The incoming Biden Administration has an opportunity to craft a “grand bargain” – a robust bipartisan climate policy. With fossil fuel companies embracing Environmental, Social and Governance (ESG) agendas and seeking regulatory constancy, Republicans are moving off the sidelines. Congress and the incoming president should seize the opportunity: under a best case scenario, a roster of complimentary efforts could morph into comprehensive legislation on the scale of the Clean Air Act, centered upon a carbon price and border adjustment tariff.
Democratic priorities start with President-elect Joe Biden’s campaign pledge to strive for net-zero carbon emissions by 2050 and a carbon-free electric power sector by 2035. Biden’s goals hinge on support for renewables, along with upgraded electricity transmission, electrification and efficiency improvements in transportation, manufacturing and in buildings, and R&D funding for national labs. Coal would be ousted from the power sector, while cleaner industrial heat sources such as hydrogen would replace coal in industry. Miners and coal communities would receive federal support.
Republican climate priorities, while still emerging, hinge around R&D, carbon offsetting programs like tree planting, and support for nuclear power and carbon capture and storage (CCS). These methodologies would abate fossil fuel emissions in ways that help greenhouse gas (GHG)-intensive industries survive decarbonization.
Even with Democrats on track to control the Presidency and both houses of Congress, the legislative pathway for climate action remains complicated by very narrow majorities and the number of Democratic Representatives and Senators from fossil energy-producing states. Moreover, bipartisan action could help the future acceptability of any new legislation – in contrast, see how the unilateral passage of the Affordable Care Act (known as “Obamacare”) in 2010 with no Republican votes continues to be a political rallying point for opposition more than a decade later.
The Biden administration can also pursue some of its goals without Congress. Biden may be pushed in this direction by Republican opposition, energy-state Democrats and the progressive wing of his own party. That would be unfortunate. The incoming president would be left to pursue a truncated climate agenda via executive actions and appointments of cabinet members and agency heads. This would result in weaker policy.
In reality, climate should not be a battleground. Priorities on both sides of the aisle are complimentary. As the 2015 legislation lifting the US ban on crude oil exports during the Obama Administration shows, compromise is possible. Bipartisan climate policy would ideally leverage the fossil fuel industry’s engineering and geological expertise.
Clean energy priorities once identified with Democrats have gained ground in Republican-dominated parts of the country. Installed wind capacity through 2019 in states that voted for Donald Trump was 314 GW, compared with 196 GW in those that went for Biden (see chart). While a divided Congress will present an obstacle to Biden’s climate ambitions, if the administration’s focus is on carbon reduction rather than favorite pathways, bipartisanship can work.
These proposals could serve as building blocks in a “grand bargain” or standalone components.
• Carbon pricing: Transparent and predictable carbon pricing with a border adjustment would minimize the cost of decarbonizing the US economy, leveling the playing field for competition among countries, fuels, and technologies. Carbon revenues could be rebated to households or, perhaps, used to provide a social safety net for economic victims of climate policy. Several relevant bills have been introduced, including ones with significant Republican support.
- Nuclear power retention, advancement and expansion: The beleaguered nuclear power sector, the only dispatchable source of zero-carbon baseload power, requires immediate help to retain plants nearing the end of their operational lives.
- Utility scale energy storage and battery R&D: Improved batteries will strengthen the continuity of intermittent wind and solar production reduce emissions in the transportation sector. Broad congressional support could also target other storage options, including that of “green” hydrogen generated by curtailed (i.e. excess) renewable power.
- Dual advancement—renewables and CCS: An easy bipartisan win can be had by pairing continued incentives for CCS with those for wind and solar.
- Hydrogen—green or blue: Two methods for generating “clean” hydrogen—one leveraging renewables, the other based on splitting natural gas into its component parts and sequestering the carbon dioxide—appear designed to garner bipartisan support; hydrogen would also leverage existing oil company infrastructure, thus requiring fewer disruptions to the status quo.
- Nature-based carbon storage and offsets: Carbon offsets are a crucial factor in the “competitive decarbonization” process underway in the oil business. Many companies have begun reducing upstream GHG emissions as a marketing advantage, and to prolong the use of oil in transport. Policy can support this process as well as investment in enhancing natural carbon sinks by planting trees and other plants, and by improving carbon storage capacity in soil and oceans.
- Efficiency standards: Legislating adoption of strict fuel efficiency standards already embraced by about half of carmakers should be a no-brainer. A single national standard that would provide long-term regulatory certainty—toward eventual carbon neutrality—might prove a reasonable part of a bipartisan climate bill.
- Research and development: Numerous weak points in GHG mitigating technology require R&D to improve. With a bipartisan mandate, this research could be led by the Department of Energy’s various National Laboratories.
- Transmission infrastructure: Moving hydrogen, carbon dioxide, and clean electricity from production sites to load centers and disposal locations requires large-scale networks in multiple jurisdictions.
The incoming Biden administration has the potential to energize bipartisanship by signaling support for climate action proposals that can add value for all parties. In fact, climate action is ripe for action as Democratic and Republican proposals are in many ways, as pointed above, complementary. But for the effect to be substantive and long-term, a good faith approach is needed, between both parties and between the administration and the Congress. As we have seen, executive orders alone are not enough. While expedient, they can be reversed quickly when the occupant of the White House changes.