Climate Change

The Biden administration is putting climate change at the heart of its decision-making, with President Biden recognizing it as an “essential element of U.S. foreign policy and national security [as well as trade].” In the first week of his presidency, Biden recommitted the U.S. to the Paris Agreement, reinstated more than 100 environmental regulations that had been rolled back or weakened by President Trump, ordered the Secretary of the Interior to stop entering into new oil and natural gas leases on public lands, and cancelled construction of the XL Keystone Pipeline, among other actions. Additional actions are forthcoming, with climate-related measures anticipated to be implemented domestically and across the U.S. foreign policy apparatus.

To tackle climate change, President Biden’s plan outlines several key long-term domestic benchmarks, including a 50 to 52 percent reduction from 2005 levels in economy-wide net greenhouse gas pollution in 2030–nearly double the target set by former President Obama–and 100 percent carbon pollution-free electricity by 2035. The targets are consistent with the administration’s overarching goal of achieving net-zero emissions by 2050, a deadline that climate scientists say is necessary to avoid the most catastrophic effects of climate disruption. To achieve net-zero, the generation of carbon emissions can be offset via the removal of carbon from the atmosphere by natural or technical means, such as planting trees and leveraging carbon capture technology. In late March 2021, Biden proposed the American Jobs Plan, an expansive $2 trillion infrastructure bill that seeks to build smart infrastructure and boost domestic climate resilience efforts over the next 10 years. Through a combination of tax credits and spending, the proposed bill seeks to rebuild 20,000 miles of roads and 10,000 bridges, eliminate lead pipes from the country’s water supplies, shift the U.S. to clean energy sources, and in the short run, create millions of jobs while strengthening economic competitiveness and promoting racial equality in the economy in the long run. Beyond the infrastructure bill, as a candidate, Biden promised that in partnership with universities, the private sector, and local governments, the administration would also develop regional climate resilience plans and low-carbon manufacturing to support local economies. According to Biden’s team, the combination of state, local, federal, and private-sector investment needed to tackle climate is estimated at $5 trillion.

The administration also plans to make an additional $400 billion in federal investment over the next ten years in clean energy research and development to innovate zero-carbon technologies and support the national transition to a green economy. The climate research and innovation arm of the federal government will be run through a new agency called the Advanced Research Project Agency for Climate (ARPA-C). ARPA-C’s mission will be to develop cutting-edge research and technology across a range of issues from nuclear power to carbon capture technologies so that the U.S. can meet its 2050 target. However, experts have raised concerns about whether ARPA-C will serve the same purpose as the ARPA-Energy (ARPA-E), which already focuses on “transformational low-carbon energy technologies” through the Department of Energy (DOE). By 2025, the administration has also promised to establish legally binding emissions reductions requirements that would penalize emitters for exceeding yet-to-be-established thresholds and hold polluters accountable for impacts they have on local communities, particularly communities of color and those that are low-income.

To pay for the substantial cost of Biden’s ambitious climate agenda, particularly the proposed infrastructure bill, the Biden team proposes to reverse the Trump administration’s Tax Cuts and Jobs Act (TCJA), which slashed the corporate tax income rate from 35 percent to 21 percent. In an effort achieve bipartisan consensus, Biden has altered his initial proposal, which planned to raise the minimum corporate tax rate to 28 percent, and instead has offered to set the rate to 15 percent and an income tax increase on individuals with annual income above $400,000. According to the Institute on Taxation and Economic Policy, 55 corporations paid no federal taxes in 2020, resulting in $8.5 billion in forgone tax revenue. A recent ProPublica report found that some of the wealthiest individuals in the world, such as Amazon founder Jeff Bezos and Tesla founder Elon Musk, paid little in federal income taxes at various times over the past decade. Given its multifaceted goals of investing in infrastructure and supporting communities’ transitions from fossil fuels to green energy, among others, the administration has proposed to raise capital gains tax from 37 percent to 39.6 percent to compensate for the lost revenue. However, the Biden team must strike a balance between its climate agenda and its goals for economic recovery, and some analysts predict that should the administration raise the minimum corporate tax rate to 28 percent, it could reduce the national GDP by 1.62 percent in the long run. It is clear that climate change is playing a central role in the administration’s fiscal policies, with Treasury Secretary Janet Yellen calling climate change a tremendous risk to American financial stability and the global economy writ large. During a meeting with the Financial Stability and Oversight Council, Yellen notably requested that regulators improve the measurement and management of the economic impacts of global warming and climate-related risks as the Biden administration continues to pursue its climate agenda. The Securities and Exchange Commission (SEC) is likely to mandate greater disclosures from large investors concerning the climate change risk imbedded within their portfolios. Companies have advocated for the SEC to standardize how firms quantify their climate risk profiles to improve analytical comparisons between their assessments. In December 2020, Federal Reserve Chair Jerome Powell joined the Central Banks and Supervisors Network for Greening the Financial System, a group of 90 central banks working together to address climate change. In March 2021, the organization put forward proposals to the banks, such as instituting higher interest rates for lenders that rely on carbon-based industry.

