1. BIDEN ADMINISTRATION MAKEUP SIGNALS A WHOLE OF GOVERNMENT APPROACH TO CLIMATE
Greens Groups Look To Exert Influence In Biden Administration In Traditional Energy Positions And Beyond. As President-elect Biden began the process of selecting his senior White House staff and Cabinet nominees, environmental groups were assessing potential appointees across all parts of the government through green lenses. In October, we wrote about how pressure from environmentalists could pose challenges for a Biden Administration’s climate goals by blocking prospective appointees who have the knowledge and experience to achieve those goals over their corporate ties. Now, as some environmental groups push climate purity tests, division has arisen amongst the groups about how to best exercise their influence. Still, it is clear that expectations from environmentalists are playing a significant role in influencing the makeup of all parts of a Biden Administration. In November, the Stop The Money Pipeline Coalition wrote to the President-elect calling on him to “ensure that all financial-sector appointees to your administration are fully vetted regarding their commitment to shifting at full speed into economic principles and practices which completely support renewable energy and fully divest from fossil fuels.” Biden’s selection of Michael Regan as EPA Administrator-designate, instead of the presumed frontrunner Mary Nichols, shows how much influence environmental advocates are already wielding in Biden world. As Biden continues to fill out his government, expect that influence to extend throughout the incoming administration.
Biden’s Early Nominees Show “There Is Literally Something For Every Agency To Do” On Climate. As Biden continues to look to environmental activists to build his government, even pulling from their ranks, it is increasingly clear Biden will take a whole of government approach to climate issues. Biden’s recent appointment of former Secretary of State John Kerry as his climate envoy will add significant environmental focus to the State Department and National Security Council. Xavier Becerra, Biden’s choice for the Department of Health and Human Services, created the first “environmental justice bureau” within California’s Department of Justice and can be expected to be similarly environmentally engaged at HHS. Biden’s nominee for USDA, former Iowa Governor Tom Vilsack, is also expected to play a role in the administration’s climate policy, including in plans to ban new fracking permits on federal lands. Reportedly, the USDA’s role in climate policy made the job more appealing to Vilsack. Biden’s selection of Pete Buttigieg as Secretary of Transportation further cements that “the Transportation Department under Mr. Biden is expected to play a newly climate-centric role,” given Buttigieg’s campaign commitments on vehicle emission standards and reaching carbon neutrality by 2050. As Evergreen Action’s Sam Ricketts noted, on climate policy, “there is literally something for every agency to do” in a Biden administration. With Biden’s selection of NRDC president Gina McCarthy as domestic climate coordinator, the President-elect gets an ambitious climate regulator with expertise in the workings of the federal government, who has proven unafraid to push for aggressive regulatory action, with or without Congressional direction.
Biden’s Environmental Staffing Indicates Significant Access For Activists. Gina McCarthy, the President and CEO of NRDC, won’t be the only green activist staffing Biden’s Energy and Environmental posts. Biden’s EPA transition team is being led by Patrice Simms, an attorney with Earthjustice, “which has filed over 100 lawsuits against President Donald Trump’s administration.” Michael Regan previously led the Environmental Defense Fund’s climate and clean energy work, and Brenda Mallory, Biden’s pick to head the White House Council on Environmental Quality (CEQ), is currently the Director of Regulatory Policy at the Southern Environmental Law Center. As the President-elect continues to fill out the agencies most directly in charge of energy and environmental regulations, it is increasingly clear climate activists will have direct access to some of Biden’s most senior advisors and cabinet officials.
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2. AIR POLLUTION AND FENCLINE ACTIVISM WILL TAKE ON AN INCREASINGLY PROMINENT ROLE IN INFRASTRUCTURE PERMITTING
Fenceline Opponents Of Infrastructure Are Increasingly Citing Environmental Justice Concerns When Opposing Air Permits. More and more, activists are referencing environmental justice (EJ) concerns when fighting air permits for infrastructure development. Local opponents of infrastructure development, often supported by large national environmental groups, have been publicly fighting air permits citing EJ concerns across the country. In Louisiana, a judge recently delayed a permit for construction of a plastics plant, telling the state Department of Environmental Quality and company lawyers that updated “air permits must have a complete EJ analysis.” In New Mexico, two attorneys with the New Mexico Environmental Law Center are opposing air quality permits for an asphalt plant citing EJ concerns. In New York, opponents of a power plant along the Hudson river are pointing to EJ provisions in the state’s recently passed Climate Leadership and Community Protection Act, and their efforts are being amplified by national organizations like Food & Water Watch.
