In September 2020, a Climate Clock counting down the time left to take action to prevent the irreversible effects of global warming was installed in New York. The clock showed six years remaining on the day Biden took office in January 2021, highlighting the need for a rapid change in U.S. policy. In response, President Biden mobilized his entire Administration to take on the challenge in a strategic and integrated way.
On Earth day, the U.S. promised to cut its carbon emissions by at least 50% by 2030 based on 2005 levels. This is in addition to its commitment to transitioning to a carbon-free power sector by 2035 and a net-zero economy by 2050. We believe this will generate a huge and sustained tailwind of change that will sweep across all industries, creating opportunities for businesses to innovate. To capitalize on this opportunity, we are launching the Purpose Global Climate Opportunities Fund on April 27, 2021, to support the necessary innovation and capture these tailwinds for our investors.
The depth and breadth of commitment on the part of the new Administration encompasses a return to international agreements, a massive infrastructure plan with the green energy transition at its center, and perhaps most importantly, directives that signal an entirely new attitude toward climate change as a central policy priority across all government portfolios and regulations enforcement.
Below, we have outlined key highlights of the Biden Administration’s commitments to climate change.
International Climate Change Commitments
- Rejoin the Paris Climate Accord: Biden confirmed that the U.S. will rejoin the landmark agreement and work towards achieving its goals. This is a significant step in reversing the climate policies of the last four years, sending a strong message that the U.S. is prepared to cooperate in the fight against climate change and reclaim the leadership role it once had.
- Address the cost of carbon: Biden created a working group that will determine the price of carbon by 2022 and is raising the price from a Trump low of USD 8 per ton to USD 51 per ton. This number, which will significantly impact policies regulating industry and energy production, could be raised to USD 125.
- Establish climate considerations as an essential element of U.S. foreign policy and national security: Biden created a new administrative position, “U.S. Special Presidential Envoy for Climate”, in the National Security Council. His appointee, John Kerry is expected to play an international role in centering climate change in foreign policy. Biden also directed National Security, the State Department, and all agencies to develop strategies for integrating climate considerations into their international agendas.
- Establish National Climate Task Force to address greenhouse gases: The task force will bring together leaders from across 21 federal agencies and departments to enable a whole-of-government approach to combatting the climate crisis.
Energy Sector Commitments
- Direct all federal agencies to undo Trump’s policies that enable environmental degradation:One of Biden’s first initiatives, the “Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” explicitly directs all heads of federal departments and agencies to ensure their orders, regulations, and policies center on public health, the environment, and a national effort to reduce greenhouse gas (GHG) emissions.
- Cancel the Keystone XL Pipeline: Biden made the controversial decision to rescind the Keystone XL Pipeline permit even though it would cost jobs, jeopardize the critically important US-Canada relationship, and disrupt the U.S.’s entire oil supply chain. Biden’s decision to cancel the pipeline despite these challenges, demonstrates his commitment and tenaciousness in addressing climate change.
- Ban oil, coal, and gas leases and permits on U.S. land and waters: Initially, this encompassed a 60-day suspension of new oil and gas leasing and drilling permits on U.S. lands and waters and blocked the approval of new mining plans. However, Biden has since been trying to make this suspension permanent.
- Expand opportunities for the offshore wind industry: The Administration announced it is pushing forward on a massive expansion of offshore wind development off the coast of Long Island which will generate more than 25,000 jobs. The Administration also established a target of generating 30 gigawatts of offshore wind energy by 2030.
- The $2 trillion climate-focused infrastructure plan: USD 2 trillion will go towards building clean energy infrastructure over the next eight years. It includes:
- $174 billion to boost the electric car market and install half a million charging stations across the country by 2030.
- $115 million for modernizing 20,000 miles of highways and roads.
- $85 billion toward public transit.
- $100 billion to update the nation’s electric grid.
- $35 billion investment in research and climate change technology to create green energy jobs like carbon capture/storage and offshore wind.
