Climate Regulations Under the Biden Administration: A Recap
With the recent announcements at COP27 of further additions to Biden’s environmental agenda, we wanted to provide a quick recap of all regulations and proposed regulations to date.
In today’s post, we will be providing a timeline of climate-related regulations under the Biden administration. We will also be doing a deeper dive into the farthest-reaching regulations. For any who are interested in a history of climate-related legislation prior to this administration, we published an overview in this post.
A Timeline
11/16/21 Signed into law the $1 trillion Infrastructure Investment and Jobs Act
8/16/2022 President Biden signed the Inflation Reduction Act
10/4/22 U.S. Financial Stability Oversight Council Launches Climate Risk Advisory Committee
11/11/22 Initiatives announced at COP 27
Federal Supplier Climate Risks and Resilience Proposed Rule requiring federal suppliers to disclose emissions and set climate targets
Announced $20B in new investment under the U.S. Methane Emissions Reduction Action Plan
Doubled the U.S. pledge to the Adaptation Fund to $100 million
Announced over $150 million in new support to accelerate the President’s Emergency Plan for Adaptation and Resilience (PREPARE) efforts across Africa
Launched a new initiative to support Egypt in deploying 10 GW of new wind and solar energy
Announced “Climate Finance +” initiative to support developing countries in issuing green bonds
Launched the Sustainable Banking Alliance to deepen developing countries’ sustainable financial markets
Launching a Climate Gender Equity Fund, an Indigenous Peoples Finance Access Facility, and new exchanges to empower youth across the world to be leaders in resilience and clean energy
11/16/2021: Infrastructure Investment and Jobs Act
Last year, on November 16th, President Biden signed the Infrastructure Investment and Jobs Act, which is legislation to modernize our transportation infrastructure. $1.2 Trillion in federal spending will be allocated over the next 5 years making it one of the most historic bills passed. Airports, bridges, roads, waterways, power grids, and drinking water are all industries that are expected to receive funding. The bill also allocates billions to energy transition projects including carbon removal technologies (see our carbon post for further details), hydrogen development, electrification and EVs, and energy storage. With the increase in funding, not thousands, but millions of jobs are expected to be created to support the vast number of projects. [1]
Source: EY
8/16/2022: The Inflation Reduction Act
By now we are assuming most people have heard of the Inflation Reduction Act, better known as the IRA, but in case you have not, this legislation focuses on expanded or extended tax credits and additional funding for the IRS. From an energy perspective, the IRA includes investments in a variety of clean energy programs including tax credits, offsets, and other climate-focused initiatives. For homeowners, it offers a variety of tax credits including those who install solar panels on their homes or upgrade certain appliances to be more energy efficient. Additionally, the legislation focused on creating clean energy jobs for millions, investments into zero-emission transportation, and focus on the acceleration of renewable manufacturing. Outside energy-focused investments, the IRA adds a 15% minimum corporate tax and a 1% fee on stock buybacks, expands Medicare benefits, and extends the Affordable Care Act subsidies until 2025. [2]
10/4/22: Climate Risk Advisory Committee
To support the identification and mitigating initiatives resulting from climate change, the US Financial Stability Oversight Council (FSCO) announced the launch of the Climate-Related Advisory Committee called CFRAC in October 2022. Members of the group include the professors, directors of climate at banks or asset managers, EPA representatives, and advisors to the ISSB. The first meeting is expected to be held in early 2023. [3]
11/11/2022: COP 27 Headlines
US Methane Emissions Reduction Action Plan
Methane reduction has been a hot topic over the past year with COP 26 shining the spotlight on it. It was last year that over 100 companies globally committed to reducing their emissions to support the overall goal of a 30% reduction by 2030 (from the 2020 level). Continuing to push methane to the forefront of discussion, it was once again in the spotlight but it was the US responsible for it. During COP 27, the Biden administration announced their plan to pledge $20B to tackle methane emissions. Funding will come from both the Bipartisan Infrastructure Law and the Inflation Reduction Act. Key areas of focus to reduce emissions will be capping orphan wells and reclamation on abandoned mines. [4]
For those who may not be familiar, orphan wells are wells that were simply abandoned by the operator and if the wells are not plugged correctly methane from deep underground can seep out. It is estimated that there are thousands of these across the US alone. Methane is also a common gas found in underground coal mines. According to the EPA, “Methane (CH4) emissions from coal mining and abandoned coal mines accounted for about 8% of total U.S. methane emissions in 2019. It was the fifth-largest methane-emitting sector, based on the Inventory of U.S. Greenhouse Gas Emissions and Sinks: 1990-2019.”
