Energy Experts React: 2020 U.S. Election

U.S. International Climate Leadership

Rachel Posner Ross
Adjunct Fellow (Non-Resident)
Energy Security and Climate Change Program

The results of this election provide a clear mandate to the incoming Biden-Harris administration to reestablish the United States as a global climate leader. Throughout his campaign, President-elect Biden highlighted climate change as one of his top four priorities and committed to take bold steps to address the climate crisis at home and abroad. And the administration will have the public on its side, as the majority of registered voters consider climate change as an important factor influencing their voting decisions, and two-thirds of U.S. adults believe the federal government is doing too little to reduce the effects of climate change. In addition, the international community has high expectations for renewed U.S. climate leadership, and numerous heads of state have already publicly expressed their intent to collaborate with the president-elect to address the climate crisis.

To meet this calling for U.S. climate leadership and to advance U.S. economic and national security interests, the Biden-Harris administration will need to go far beyond rejoining the Paris Agreement. A scaled-up international assistance program on climate and clean energy is critical for the United States to avoid the harmful impacts of future warming from developing country emissions and to promote stability in strategically important geographies overseas. These investments would also complement domestic initiatives, such as a national energy innovation mission, by spurring American job growth and building new market demand for U.S. clean energy technologies.

The Obama-era Global Climate Change Initiative (GCCI), which invested over $15 billion for clean energy, adaptation, and sustainable landscapes activities between 2010 and 2015, provides an important precedent for climate finance. But to deliver sufficient resources for the magnitude of the current climate crisis and to reestablish the United States’ reputation on the world stage, the Biden-Harris administration will need to exceed the scale of GCCI. This would entail dramatic increases to bilateral climate assistance through appropriate federal agencies such as the U.S. Agency for International Development, the State Department, the Millennium Challenge Corporation, and the International Development Finance Corporation; contributions to the Green Climate Fund and other multilateral funds and institutions; and expansion of government efforts to unlock much higher levels of private investment in clean energy and climate solutions globally. The administration will of course need to work with Congress to secure the budgets for these programs. The administration should also prioritize staffing key leadership positions and structural changes to elevate climate change throughout U.S. foreign policy engagements.

Without the luxury of time, it is critical that the Biden-Harris administration begin fulfilling the mandate for global climate leadership throughout this transition period and in the first 100 days.

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Green Jobs, Good Jobs, and the United States’ Two Labor Markets

Lachlan Carey
Associate Fellow
Energy Security and Climate Change Program

One reading of the 2020 presidential election is that, even more than in 2016, it was a battle between two labor markets. One is more college-educated and urban, comprised of jobs disproportionately important to the industries the United States’ modern economy, like teachers, doctors, financiers, and software developers. The other, is less educated and rural, composed of jobs that have been particularly affected by the twin forces of globalization and automation, including a manufacturing sector gutted by Chinese imports and office workers replaced by information and communications technology software.

President-elect Joe Biden has described “unity” and “healing” as the watchwords of his incoming administration; however, rhetoric alone cannot unify these divisions or heal the wounds on these labor markets left by 30 years of neglect. The Biden administration will have to explicitly target creating good jobs in these markets and provide the tools to transition where the old jobs are not coming back if it is to bring this country together.

The question, of course, is how? While the answer in broad terms is what is known as “industrial policy,” and specifically green industrial policy, the specifics are still up for grabs. This concept is not new, only a different application; the United States has been pursuing an industrial policy that promotes finance and health care for at least 30 years. The benefits of green industrial policy are that the needs of deep decarbonization extend to every corner of the United States and will require a labor force of construction workers, solar panel installers, home retrofitters, and other tasks that do not require a college degree. Though hardly a panacea on their own, some combination of active labor market policies, infrastructure spending, sector-specific subsidies, research and development (R&D) funding, trade protection for nascent industries, and credit guidance policies can create millions of well-paying jobs in sectors crucial to the climate change fight while restoring trust and hope in the institutions of American governance.

For too long, climate policy has added to this country’s divisions when it should be a source of healing. A well-defined, evidence-based green industrial policy can make a start by creating good jobs in every labor market, every county, and every congressional district in the country, and not to mention saving the planet.

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Enabling the Transition

Morgan D. Bazilian
Senior Associate (Non-resident)
Energy Security and Climate Change Program

The hope and possibility of a new administration is palatable. As a result, there is no shortage of advice being provided to the incoming Biden administration—from Covid-19 to climate. Now that the outcome of the election is all but certain, the jockeying in the Beltway for political appointments is frothy.

Perhaps no other area has received more attention than energy and climate change—the fourth pillar of the Build Back Better platform.

As Biden was declared victorious by the various news agencies, the recommendations flooded the media: from nine points, to ten points, to 40 ideas, to 11 offices, and 48 issues. These proposals have much in common, use a similar language, frame the issues very closely, and make nearly identical assumptions.