Conservation Commitments
- Temporarily halt oil and gas leasing in the Arctic National Wildlife Refuge: Though the Republican Party forced fossil fuel drilling in this area through its 2017 tax bill, Biden is delaying the process as much as possible through an executive order.
- Protect 30% of public lands and waters by 2030: Biden launched a process for stakeholder engagement from agricultural and forest landowners, fishermen, Tribes, States, Territories, local officials, and others, to identify strategies that will result in broad participation.
- Establish a Civilian Climate Corps: Biden formally established the initiative to put a new generation of Americans to work conserving and restoring public lands and waters, increasing reforestation, increasing carbon sequestration in the agricultural sector, protecting biodiversity, improving access to recreation, and addressing the changing climate.
Justice Commitments
- Create a group for fossil fuel workers: This Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization will be co-chaired by the National Climate Advisor and the Director of the National Economic Council. It will develop a plan to invest in coal, oil, and gas communities that will likely suffer economically in the transition to clean energy. This group should help mitigate concerns regarding job loss that Biden’s opponents have vehemently voiced.
- Begin development of the Climate and Environmental Justice Screening Tool: Biden will build on the EPA’s EJSCREEN tool that allows you to search your zip code to identify nearby polluters.
- Direct the Agriculture Secretary to improve agricultural practices: Biden is directing the Secretary of Agriculture to collect input from key stakeholders about how to reduce GHG emissions from current food production practices. The goal is to produce verifiable carbon reductions and sequestrations and create new sources of income and jobs.
- Punish a dirty refinery in St. Croix: The EPA withdrew a key permit for Limetree Bay Refining, a polluting oil refinery in St. Croix, U.S. Virgin Islands. This is the Administration’s most significant step yet in a campaign to ensure environmental justice. While it won’t immediately shut down the refinery, this permit revocation will help better regulate the facility and signals a general posture shift around regulations enforcement.
The scale and speed that the Biden Administration has taken to the fight against climate change will leave no industry untouched as business’ race to adapt and innovate. While the Purpose Global Climate Opportunities Fund is not bound to any of the Biden Administration’s priorities, it seeks to take substantive measures towards a climate-conscious approach to investing by focusing on companies driving toward similar goals. The fund will go beyond filtering by ESG data and use active management to capitalize on these opportunities by investing in game-changing green technologies and the transitional players that will emerge as leaders between today and net-zero.
For more information on sustainable investing, take a look at our post on capitalizing on carbon neutrality and our ESG diary series where we define the value (and limits) of ESG integration and share five things we’ve learned about our ESG approach.
— Claire Vaughan is a Product Analyst at Purpose Investments
Sources:
“Executive Order on Protecting Public Health and the Environment and Restoring Science to Tackle the Climate Crisis,” The White House, January 2021: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-environment-and-restoring-science-to-tackle-climate-crisis/
“FACT SHEET: President Biden Takes Executive Actions to Tackle the Climate Crisis at Home and Abroad, Create Jobs, and Restore Scientific Integrity Across Federal Government,” The White House, January 2021: https://www.whitehouse.gov/briefing-room/statements-releases/2021/01/27/fact-sheet-president-biden-takes-executive-actions-to-tackle-the-climate-crisis-at-home-and-abroad-create-jobs-and-restore-scientific-integrity-across-federal-government/
‘Your Complete Guide to Biden on Climate,” Atmos, April 2021: https://atmos.earth/joe-biden-climate-policy-laws-list/
“Biden signals radical shift from Trump era with executive orders on climate change,” The Guardian, January 2021: https://www.theguardian.com/us-news/2021/jan/27/joe-biden-climate-change-executive-orders
“Biden plans to fight climate change in a way no U.S. president has done before,” The Conservation, January 2021: https://theconversation.com/biden-plans-to-fight-climate-change-in-a-way-no-u-s-president-has-done-before-152419
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