Federal Supplier Climate Risks and Resilience Proposed Rule
Continuing with Biden's promise for the US to become a climate leader, he recently proposed that all federal suppliers be required to report emissions. This is just one component of his Federal Sustainability Plan which focused on a range of goals to deliver an emissions reduction pathway consistent with reducing GHGs. For suppliers, the legislation requires major federal contractors to publicly report their annual corporate-level emissions and then set targets to reduce them. Climate risks and vulnerabilities that may affect their ability to deliver goods and services are also being asked to be disclosed annually. This proposal follows Biden's launch of the Buy Clean Initiative for low-carbon materials back in February 2022. To support this initiative, Biden established the Federal Buy Clean Initiative and task Force that will promote construction materials with lower emissions and pollutants across their life cycles including each stage of the manufacturing process. [5]
Sustainable Banking Alliance
During COP 27, the UN issued its first progress report on the Net Zero Bank Alliance. This coalition brought together a global group of banks (120 banks) that represented 40% of global banking assets.[6] These banks are committed to aligning their lending and investments with net-zero emissions by 2050. During the Finance Day at COP 27, the progress report detailed intermediate 2030 decarbonization targets from over 60 banks and demonstrated the first signs of progression since launching last year. As stated in the progress report, the banking members have delivered on their commitments. 90% who were due to submit targets did so and a number of them submitted their targets before the proposed deadline. According to the report, over 90% of the responding members also have in place a sectoral policy either for O&G or coal, to set emission reduction targets in these industries. In an analysis of 62 member banks:
66% of respondents report having set a long-term portfolio target for achievement by 2050.
32% of respondents report having set portfolio-wide intermediate targets for achievement by 2030
94% of respondents have set intermediate sector targets for 2030 or sooner[7]
US Pledge to PREPARE Action Plan
The PREPARE (President’s Emergency Plan for Adaptation and Resilience) Action Plan was established last year with the overarching message that Information is Power. The US government launched PREPARE to address the increasing and devastating impacts of climate to vulnerable communities around the world and to help manage the impacts it brings. PREPARE addresses long-standing gaps in adoption that disproportionately affect women, youth, Indigenous Peoples, and low-income and marginalized groups that have historically been excluded from adaptation planning and action, yet often face the greatest risks. [8] There are several key areas of concern addressed in the proposal including water security, infrastructure that considers climate conditions, access to healthcare including inequality and population-scale health risks, food security, and displacement & migration as a result of weather conditions or socioeconomic conditions. Most recently, Biden announced $150 Million to support the adoption and acceleration of the initiative. [9]
US Announces Strategies to Advance Women & Girls Climate Action
At COP 27, there were a variety of strategies presented to continue to advance women's inclusion in climate action. The USAID announced the creation of a new Climate Gender Equity Fund which will leverage private sector funding to advance gender-equitable climate action and scale programs in place. They are dedicating more than $21 million which surpasses their initial $14 million pledge made at COP 26. The fund will help scale access to green jobs, advance women's economic security through promoting women’s land rights, and partner with the Department of Energy. The fund also promotes a variety of programs including Climate Change and Women in STEM in the Indo-Pacific Region, supports Inclusive Action for Climate Change in South and Central Asia, and invests in the Egyptian Pioneers Program, along with many more initiatives. [10]
Hot Tea
To say there was a lot happening in the tech world this week is an understatement! From crypto crashes, layoffs, innovation, and cyber attacks, here's the tech tea!
Tesla drivers will be able to make Zoom calls from their car (LINK)
FTX Crash: Timeline, Fallout, and What Investors Should Know (LINK)
Hive ransomware actors have extorted over $100M from victims, says FBI (LINK)
Waves Of Tech Layoffs — Which Tech Companies Are Cutting Their Workforce And Why? (LINK)
Electric vehicle makers burning cash, slammed by sky-high costs (LINK)
Sources
[1] https://www.esgtoday.com/biden-signs-infrastructure-deal-energy-transition-investment-highlights/
[2] https://www.usatoday.com/story/news/2022/09/23/inflation-reduction-act-2022-explained/8082806001/
[3] https://home.treasury.gov/news/press-releases/jy0987
[5] https://www.sustainability.gov/federalsustainabilityplan/
[6] https://www.unepfi.org/net-zero-banking/
[7] https://www.unepfi.org/wordpress/wp-content/uploads/2022/11/NZBA-Progress-Report_final-1.pdf
[8] https://www.whitehouse.gov/wp-content/uploads/2022/09/PREPARE-Action-Plan.pdf