President-elect Joe Biden’s aggressive push to combat climate change is being closely watched by foreign allies to see how increased U.S. investments in clean energy will affect the global market for zero-emission technologies, though some international observers are questioning how much he should rely on regulatory mandates.
Rather, some foreign observers suggest the incoming Biden administration should widely leverage market forces to achieve his goal of a zero-emission U.S. economy by 2050.
That balancing act was highlighted at a Jan. 8 Atlantic Council webinar on global energy issues, where the United Kingdom’s Prince Charles touted a “sustainable markets initiative” to restructure the economy to avoid major climate risks while European business leaders questioned if Biden would return to the regulatory mandates that featured prominently in the Obama era.
“First of all, the private sector has a vital role to play to ensure sustainability is central to business strategy decision making, investments, accounting, procurement, supply chains and consumer engagement,” Charles said in touting his “sustainable markets initiative,” which aims to accelerate the transition to a cleaner energy economy.
The heir to the British throne said “there is a need to reimagine, design and communicate the future of industry and the future of the economy while identifying, scaling and showcasing sustainable solutions and alternatives.”
He asserted this effort “will require active investment in innovation technology research and development along with collaborative competition in a way that accelerates global progress,” in laying out the challenge for the incoming Biden administration and other like-minded nations to combat climate change.
During the Atlantic Council event, the chief executive officer of Norway’s Gassnova company, Trude Sundset, questioned what role the U.S. will be expected to play in a lower-carbon global economy.
“So, what are your expectations from the Biden administration for [carbon capture and storage (CCS)] technology both domestically and abroad?” she asked other panelists, including Net Power CEO Bill Brown. “Will there be a continuation of Obama-era policies, or will it be more direct investment in technologies?”
Sundset’s company is backed by the Norwegian government to develop CCS technology.
Brown, who promoted his U.S.-based company’s new CCS technology at a natural gas-fired power plant, expressed optimism that Biden will “work behind the scenes” to win bipartisan support for elements of his climate agenda.
“We've got to stop being against those things we’re not 100 percent for,” he said, arguing for advancing policy areas where there is consensus. “Instead of choosing a technology, we need to be choosing a future,” he added. “So, I think the government, this new government, is going to be really good at taking us in that direction.”
One immediate challenge for Biden will be how to address a last-minute regulatory proposal by the outgoing Trump administration to prevent banks and financial institutions from assessing climate risks when making lending decisions.
“In making it more difficult for banks to establish risk-based policies prohibiting lending to certain lines of business, this proposal will create a chilling effect that will dissuade banks from implementing prudent risk assessment approaches,” says a Jan. 4 letter from four Democratic senators and nine Democratic House members to the Treasury Department’s Office of the Comptroller of the Currency (OCC).
The lawmakers’ opposition to the Trump plan underscores the continuing partisan divide in the U.S. over climate change even as the Biden administration will look for consensus low-carbon options.
At the same time, the Trump Treasury Department has extended the timeline for renewable energy projects on federal lands and waters to qualify for lucrative tax incentives, a move that could be a boost for the new administration’s climate agenda.
In a notice issued late last month, Treasury and the IRS said such projects satisfy “continuity safe harbor” requirements for federal tax breaks if they are completed within 10 years, rather than the prior five-year window.
Yet, the Biden administration faces pressure to move quickly in developing clean energy technologies at the Department of Energy (DOE) that could drive new low-emission markets.
The outgoing director of DOE’s Advanced Research Projects Agency-Energy (ARPA-E) urged the incoming Biden administration to emphasize speed over cost in approving and funding clean-energy projects. “Speed matters,” said ARPA-E Director Lane Genatowski during a recent event hosted by the Bipartisan Policy Center.
The Biden team is expected to rely heavily on ARPA-E to prioritize and commercialize projects for reducing the nation’s greenhouse gas emissions. “When you trade off money versus speed . . . spend the money to get speed,” Genatowski said during the Jan. 7 webinar.
That advice could be good news for European allies and the international community, based on the concerns and priorities expressed during the Atlantic Council event.
“Industries, like countries, are interconnected and interdependent,” said Prince Charles, in an effort to rally global efforts on climate. “Progress in one industry can catalyze and incentivize progress in another, in this way industry efforts have never been more important particularly as currently companies around the world are failing to produce credible climate transition action plans.” – Rick Weber (firstname.lastname@example.org)