With EJ Featuring More Prominently In Permitting Fights, Green Groups Look To Regulators And Legislators For Codification. As New York activists cite the EJ provisions in the state’s new climate law, across the country, green groups are lobbying for similar provisions to be included at the state and national level. In September, New Jersey Governor Phil Murphy signed legislation to “require mandatory permit denials if an environmental justice analysis determines a new facility will have a disproportionately negative impact on overburdened communities.” Highlighting the legislation, the Sierra Club New Jersey chapter criticized Governor Murphy for allowing two Newark industrial facilities to continue with the permitting process. At the national level, the NRDC recently called for the Biden EPA to address EJ concerns by “vigorously control[ing] air pollution from industrial facilities, freight, heavy-duty trucks, fleets, ocean going vessels and locomotives.” NRDC’s advocacy comes with claims that the COVID-19 pandemic has most impacted “highly segregated and polluted communities.” Such health claims will likely be highlighted in upcoming calls for regulating emissions including methane and ethylene oxide, and, befitting the expected whole of government approach to climate issues, Transportation Secretary-designate Pete Buttigieg has pledged scrutiny on urban highways over EJ concerns, tweeting that the Administration “will make righting these wrongs an imperative.
3. NATURAL GAS’S FUTURE IS INCREASINGLY UNCLEAR, AT HOME AND ABROAD
As The Biden Administration Is Inaugurated, Natural Gas Opponents Have Growing Momentum. The fight over natural gas bans and electrification, which swept across the nation in 2020, is set to gain more ground in the new year. In Massachusetts, state lawmakers have passed legislation that could clear the path for local gas bans in the state. In Washington, legislation developed by Governor Jay Inslee “would require all new buildings in Washington to be zero-carbon by 2030 and seek to eliminate fossil fuel consumption in existing buildings by 2050.” Beyond local building electrification efforts, across the country opponents of natural gas have fought new infrastructure development, even when it would reduce existing emission levels. Among other places, such fights have arisen in Newburgh, New York, at Ohio State University, and in North and South Carolina, where Sierra Club has criticized Duke Energy plans to replace coal burning with gas. Opponents of gas infrastructure will have an ally in President Biden, who supports a 100% clean grid in 15 years, and during the campaign supported “direct cash rebates and low-cost financing to upgrade and electrify home appliances.” Biden’s Department of Energy could also expedite electrification efforts without Congress’s help by updating existing building and appliance efficiency standards.
As The EU Advances Its Green Deal, The Future Of LNG In Europe Is Clouded. As Europe continues to push for a Green Deal that will “impose wrenching change on the EU,” the future of American LNG exports to the continent is rapidly growing cloudier. In November, French power company Engie “halted negotiations on a multibillion dollar contract to import U.S. liquified natural gas.” Despite the State Department advocating for the deal, the French government ultimately walked away from the proposal due to “concerns that U.S. natural gas was too dirty.” The deals cancellation is cause for concern that Europe’s climate aspirations might hamper future exports of American LNG. These concerns are amplified by American green groups’ opposition to future LNG exports, and the opacity of the incoming Biden Administration’s views.
These Anti-Fossil Fuel Efforts Comes As More Businesses Are Beginning To Question The Path To Climate Goals As Global Economy Struggles To Recover From COVID-19. As local gas bans spread across California, the California Restaurant Association (CRA) continued its legal fight against the city of Berkeley’s gas ban, gaining support from national trade associations including the National Association of Homebuilders, the National Association of Manufacturers, the Air Conditioning, Heating and Refrigeration Institute, and the Hearth, Patio & Barbecue Association. Similarly, the local Golden Gate Restaurant Association (GGRA), which has previously supported surcharges meant to help fight climate change, in November, opposed a gas ban in San Francisco, citing the impact on small businesses. Outside of the US, two of the UK’s most famous architecture firms created a splash in December when they exited a pledge to reduce the architecture and construction industry’s emissions by nearly 40%. Foster + Partners and Zaha Hadid Architects both withdrew from Architects Declare, apparently over a disagreement about building lucrative airport projects and “their contribution to carbon-heavy international travel.” As the global economy works to recover from the COVID-19 pandemic, more businesses will begin to weigh the feasibility of both self-imposed and statutory climate goals, and the use of natural gas is likely to remain at the center of many of these conversations.
