President Biden’s executive order "tackling the climate crisis" fleshes out his campaign promises on climate change

9-minute read

 

On January 27th, President Biden has signed the landmark executive order "tackling the climate crisis at home and abroad." The Biden Administration aims to pursue a whole-of-government approach. The executive order puts climate change at the center of the U.S.’ domestic and foreign policy, highlighting the threat that it represents to national security. The President ordered the freezing of new federal oil and gas leases, the cancelation of the Keystone XL pipeline project [1], the electrification of the U.S. government’s 650,000 ICE vehicle fleet, and the establishment of new positions within the administration, such as the White House Office of Domestic Climate Policy and the Special Presidential Envoy for Climate. As expressed during his campaign, Joe Biden is advocating for the creation of union jobs in the EV manufacturing and energy sectors.  

 

By signing the executive order on climate change, the henceforth President Biden has laid the foundations for delivering on his campaign agenda (see Table 1 below, NB: one should not interpret the absence of a campaign proposal in the executive order as evidence of it having been dropped). His first weeks in office have confirmed our assumption that the 2020 U.S. Presidential elections were poised to be a pivotal moment for the country’s climate change action (see our October flagship report) analyzing the climate agendas of both presidential candidates).

Sources: Natixis GSH Flagship Report U.S. 2020 Presidential Elections, available here,

Executive Order on Tackling the Climate Crisis at Home and Abroad, available here

 

Despite swift executive action on climate change, there still are political obstacles ahead. Though announced by the President, an executive order does not count as legislation. It requires no approval from Congress [2]; and Congress cannot simply overturn it. Only a sitting U.S. President has the power to overturn an existing executive order by issuing another one. Congress can, however, pass bills that would render the implementation of the executive order harder, such as the removal of funding. [3] Detailed and budgeted legislation by Congress will facilitate the implementation of the aforementioned objectives.

Putting the Climate Crisis at the center of U.S. Foreign Policy and National Security

The chief measures put forward in President Biden’s executive order can be grouped into three categories: foreign policy, international financing, and national security.

1. Foreign Policy

• President Biden will host an early Leaders’ Climate Summit, convening the leaders of the Major Economies Forum on Energy and Climate (a Forum launched by President Obama [4]) with the aim of “raising the climate ambition and making a positive contribution to COP26”, set to take place in Glasgow in November this year. The President’s Climate Leaders Summit scheduled for April 22, Earth Day, will serve as a "climate assembly".
• The United States will immediately begin the process of developing a new nationally determined contribution (NDC) in order to realign itself with the goals set out in the Paris Agreement and has reiterated it wishes to disclose its new NDC by the Earth Day climate summit. The US submitted its first NDC under the Obama Administration in September 2016 but lost momentum when President Trump withdrew from the Paris Agreement in 2017. [5] Since then, many countries including those in the EU and Latin America, the UK, Russia, and many developing countries submitted their second or updated Nationally Determined Contributions. [6]

 

2. International Financing

• The U.S. pledges to develop a comprehensive climate finance plan to promote the flow of capital toward climate-aligned investments and away from high-carbon investments. This will be done by fulfilling and increasing U.S. contributions to the Green Climate Fund, contributions to multilateral climate organizations — such as the Adaption Fund and the Least Developed Countries Fund —, integrating climate throughout all development funding, and urging development banks to align with the Paris Agreement.
• President Biden has pledged to develop a strategy on how to use the U.S.’ vote in the international financial institutions, such as the World Bank and the International Monetary Fund (IMF). The Special Presidential Envoy for Climate, John Kerry, announced that the U.S. plans to end U.S. international fossil fuel financing at the World Economic Forum late January. The U.S.’ Export-Import Bank (EXIM), the U.S. International Development Finance Corporation (US DFC), and USAID have a key role in President Biden’s policy due to their strategic capacity to promote ending international financing of carbon-intensive fossil fuel-based energy and advancing sustainable development and a green recovery.

 

3. National Security

• It is the first time for a U.S. government to publicly tackle climate change as a matter of national security. A new presidentially appointed position has been created —The Special Presidential Envoy for Climate — to elevate the issue of climate change and underscore the commitment of the Biden administration. The position is different from the position of Director of the White House Office of Energy and Climate Policy under the Obama Administration, as it is forming part of the United States National Security Council (NSC), demonstrating the U.S.’ administration’s awareness of the climate crisis and its impact on national security. The position is held by former U.S. Secretary of State, John Kerry.

 

Taking a Government-wide Approach to the Climate Crisis

The Biden Administration envisages an all-of-government approach, involving State, local, and Tribal governments. The main domestic policies set forth in the executive order entail the following:

New Offices

• President Biden created the White House Office of Domestic Climate Policy within the Executive Office of the President. It is tasked with coordinating domestic climate policy, ensuring country-wide climate policy consistency, and advising the president with climate policy advice.
• He also established the National Climate Task Force, bringing together leaders from 21 federal agencies and departments to permit a whole-of-government approach. The Task force will facilitate, among others, planning and implementation of key Federal actions to reduce climate pollution; increase climate change resilience, biodiversity protection, and environmental justice.