President Biden is going beyond previous administrations, including the Obama Administration, to address climate change, committing resources and creating new positions within the federal government to address this critical policy area. Former President Obama acknowledged climate change as an “existential threat” through his Climate Action Plan (CAP), Executive Order 13653, and the Clean Power Plan (CPP). However, advocates criticized the administration’s approach, stating that Obama’s re-election goals limited his support for pro-climate policies during his first term. Still, the Obama administration played a crucial role in advancing both domestic climate policy and international collaboration to fight climate change. In contrast, President Trump called climate change a hoax, claiming that global warming was a “concept created by China in order to make U.S. manufacturing non-competitive.” In May 2021, the EPA released a report, which the Trump administration had blocked, finding that climate change is occurring more rapidly than was previously understood and affecting the U.S. in more dangerous and severe ways. During his administration, Trump took aggressive and widespread action to scale back measures aimed at fighting climate change, including withdrawing the U.S. from the Paris Agreement and relaxing fuel economy standards in various industries, all contributing to the U.S. backsliding on climate. According to the 2020 UN Emissions Gap report, although the U.S. still contributes the most emissions per capita in the world, over the last decade, U.S. emissions have dropped, while those of China, India, and Russia have continued to rise. The Biden administration has attributed this success to state and local governments that are driving emissions reduction, suggesting that despite opposition from the former administration, other leaders have stepped up their efforts to reduce emissions. There are conflicting accounts, however, about U.S. successes, as some scientists argue that while the U.S. contributed the most to the global drop in emissions (13 percent), this has been largely due to lockdown measures from the pandemic. Subsequent reports by the World Meteorological Organization (WMO) find that the pandemic did not slow climate warming and that actions by countries are necessary to effectively address the climate crisis.

President Biden’s call for a whole-of-government approach to climate change and the creation of new climate-focused positions within his administration, particularly on the National Security Council (NSC), elevates the issue of climate change unseen during previous administrations. Former Secretary of State John Kerry and former EPA Administrator Gina McCarthy are serving in critical new positions as U.S. Special Envoy for Climate and White House National Climate Advisor, respectively. McCarthy’s role is to ensure that all federal agencies are actively addressing climate change, with anticipated EPA action including imposing stricter regulations on emissions and working alongside the Securities and Exchange Commission (SEC) to require corporations to disclose financial risk from climate change. Her foreign affairs counterpart, Kerry, will hold a seat on the NSC and will work with countries to bolster their efforts on climate change. Substantive domestic action on climate is critical for Biden and Kerry to convince countries of U.S. climate leadership and commitment to the issue. As such, McCarthy’s and Kerry’s roles and their teams will be intertwined, and they must work in tandem to accomplish the administration’s climate goals.

Responsibility for Emissions Reduction is Global

In 2019, global emissions totaled 36.44 billion tons. According to the United Nations’ Intergovernmental Panel on Climate Change (IPPC), global net human-caused emission of carbon dioxide (CO₂) must fall by about 45 percent from 2010 levels by 2030 and reach net-zero by 2050 to prevent global warming from exceeding 1.5 degrees Celsius.

Global Carbon Dioxide Emissions by Region, 2019

Top 10 Global Carbon Dioxide Emitters, 2019

Note: Shown are national production-based emissions in 2019. Production-based emissions measure CO₂ produced domestically from fossil fuel combustion and cement, and they do not adjust for emissions embedded in trade (e.g., consumption-based emissions). Values may not sum to 100 percent due to rounding and exclusion of international travel data. Because of limitations in publicly available data, 2019 is the most current information on carbon dioxide emissions by region and country. Source: Global Carbon Project via Our World in Data

Key Challenges for the Biden Administration

Questions remain on U.S. commitment beyond Biden. Biden’s domestic climate policies are integral to his foreign policy as the administration seeks to lead the international community by example. However, concerns remain among allies and others about the U.S.’s commitment to the issue, especially after the Biden team’s first term, given that Trump reversed several of Obama’s climate policies and went so far as to deny the existence of global warming. Instituting a long-term policy beyond executive orders will be essential for Biden to assure allies that the U.S. will remain part of the global effort against climate change. Deep decarbonization measures are needed, particularly because climate experts are skeptical of whether pledges made by countries to date will be sufficient to prevent global temperatures from rising. But Congressional representatives who are reliant on fossil fuels in their districts and deniers of climate change remain formidable hurdles to this agenda.

