts of climate change, which may require changes to the recently revised CEQ NEPA regulations.
The January 27 Order directs the National Climate Advisor and the Climate Task Force to develop a strategy to align the government procurement process with climate change goals. This includes purchasing clean and zero-emission vehicles for federal, state and local vehicle fleets, including the United States Postal Service. In combination with the plan to revise fuel economy standards, these policies have the potential to radically transform the automobile industry, as evidenced by General Motors' recent announcement that it will go "all electric" by 2035.
The energy industry also faces potential transformation. The January 27 Order pauses new oil and natural gas leases on public lands and offshore waters, sets a goal of doubling offshore wind electricity production by 2030 and directs that any fossil fuel subsidies be eliminated from any budget requests by 2022. These developments are discussed in further detail in Jones Day's recent Alert. The prospects for regulation of greenhouse gas emissions from coal-fired power plants in light of the recent D.C. Circuit decision striking down the 2019 Affordable Clean Energy Rule are discussed elsewhere in this edition of The Climate Report.
Two overriding focuses of the January 27 Order are creating jobs and environmental justice. It creates several task forces to work with communities that are disproportionately impacted by climate change as well as communities impacted by the shift from traditional energy sources. Forty percent of the overall benefits of any spending are earmarked for disadvantaged communities. The Department of Justice and the EPA are tasked with working together to develop a comprehensive environmental justice enforcement strategy, including the possible renaming of the Environment and Natural Resources Division as the Environmental Justice and Natural Resources Division and directing the Environmental Protection Agency to "strengthen enforcement of environmental violations with disproportionate impact on underserved communities."
These early climate change goals set by the Biden Administration have the potential to impact many different aspects of the economy. Subsequent executive actions in line with these goals, including potential regulations, will almost certainly face litigation challenges, and the ability to implement the goals may be hampered without additional legislation or funding from Congress.