 

Fossil Fuels

• To the legal extent possible, the executive order states that “the government shall pause new oil and natural gas leases on public lands or in offshore waters pending completion of a comprehensive review and reconsideration of Federal oil and gas permitting and leasing practices”.
• The Biden Administration will ensure that steps are taken to ensure that, to the legal extent possible, Federal funding is not directly subsidizing fossil fuels. Fossil fuel subsidies will ultimately be eliminated from the budget request for the 2022 fiscal year and thereafter. Determining what is considered as a subsidy can be arduous, as not everyone agrees upon what counts as a fossil fuel subsidy and what does not. Subsidies usually come in the form of regulatory loopholes or tax breaks. [7] Nevertheless, President Biden’s order indicates that the government is only capable of “eliminating subsidies as consistent with applicable law”, acknowledging that fossil fuel subsidies granted by Congress could be out of reach because of the equal division of seats among Democrats and Republicans in the Senate.

 

Federal Clean Electricity and Vehicle Procurement Strategy

• The National Climate Task Force will develop a detailed plan to stimulate clean energy industries by revitalizing the federal government’s sustainability efforts. A key component of this plan is the replacement of about 650,000 government-owned (all levels of government) ICE vehicles with electric models [8], and for Federal, State, local, and Tribal government fleets, including the U.S. Postal Service. The timeline for such objective is unknown.
• The Biden Administration pledges to have a carbon pollution-free electricity sector no later than 2035. According to the IEA, the U.S. currently produces 61% of its electricity from natural gas and coal (39% natural gas & 22% coal), 20% from nuclear, and only 18% from renewables. [9]
• President Biden also announced he would increase renewable energy production on federal land and waters with a goal of doubling offshore wind power production by 2030, which stood at 28.5 GW in 2019. [10]

 

Biodiversity, Pollution, and Local Environments

• President Biden has pledged to enhance efforts in conserving the nation’s lands and waters, iterating his commitment to conserving at least 30% of the country’s lands and oceans. [11]
• In order to address the climate crisis in an equitable manner, President Biden has committed to the creation of a civilian climate corps and will revitalize communities reliant on fossil fuels industries. The initiative aims to mobilize future generations of conservation and resilience workers to, among other plans, conserve and restore public lands and waters and increase carbon sequestration in the agricultural sector.
• The order creates a White House Environmental Justice Interagency Council, which addresses the needs of communities that have been harmed by pollution. The pledge involves the allocation of 40% of federal climate investments towards marginalized communities. Fossil fuel workers are to be tasked with plugging methane gas leaks and handling restoration works.

 

Concluding remarks

Overall, President Biden’s decisions on climate change are comprehensive. However, the executive order is missing a dedicated section addressing coal concerns. Even though the section on fossil fuels indicates that the Secretary of the Interior shall consider adjusting royalties related to coal, oil, and gas resources extracted from public lands and offshore waters, it largely ignores coal in the executive order’s section on the leasing of public lands for natural resources extraction, only mentioning oil and gas. This is particularly worrying as coal is disproportionally sourced from federal lands. In the U.S., federal coal [12] entails an even bigger share (42% in 2017) of total U.S. coal production than the share of federal oil (24%) or natural gas (13%) in their respective industries. Most lands on which coal companies operate are publicly owned. [13] During the Obama Presidency, coal stood at the center of American politics, with then Secretary of the Interior, Sally Jewell, placing a restrictive ban on new federal coal leases. [14] President Trump advocated for the use of coal and lifted President Obama’s federal coal-mining ban. Compared to the agendas of his predecessors, coal is not fully tackled  in President Biden’s executive order on climate change. The only time the order references coal is when disclosing plans on assisting communities relying on the coal sector.

 

To make Biden’s climate legislation more robust, it would require a bill to be passed in the Senate. Most bills in the 100-seat Senate require 60 votes to pass. An imperceptible margin, a 50-50 tie, could, however, prove to be advantageous for the Biden Administration, given the tie-breaking role of Vice President Kamala Harris. [15] Nevertheless, the tight Democratic majority in the Senate could still limit the possibility for President Biden to achieve significant climate change reform. Senate Republicans and especially moderate Democrats from fossil fuel-producing states who view climate change-oriented policies as harmful to their home states could potentially stand in the way of President Biden’s climate ambitions.

 

Republican senators, especially those from oil-producing states, are ready to defend big oil. Ted Cruz has iterated his discontent about President Biden’s decision to cancel the Keystone XL Pipeline project, a strategic oil pipeline connecting Alberta and Montana oil facilities to refineries on the Gulf Coast. [16]

 

One of the Democratic senators that could hamper President Biden’s eventual coal phase-out plans is Senator Joe Manchin of West-Virginia, who has often defended coal production in his home state. His vote could be particularly weighted as he also is the incoming chairman of the Senate Energy Committee. Ultimately, a small group of moderate or pro-fossil fuel Democrats could obstruct efforts to impose cogent climate measures into budget reconciliation bills, which, otherwise, would only require a simple majority to pass in Congress.

 

Looking towards the future, the Biden Administration has certainly already fleshed out a significant portion of the required strategy. However, various hard-to-abate sectors, such as freight, transportation, and aviation, have not yet been addressed by the Biden Administration. Meanwhile, and for the time being, little details are known on the climate finance agenda.