The Resilience of the Biden Administration’s Climate Policy

Executive measures and climate regulation

Biden initially relied on executive measures to achieve the new targets. In the “Federal Sustainability Plan”, he instructed the fed­eral authorities to take into account new sus­tainability criteria in government pro­curement. The intention is to use the immense purchasing power of the federal government to boost the production of green steel, low-carbon building materials and electric vehicles (EVs), among other things. For their part, government bodies such as the Environmental Protection Agency (EPA) have introduced new regu­lations that cover coal-fired power plants and new gas-fired power plants, for exam­ple. These measures are designed to achieve a 90 percent reduction in emissions from coal-fired power plants by 2032; thereafter it will be possible to operate coal-fired power plants and newly constructed gas-fired power plants only if expensive carbon capture and storage (CCS) technology is used. In the transportation sector, the EPA finalized stricter efficiency standards for various types of vehicle with the aim of shifting the market towards zero-emission vehicles by 2032. And it has set strict limits for methane emissions in oil and natural gas production, which is a very important step as the US is the world’s largest oil and gas producer. In July, however, a federal district court lifted a temporary ban on the approval of new export terminals for liquefied natural gas (LNG), arguing that the measure had no legal basis.

Climate legislation

At the same time, Biden has enjoyed un­precedented success in pushing through climate-related legislation. In his first year in office, the Infrastructure Investment and Jobs Act was passed with bipartisan sup­port. Among other things, the act provides for some US$58 billion in new expenditures for the decarbonization of the electricity sector and US$7.5 billion for the expansion of the charging infrastructure for electromobility.

In August 2022, Biden signed into law the CHIPS and Science Act, which also enjoyed bipartisan support. The legislation provides for expenditures of US$280 billion during the period 2023–2027 to promote semiconductor production and research. Semiconductors are a key component of climate-friendly energy technologies such as EVs and renewable energies.

But the Biden administration’s biggest success has been the passage of landmark climate legislation – the Inflation Reduc­tion Act (IRA). The 2022 law, which passed without a single vote from the Republican Party, provides for an unprecedented US$370 billion in funding for the energy transition and climate transformation. Funds are earmarked for technologies such as renewable energies, hydrogen, EVs, CCS, and carbon capture and utilization (CCU); and they are to be disbursed over 10 years in the form of tax incentives, loans, loan guarantees and grants. There is no spending cap and the fiscal cost has since been esti­mated at US$1.2 trillion owing to increased demand for clean technologies, especially EVs. Calculations show that the climate law alone can reduce emissions by 32–42 per­cent by 2030, bringing the US significantly closer to its climate target.

All three laws mentioned above include local content clauses: that is, the production of raw materials and components with­in the US is explicitly promoted. The aim is to create domestic jobs and increase the resilience of supply chains. Another impor­tant goal is to reduce the country’s enor­mous dependence on imports from China in some green technologies.

The three laws significantly improve the conditions for reducing emissions and are already having an economic impact. Invest­ment in the production of green energy technologies, such as zero-emission vehicles and electrolysers, has risen sharply since the passage of the IRA. A particular success story is battery production: annual new in­vestments in this sector have almost tripled year on year to around US$22 billion. And another sector that is flourishing is semi­conductors: no fewer than 70 semiconductor factories are currently under construction in the states of Arizona and Texas alone.

While the IRA has attracted a great deal of international attention since its passage, Americans seem to know little about it: surveys from the summer of 2023 showed that 70 percent of respondents in the US were barely aware of the legislation. If this remains the case, it will be difficult for the Democratic Party to capitalize on the suc­cess to date of the IRA during the remain­der of the election campaign.

Project 2025: Climate agenda of the conservative think tanks

Even if Trump’s climate and energy policy statements are as outlandish as ever, con­servative think tanks have already planned in detail how to reverse what they regard as extreme climate policy driven by left-wing ideology. “Project 2025” brings together conservative think tanks under the leader­ship of the Heritage Foundation to prepare for the next Republican president’s term in office. Their political agenda is summarized in the “Mandate for Leadership”. Many of the chapters are written by members of the previous administration, which suggests that Trump would adopt many of the pro­posals.

With regard to climate protection, the think tanks start from the premise that the political left is exaggerating the effects of climate change. This reflects strong political polarization in the US over climate protec­tion. According to the “Mandate”, climate protection damages the US economy and economic growth is to be achieved by fur­ther expanding the production of fossil fuels.

Accordingly, the authors of the “Man­date” focus on eliminating the policy objec­tive of climate protection from the work of all executive bodies. This is to be achieved through restructuring, realigning the func­tions of the institutions, cutting funds and revoking executive orders and regulations. At the same time, those executive orders issued during the Trump Presidency are to be reinstated.