The typical “take” is that approaches need to be designed with a Republican-controlled Senate in mind. While a fair starting point, designing action that can withstand a potential political standoff is also good practice. Some legislative action is critical to pursue.

The experiences and responses of the Obama era resonate deeply in these lists. The reports or articles tend to include, among other things, regulatory approaches in the power sector, increased standards in transport, making use of the Clean Air Act or the powers of the Environmental Protection Agency, new or refined institutional approaches, a nod to foreign policy through rejoining the Paris Agreement, increasing R&D, and more. Almost none of it is new.

That is not to say that these are not good ideas—many are. A complicating matter in deciding the portfolio of actions to be taken is the tension within the Democratic Party on pace and ambition—that issue is not often broached. 

How then to ensure some level of longevity is built into new policies and regulations while navigating this complex terrain? Five things might help.

First, incorporate process and structural issues up front. That is, there is a tendency to focus solely on content or specific pieces of policy. Recognizing the need for fundamentally changing structures in government as well as the processes for how things get designed and implemented is critical.

Second, do not rely solely on the same people. Yes, experience helps, but more reliance on public servants as opposed to political appointees is important. Also, depending solely on a few elite private universities for talent of political appointees is parochial and limiting.

Third, do not put too much stake in introducing new titles, like czar, or new councils. The United States has an extraordinary set of scientific and diplomatic institutions that can be refined and augmented and relied on much more heavily than in the past.

Fourth, the states have been carrying on the lion’s share of this work over the last four years, and maybe longer. That should be recognized, and they should be empowered to continue while catalyzing their work. 

Fifth, expand the technocratic lens. The need to fully engage on socioeconomic issues, from equity, to social license to operate, to just transitions, may be the most important pivot a new administration could make. Engaging communities will be essential to success in these areas.

A key metric of success will be the durability of these new actions and measures. By focusing on these enabling issues, the new administration can help ensure some new level of credibility for the United States both domestically and abroad­—a more important goal than global leadership right now. Governing with humility should be step one.


Biden Plans to Halt New Oil and Gas Licensing on Public Lands

Ben Cahill
Senior Fellow
Energy Security and Climate Change Program

Joe Biden has pledged to ban “new oil and gas permitting on public lands and waters,” and this is one campaign promise that should be relatively easy to execute. The executive branch has broad control over oil and gas licensing on federal lands, which accounted for about 24 percent of U.S. oil and gas production in 2019. Biden can implement this agenda through executive orders carried out by the Bureau of Ocean Energy Management (BOEM) and the Bureau of Land Management (BLM). Significant changes in leasing and permitting can be made through new rules and guidance, and legislation is not required.

The BOEM oversees offshore leasing in the Outer Continental Shelf (OCS) through five-year programs that set out a schedule of lease sales. The current plan covers 2017–2022, with five remaining lease sales in that period. The interior secretary has the authority to amend the current program by canceling lease sales or narrowing their geographic scope, and the next five-year period could include no lease sales at all. In the past, presidents have also used their authority under the OCS Lands Act to withdraw areas from leasing consideration.

The BLM manages onshore resources on federal lands, including oil and gas, coal, and minerals. It holds oil and gas lease sales throughout the year at the state or regional level and issued more than 1,300 new leases in fiscal year 2018. Executive action can reshape the BLM’s future land-use or resource management plans. Biden could, for example, require new rules for environmental impact statements or assessments to account for climate impacts.

The effects of a halt in new licensing would take some time to materialize. Existing leases would remain active, and there have been extensive lease sales this year, with companies perhaps more motivated than usual to acquire acreage. In the offshore Gulf of Mexico, a full stop in permitting could take nearly a decade to show up in production rates, given the typical timeline for planning, exploration, appraisal, and development. In the shale patch, states with significant federal lands such as New Mexico (including the Permian Basin) and Colorado could eventually see declining investment, production, and royalty revenues. Governors and members of Congress from these states may grumble and lawsuits over new rules are likely, but presidents drive policy on federal lands. 

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Biden’s CAFE Table for One Is Great News for Electric Vehicle Makers

Ethan Zindler
Senior Associate (Non-resident)
Energy Security and Climate Change Program

While virtually all segments of the clean energy sector had reasons to applaud Biden’s win, electric-vehicle (EV) manufacturers should have cheered loudest. Why? Because the next president will have it in his hands to make the United States a top market for the sales of EVs just they approach price parity with internal-combustion engine cars. Best of all, he can do it regardless of who controls Congress.

After taking office, Biden has said he will tear up the Trump administration’s corporate average fuel economy standards on light vehicles (cars). Trump’s Safer Affordable Fuel-Efficient (SAFE) rule is itself a re-write of the regulation issued under Obama. Biden has promised his new rule will be even more stringent than the one written when he was vice president.