4. FINANCIAL REGULATORY FIGHTS OVER FOSSIL FUELS WILL TAKE CENTER STAGE IN 2021
Financial Regulators Continue Engaging On Climate Issue As Biden Administration Takes Shape. In October we wrote about the trend of increasing climate scrutiny from financial regulators and the potential for more financial regulation of the energy industry. In November, the Office of the Comptroller of the Currency (OCC) advanced a rule seemingly intended to discourage such efforts. The rule would prohibit large U.S. banks from refusing to lend to entire categories of lawful businesses, such as oil and gas, simply because they might be controversial or out of current public favor. Elsewhere, however, financial pressure on fossil fuels continued as New York Comptroller Tom DiNapoli announced in December a “target of getting the state’s $226 billion pension fund’s portfolio to net-zero emissions by 2040.” The Federal Reserve also made climate headlines in December with its decision to join a “three-year-old network of central banks working to manage climate-related risks to the financial system.” The decision signals the Fed “may get more active [on climate] in other ways, especially as incoming President Joe Biden makes nominations to the board.”
Biden Administration Set To Increase Financial Scrutiny On Fossil Fuels As Industry Promotes Stronger ESG Standards. As the Fed signals increased financial scrutiny of fossil fuels, the Biden Administration has indicated it is also likely to take regulatory action to add financial pressure to fossil fuels. During the campaign, Biden’s climate plan included a pledge to require “public companies to disclose climate risks and the greenhouse gas emissions in their operations and supply chains.” As the new Congress begins, Congressional Democrats will push for similar regulations on the banking industry with calls for the Biden Administration to force “lenders to abide by disclosure rules and stress tests to make sure they aren’t the source of a new crisis.” Congressional Democrats may have found their champion in Janet Yellen, Biden’s nominee for Treasury Secretary, who is a supporter of a carbon tax and seems set to bring Treasury’s clout into the climate debate. With federal and state governments set to take more aggressive action in the area, industry has already begun to show how it can engage productively on such issues. In December, the Energy Infrastructure Council (EIC), which represents companies that develop and operate energy infrastructure, “released the first-ever Midstream ESG Reporting Template,” setting an early example for how energy firms can proactively influence the conversation and inform investors regarding their sustainability initiatives.
5. WILL BEZOS SURPASS BLOOMBERG AS CLIMATE ACTIVISM’S BIGGEST BENEFACTOR IN 2021?
In 2020, Bezos Entered The Climate Philanthropy Mainstream, And 2021 Could Make Him Its Largest Benefactor, Fueling Energy Activism To Even More Aggressive Levels. In February 2020, Amazon founder Jeff Bezos announced the launch of a new group, Bezos Earth Fund, which he said would provide $10 billion for “scientists, activists, NGOs – any effort that offers a real possibility to help preserve and protect the natural world.” The announcement immediately places Bezos at the level of long-time climate activism funder Michael Bloomberg, whose funding for Beyond Coal, Beyond Carbon, and other such initiatives have totaled more than $150 million, with $500 million more pledged through 2022. In November 2020, Bezos revealed the first round of organizations receiving funding from Bezos Earth Fund. While The Atlantic noted, “The fund portended a revolution,” the first round of giving left critics are wondering if Bezos played it too safe, as the first round of Earth Fund disbursements largely went to the most established and well-funded environmental organizations, such as ClimateWorks, Energy Foundation, Environmental Defense Fund, Natural Resources Defense Council, and the Rocky Mountain Institute. In Bezos’ defense, Daniel Firger, who oversaw billionaire Mike Bloomberg’s climate philanthropy, noted, “It’s hard to write an eight-figure check to any but the biggest, most established grantees.” Given that reality, as Bezos looks to dole out the next round of Earth Fund donations in 2021, he could quickly surpass Michael Bloomberg as environmental activism’s leading benefactor, and the beneficiaries are likely to be the oil and gas industry’s already well-established detractors.