For its part, the Department of Energy is to work towards “restoring” US energy dominance. The focus is to be on promoting fossil fuels – by simplifying approval pro­cedures for LNG export terminals and in­creasing the sale of oil and gas licences, among other measures. Renewable energies and energy efficiency, meanwhile, are to take a back seat: those department offices established to promote them are to be abol­ished. The authors of the “Mandate” have also focused on the EPA, which would con­centrate solely on environmental protection and public health and, if possible, be stripped of the legal basis for regulating greenhouse gas emissions. Moreover, scientific advisory bodies working in the field of climate pro­tection are to be reformed and funding for climate research suspended, at least tem­porarily. Finally, the “Mandate” provides for the US withdrawing from both the Paris Agreement and the UN Framework Conven­tion on Climate Change.

It is also planned that the “Mandate” be given more force through the establishment of a new category of public servant. Employees in the “Schedule F” category would be political appointees and thus could be more easily dismissed than regular public serv­ants. It is estimated that if these plans were realised, there would be at least 50,000 po­litically appointed public servants instead of the current 4,000. In this way, Trump could create a layer of loyal supporters in all government bodies who support his agenda.

The Conservative Climate Caucus

There are more grounds for optimism from the agenda of the Conservative Cli­mate Caucus, a steadily growing coalition of a full third of Republican members of the House of Representatives who fundamentally agree that climate change needs to be addressed. The Caucus sees fossil fuels in com­bination with “innovative technologies” as a key component in reducing global green­house gas emissions. Thus, while fos­sil fuels are still to be promoted, emissions should be reduced through technologies such as CCS. This provides for at least a minimum consensus with the Democratic Party on climate policy.

IRA in the crossfire

It would be difficult to revoke the IRA – for both institutional and strategic reasons. In order to repeal a law, a new legislative procedure is required and, as a rule, a majority of 60 votes in the Senate. But it is forecast that if the Republican Party were to win a majority in the Senate in the Novem­ber elections, the margin of victory would be narrower than that. In theory, there could be a way around the legislative re­quirement if a reconciliation process were to be adopted with the consent of both houses of Congress. This rare procedure – which was, in fact, used for the passage of the IRA – requires only 51 votes in the Senate for a law to be approved.

However, Trump could significantly weaken the IRA. He could slow down pro­cesses – for example, by temporarily halt­ing the work of the Department of Energy’s Loan Programs Office (LPO), which manages loans and loan guarantees under the IRA. Indeed, he did just that during his first term in office. At the same time, Trump could change the Treasury Department guide­lines for awarding tax credits and grants for green technologies. Those elements supported by both parties – including the promotion of biofuels, nuclear energy and CCS – would likely remain unaffected. But subsidies and tax credits for EVs are particu­larly unpopular among the Republicans. Should the guidelines for these measures change, there could be a negative impact on the EV market ramp-up, as tax credits for the purchase of such vehicles and tax incentives for manufacturers are currently a key driver of growing EV sales in the US. Furthermore, the tax incentives for wind and solar power could also be targeted by a Trump administration, significantly slowing down the required capacity expansion.

On the strategic side, repealing the IRA would be a political challenge, as the law is helping stimulate economic growth and is estimated to have created more than 100,000 new jobs over just two years. More­over, the funds generated by the law flow mainly to Republican states, even though the IRA did not receive a single Republican vote. The states could once again provide some stability to US climate policy – at least in theory.

US states as (potential) anchor of stability

Indeed, many Republican states likely con­sider a repeal of the IRA undesirable, as they have benefited disproportionately from the surge in investment in green tech­nologies since the passage of the law. There are two main reasons for this. First, the environmental justice provisions of Biden’s climate policy as a whole: “Justice40” stipu­lates that 40 percent of state expenditures on climate transformation must benefit dis­advantaged communities, which include (for­mer) coal mining districts, areas in which oil and gas production takes place, and com­munities affected by structural change and high unemployment. Such communities are predominantly Republican; and projects implemented there are eligible for addi­tional tax credits. Second, many of the large states that have the potential to expand wind and solar energy are Republican-led.

As for the US states in general, some are seen as long-standing climate policy front­runners, as are many of the larger cities in the country. During Donald Trump’s term in office, it became clear that it is not only traditional pioneers such as California and New York that are particularly active in climate policy; conservative states such as Louisiana have taken up the fight against climate change, too. However, many US states have done nothing whatsoever in terms of climate policy. It is here that the legislation passed by the Biden adminis­tration may have encouraged at least some progress: the Infrastructure Act, for exam­ple, required all 50 states to submit plans for the expansion of EV charging infrastructure, while the IRA offered funding for drawing up a Priority Climate Action Plan (PCAP). Besides an inventory of greenhouse gas emissions, those plans must include proposals for incentives to reduce emissions in various sectors. Almost every state has come up with an action plan – many for the first time ever.