According to BloombergNEF data, Global EV sales topped 2.1 million units in 2019, and to date, the United States has not been a top-tier market, largely because it lacks clear, stable long-term policies to decarbonize its car fleet. U.S. sales have lagged those in Europe, which has aggressive emissions-reduction targets, and China, which subsidizes both EV supply and demand. Last year, Europeans purchased 539,000 EVs, and seven of the continent’s countries have announced plans to abolish sales of internal-combustion engine cars altogether in 10 years or less. Meanwhile, nearly 1.1 million EVs were bought in China in 2019 (and, for the most part, manufactured in China as well).

The United States? Just 320,000 EVs were sold in 2019. To address this, Congress could extend or expand consumer tax credits, which typically defray $7,500 per EV purchase. But even if it fails to do so, EV sales would have to grow sharply if the CAFE rule for cars get refortified.

My BloombergNEF colleagues Aleksandra O’Donovan and Corey Cantor have examined the implications of simply reverting to the Obama-era rules. In 2019, EVs accounted for just 2 percent of U.S. vehicle sales. They find that with the original Obama rules in place, by 2023, EV sales would jump to 15 percent of total car sales and by 2026, to 25 percent. That would translate potentially to 4 million new EV sales that year. Under the Trump administration SAFE efficiency rule for cars, EVs would have totaled under 5 percent and well under 1.5 million sold. Given that Biden has suggested his new CAFE rule could be even tougher than what Obama promulgated, the 4-million figure in 2026 could be regarded by automakers as a floor, not a ceiling.

From a climate perspective, we should all be grateful that Biden can exert relatively unilateral control over the efficiency of the transportation sector as it is now the single biggest contributor to U.S. carbon dioxide (CO2) output. Market forces, including cheap renewables and gas, will continue to retire the U.S. coal-fired power fleet and push power-sector emissions down (at least in the short run). But without a strong policy push, transportation emissions would otherwise keep rising. Luckily, this one President-elect Biden can address on his own—so long as he fulfills his campaign promises.

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How Biden Might Decarbonize the U.S. Power Sector

Michael Catanzaro
Senior Associate (Non-resident)
Energy Security and Climate Change Program and Wadhwani Chair in U.S.-India Policy Studies

As part of his $2 trillion climate plan, President-elect Joe Biden has established a goal of decarbonizing the country’s electricity sector by 2035. Even with significant progress in reducing CO2 emissions from power plants, Biden’s goal is ambitious. And new federal legislation will likely be necessary, though not enough, to achieve it. 

In 2019, the power sector represented about one-third of U.S. energy-related CO2 emissions; only the transportation sector emitted more. Over the last decade, electric utilities have replaced coal-fired generation with natural gas and renewables. As a result, according to the U.S. Energy Information Administration (EIA), U.S. electric power sector emissions have fallen 33 percent from their peak in 2007.

Former energy secretary Ernest Moniz said the coming decade will have to be the “supercharged innovation decade” in order to meet Biden’s goal. So, what are the levers Biden can pull at the federal level to push the United States in this direction?

New legislation in the form of a federal clean energy standard (CES) would be a significant step. And it is possible, depending on how it is drafted, to get some Republican support. There are several versions of a CES, including “The CLEAN Future Act” and “The Clean Energy Standard Act of 2019.” Given the likelihood of a divided Congress, the CES discussion draft introduced by Representatives David McKinley (R-WVA) and Kurt Schrader (D-OR) is garnering bipartisan interest. 

A key question is how a potential CES would treat natural gas-fired generation. For Republicans, if gas is excluded or treated unfairly relative to other power sources, it seems unlikely that such a CES could attract their support in sufficient numbers. On the other hand, many Democrats may recoil at a CES with generous treatment for gas, making compromise on a CES difficult to reach. 

Short of a CES, Biden could pursue increased federal spending on R&D, an area that seems most politically promising. Over the last two years, several bipartisan bills have been introduced on advanced nuclear, hydropower, battery storage, and carbon capture, utilization, and storage. 

Biden can also pursue emissions cuts principally through regulation under the Clean Air Act.  But here, his ambitions will likely be clipped by the Supreme Court, which blocked implementation of the Obama Clean Power Plan (CPP) in 2016. The CPP sought to regulate the electric power system as a whole, not just individual power plants. Any new regulation in this regard will have to be scaled back within the confines of existing law.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2020 by the Center for Strategic and International Studies. All rights reserved.

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Morgan Bazilian
Senior Associate (Non-resident), Energy Security and Climate Change Program
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Ben Cahill
Senior Fellow, Energy Security and Climate Change Program
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Ethan Zindler

Ethan Zindler

Former Senior Associate (Non-resident), Energy Security and Climate Change Program
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Michael Catanzaro
Senior Associate (Non-Resident), Energy Security and Climate Change Program

Lachlan Carey

Rachel Posner Ross