Balancing U.S.-China cooperation and competition. Another core challenge will be to balance U.S.-China relations with respect to climate change and the rest of Biden’s foreign policy agenda. Despite the Biden team’s calls to treat climate as “a critical standalone issue,” the Chinese Foreign Ministry stated that climate issues cannot be separated from the two countries’ relationship. Indeed, U.S.-China relations have deteriorated, particularly under Trump, with technology and trade disputes between the countries mounting, and Biden criticizing Xi Jinping’s approach to human rights among other issues. Experts assert that China will use climate change as a bargaining chip to get Biden to accept its “irreconcilable” policies. However, unless the U.S. and China can balance competition and collaboration, scientists state that renewed climate cooperation would not be achieved, which would bring devastating climate-related impacts. Following a meeting between John Kerry and China Special Envoy for Climate Change Xie Zhenhua in mid-April 2021, China and the U.S. issued a joint statement addressing the climate crisis—a positive sign that U.S.-China cooperation may continue to address this critical policy area. 

Reviving confidence in science and staffing experts in climate-related agencies. Trump’s attacks on science and climate change initiatives have resulted in vacancies in leadership and science positions across the federal government. Scientists who conduct critical environmental research and enforcement within U.S. agencies have retired, quit, or moved to other organizations amid pressure from the Trump administration. There were more than 180 instances of political interference in science, and morale in the federal scientist community was at an all-time low between 2017 and 2021. The EPA had the biggest loss of talent, with 672 fewer scientists in 2020 than 2016, and the Department of Agriculture’s Economic Research Service and the National Institute of Food and Agriculture lost 75 percent of its employees. Other agencies, such as the U.S. Geological Survey, lost 150 scientists during this period, and the Fish and Wildlife Service lost 231 scientists. The Department of State also suffered from numerous vacant positions, including the Undersecretary for Economic Growth, Energy and the Environment, which is critical for the U.S.’s ability to address climate change and environmental issues abroad. According to former Secretary of State Mike Pompeo, “[a]t the State Department, there are too many holes, too many vacancies, too many unfilled positions. When that happens, everyone is stretched thin in the subject matter expertise that we need to deliver America’s diplomacy around the world.”

Legal obstacles to Biden’s climate agenda. While the global automotive companies like General Motors are working with Secretary of Transportation Peter Buttigieg and Secretary of Energy Jennifer Granholm to create new industry energy standards as they transition to eco-friendly vehicles, power plants are presenting a challenge to Biden’s climate ambitions. In 2016, the U.S. Supreme Court put a stay on the 2015 Clean Power Plan (CPP) designed to regulate emissions from power plants, effectively blocking the bedrock of Obama’s climate change policy. Although the recent D.C. Circuit court ruling indicates that there may be opportunities for Biden to create new regulatory guidelines, the stay is still in place, and it is likely that the Biden team will face legal challenges. Beyond regulations, Biden could advance his climate agenda through legislation from Congress, but the slim Democratic majority in the legislature and aforementioned resistance from some Republicans and other interests make the alternative similarly difficult. Commenters state that unless the legal or congressional challenges are resolved, it is difficult to see how the administration will meaningfully implement policies that will address power plant emissions.

A key domestic concern: Recovering lost jobs and supporting local economies.  Biden’s climate plan is aligned with his economic strategy, promising to create 10 million new jobs through investments in zero-carbon technologies and training programs that will support local communities in transitioning from fossil fuels to green energy. Despite the former Trump administration’s attitude toward climate change, the growth of the renewable energy sector continued unabated. From January through March 2021, over five gigawatts of solar capacity were added to the national grid, the largest three-month expansion in history. These trends suggest that previous records will continue to be surpassed throughout Biden’s term. Currently, about 6.7 million Americans are employed across energy sectors. Critics are concerned about whether the administration’s plans will be sufficient, given that for every direct job lost in a power plant or in mining, a community will lose, on average, four indirect jobs. But long-term projections reflect a steady decline in the use of coal, natural gas, and oil in the U.S. power grid, underscoring the need for transition assistance. Analysts estimate that by 2050, the coal industry in the U.S. will disappear, natural gas use will decrease by 75 percent, and oil use will decrease 95 percent. Clean energy jobs can be found in every U.S. state with the DOE projecting that the number of those jobs will outpace fossil fuel jobs by five to one, and this job creation will have indirect and induced economic benefits as well. In May 2021, the Department of the Interior approved the creation of the Vineyard Wind project, the first large-scale, offshore windfarm in the country, which is anticipated to create 3,600 new jobs. As Biden launches his strategy to tackle climate change, collaboration with state and municipal governments will be increasingly important to ensure that the administration’s economic and climate goals are met. State and local governments have tremendous authority over emissions, transportation, and infrastructure—key sectors that contribute the most to climate change.