Climate Change Policy in the Spotlight By Lowell Randel, IIAR Government Relations Director

President Biden has made addressing climate change a signature priority for his administration. Since his election, climate change policies have been at the forefront of agency actions, Congressional deliberations, and, most recently, before the Supreme Court. One of Biden’s early actions was for the United States to rejoin the Paris Agreement. He then created the first-ever National Climate Task Force, with more than 25 Cabinet-level leaders from across agencies working together to advance ambitious goals including:

  • Reducing U.S. greenhouse gas emissions 50-52% below 2005 levels in 2030
  • Reaching 100% carbon pollution-free electricity by 2035
  • Achieving a net-zero e missions economy by 2050
  • Delivering 40% of the benefits from federal investments in climate and clean energy to disadvantaged communities

On July 20th, President Biden reiterated his position that climate change is a clear and present danger to the United States and announced his latest set of executive actions to address climate by “turning the climate crisis into an opportunity, by creating good-paying jobs in clean energy and lowering costs for families.” The actions are intended to protect communities from climate impacts, including extreme heat conditions, and expand offshore wind opportunities and jobs in the United States.

Protect Communities from Extreme Heat and Dangerous Climate Impacts:
The Federal Emergency Management Agency (FEMA) is announcing $2.3 billion in funding for its Building Resilient Infrastructure and Communities (BRIC) program for Fiscal Year 2022— the largest BRIC investment in history, boosted by the President’s Bipartisan Infrastructure Law. This funding will help communities increase resilience to heat waves, drought, wildfires, floods, hurricanes, and other hazards by preparing before disaster strikes. BRIC is among hundreds of federal programs that the Biden-Harris Administration is transforming to support the Justice40 Initiative and prioritize delivering benefits to disadvantaged communities.

Lower Cooling Costs for Communities Suffering from Extreme Heat:
Today, the Department of Health and Human Services is issuing guidance that for the first time expands how the Low Income Home Energy Assistance Program (LIHEAP) can promote the delivery of efficient air conditioning equipment, community cooling centers, and more. In April, the Biden-Harris Administration released $385 million through LIHEAP to help families with their household energy costs, including summer cooling—part of a record $8 billion that the Administration has provided, boosted by the President’s Bipartisan Infrastructure Law.

Expand Offshore Wind Opportunities and Jobs:
The Department of the Interior is proposing the first Wind Energy Areas in the Gulf of Mexico, a historic step toward expanding offshore wind opportunities to another region of the United States. These areas cover 700,000 acres and have the potential to power over three million homes.

President Biden is also directing the Secretary of the Interior to advance wind energy development in the waters off the mid- and southern Atlantic Coast and Florida’s Gulf Coast —alleviating uncertainty cast by the prior Administration. These actions follow the President’s launch of a new Federal-State Offshore Wind Implementation Partnership that brought together Governors to deliver cleaner, affordable energy, and new jobs. President Biden has also indicated that he is considering the declaration of a national climate emergency. Such a declaration would unlock a series of powers that could enable the Administration to take additional executive actions to address climate change.

In addition, Democratic leaders in the Senate announced on July 27th that they have reached agreement on a budget reconciliation package that would raise an estimated $739 billion, with the revenue going to fund climate and health initiatives, as well as to reduce the budget deficit. While the legislation would amount to the biggest tax hike in years, it is a much smaller package than previously proposed under Biden’s Build Back Better initiative. The legislation, called the Inflation Reduction Act, would invest $369 billion in domestic energy production and manufacturing activities with the goal of reducing U.S. carbon emissions by approximately 40% by 2030. An additional $64 billion is allocated to extend Affordable Care Act coverage for another three years.

The proposal results in an estimated $300 billion deficit reduction through the following revenue provisions:

  • 15% corporate minimum tax – raising $313 billion over ten years
  • Prescription drug pricing reform – raising $288 billion
  • Increased funding for IRS tax enforcement – raising $124 billion
  • Closing the carried interest “loophole” – raising $14 billion

While the Biden Administration has been actively pushing for aggressive climate policies, some previous climate actions have been challenged in the courts, including the case West Virginia vs. EPA. On June 30th, the Supreme Court issued a major ruling that will effectively curtail some of the executive branch’s power to regulate greenhouse gases and could have broader implications on future agency actions. By a vote of 6-3, the court agreed with Republicanled states and coal companies that the U.S. Court of Appeals for the District of Columbia Circuit was wrong when it interpreted the Clean Air Act to give the EPA expansive power over carbon emissions. The decision was written by Chief Justice John Roberts, who was joined by the 5 other “conservative” justices.

The case dealt with two regulations adopted during the Obama Administration under the auspices of the Clean Power Plan. The policies were meant to combat climate change by reducing carbon emissions from power plants by shifting electricity production to natural-gas plants or using renewable energy such as wind. The CPP set individual goals for each state to cut power-plant emissions by 2030. The policies were put on hold in 2016 due to legal challenges.

Chief Justice Robert cites the “major questions doctrine” in his ruling, which is a judicially created approach to statutory interpretation in challenges to agency authority. When “major questions” are raised, the court must determine whether Congress explicitly intended to authorize the executive branch to adopt the policy being evaluated. Legal scholars believe that this adoption of the “major-questions doctrine” could have much broader effects than just EPA and impact other major policy making efforts by the federal government.

The court’s decision saying that agency efforts to curb emissions from power plants is a “major question” that Congress did not give EPA the authority to handle has led to a debate over other regulations that may or may not fall under the same label. The court didn’t clarify what might trigger the so-called major questions doctrine, but legal analysts suggest several initiatives could be vulnerable to challenges. The regulations that could be subject to the court’s interpretation of a “major questions” issue could range from EPA’s rules to boost car emissions standards, new climate accounting proposals from the Securities and Exchange Commission, and new Federal Energy Regulatory Commission initiatives. It is worth noting that the Supreme Court’s ruling should not have any impact on EPA’s implementation of the AIM Act, as Congress explicitly provided the agency with authority to regulate the production and consumption of HFCs.

It is expected that both the Biden Administration and the Democratically controlled Congress will continue to elevate climate policies in the future and the implications of the Supreme Court’s ruling will likely be tested again in the future.