"Build back better" has been Joe Biden’s campaign promise. Climate policy is central to this, both in domestic and foreign policy. Ultimately, it is also a question of whether the Biden government can succeed in regaining lost credibility on the international stage.
This commentary is part of our dossier The Paris Agreement Five Years On.
"Build back better" has been Joe Biden’s campaign promise. For the president-elect, it is now a matter of ambitious implementation in a phase in which not only the United States but also the world community is shaken by multiple crises and is more than ever dependent on solidarity, goodwill, trust and joint courageous action. Climate policy is central to this, both in domestic and foreign policy. Ultimately, it is also a question of whether the Biden government can succeed in regaining lost credibility on the international stage.
Especially the context of the Paris climate agreement, which Biden has promised the USA will rejoin on his first day in office, will provide the ultimate text-case whether the USA wants to and can be a responsible global team player again. In order to live up to its claim to a new international climate leadership role, the USA will not only have to fulfill its existing obligations at home in accordance with the agreements reached in Paris five years ago without further delay, but also must significantly increase national emission reduction commitments in time for the COP 26 climate conference in Glasgow.
Climate protection as a cross-cutting issue
The fact that climate protection will play a key role as a government-wide approach for the new U.S. administration, as demanded by many environmentalists and progressive forces, has already been demonstrated in recent weeks by the preparatory plans for Biden entering the White House and in important cabinet decisions. A transition team saturated with climate experts is to ensure that climate protection is taken into account as a cross-cutting issue when appointing staff and setting priorities for a wide range of departments and specialist agencies. This applies to obviously climate related departments such as those responsible for energy, foreign policy, the interior, the economy and agriculture, or the U.S. Environmental Protection Agency (EPA), which under the Trump administration suffered an alarming loss of scientific knowledge and expertise. It also applies to departments that have so far been rather unnoticeable for their climate intent and expertise, such as the Treasury Department, departments for transportation, defense and Justice, or the US financial supervisory agencies.
This also reflects a basic assumption of the progressive "Green New Deal" - a label that Biden officially rejected, but whose elements have largely been incorporated into his US$ 2 trillion climate plan. It is about prioritizing addressing the climate crisis by involving the whole US government and bringing the might of the entire US economy to bear.
A first inkling of the level of priority climate policy will receive under Biden's foreign policy as an unprecedented diplomatic focus is illustrated by initial reports from his transition team of more than a dozen telephone conversations that the president-elect has had with heads of government around the world, including from France, Chile, South Africa and Canada, in which the fight against climate change played a central role. This is also an acknowledgement that the U.S. has a long-standing credibility problem in climate policy, especially among partner countries, that did not just emerge during the Trump years, although it has undoubtedly grown exponentially under a climate change-denying American president. The U.S. has earned a reputation as an unreliable repeat offender with the Kyoto Protocol in 1997, the Paris Climate Agreement Climate in 2015 or the Kigali Agreement on the Montreal Protocol in 2016, in which Democratic governments through diplomatic pressure and some arm-twisting reached U.S.-friendly compromises in international climate agreements only to promptly put U.S. participation and national implementation on hold under Republican follow-up governments. In light of this history, Biden and his new government colleagues must recognize that American repair measures to the country’s climate credibility must not only be announced but even more importantly implemented quickly, decisively and convincingly.
The rapid appointment of a climate-focused foreign policy leadership team, which already played a central role in the negotiation of the Paris Agreement, with long-time Biden confidant Anthony Blinken as the new Secretary of State and former Secretary of State John Kerry as the President's Special Envoy on Climate Change, has created the first personnel prerequisites for the implementation of a far-reaching American climate-oriented foreign policy. As a senior diplomat who is sure to have the President's ear, even though he formally reports to Secretary of State Blinken, Kerry will become the highest-ranking U.S. official ever to hold a portfolio devoted exclusively to climate change when he takes office, which is at cabinet level but does not require confirmation from the Senate. He will also be the first climate official ever to hold a seat on the National Security Council. All this speaks for the intention of President-elect Biden, who has called the climate crisis "the number one issue facing humanity", to treat climate change with the same urgency as other threats to national security in the United States, such as terrorism or nuclear proliferation.
No return to Obama-era climate diplomacy
Although it is not yet clear what the division of labor between a Secretary of State Blinken and a Special Presidential Climate Envoy Kerry will look like, it is already clear that with the re-entry into the Paris Agreement in January 2021, the focus of US climate diplomacy must be on revising and refocusing the America’s nationally determined contribution (NDC) to follow through with the implementation of the accord by COP 26 in Glasgow and on promoting higher concerted climate protection measures worldwide. The most recent United Nations Emissions Gap Report warns alarmingly that states must triple their reduction efforts in order to still reach the Paris target - this makes the pressure for a correspondingly ambitious and visionary US contribution even greater. The continuity of both top diplomats in the climate process must not obscure the fact that the US re-entry into the Paris Agreement cannot be a return to the old American negotiating tactics of the Obama era and an international climate policy based on US self- interest, but must be a further development of a human rights-centered and gender-equitable new US climate approach, in which global responsibility, justice and fairness dominate, and which after more than 30 years of US sub-optimal engagement in the climate process must now finally be in line with the role of the US as historically largest emitter of greenhouse gases, as the second largest polluter after China (which has a four times larger population) and as the current world leader in climate-destroying oil and gas production. This will be reflected above all in the reduction targets that the USA sets in its revised and upgraded NDC and in the solidarity it shows in its financial support for climate measures in developing countries.
Such a normative framing and value-based orientation of a U.S. climate-focused foreign policy towards climate justice and the protection of human rights and gender-just support for the countries and population groups already most affected by climate change would also be a coherent policy approach for a Biden government that has made environmental justice on its own soil a key goal of its domestic climate policy in order to combat systemic environmental racism. After his election, Biden renewed his pledge to invest 40 percent of his US$2 trillion climate plan for clean energy resources and newly created jobs of the future in communities and for minority population groups of color that have suffered disproportionately from fossil fuel pollution, for example those along Cancer Alley in the state of Louisiana. The implementation of national environmental justice is also considered a major task of a potential new position of a climate change coordinator in the White House, who, as a nationally-focused climate czar, would then be the domestic counterpart to Kerry.
New Nationally Determined Contribution
The Obama administration's nationally determined contribution submitted for the 2015 Paris Agreement, namely to reduce emissions by 26-28 percent below 2005 levels by 2025, may just be achieved thanks to the coronavirus pandemic, according to current analyses, but this is no cause for jubilation, no indication for a lasting shift in the US economy, and always was completely inadequate. Already in 2015 did it not even account for one-fifth of what a fair share US contribution to the necessary collective global climate protection efforts forecast should have looked like.
Candidate Biden has declared his goal to make all US power plants climate-neutral by 2035 and put the USA on the path to net zero emissions by 2050. The elaboration of the new US NDC should reflect this ambition in concrete emission reduction targets already by 2030. Several environmental think tanks in the U.S. have calculated that nationwide emission reductions of between 45-50 percent are feasible, which would be necessary to make U.S. greenhouse gas emissions compatible with the IPCC goal of limiting global warming to 1.5 degrees Celsius. However, this is far from the efforts that U.S. environmental groups like the US Climate Action Network, for example, have calculated as a fair share of the U.S. contribution to global climate protection efforts, according to which U.S. greenhouse gas emissions would have to be reduced by 195 percent by 2030 compared to 2005 levels, 70 percent of which would be achieved domestically, and the rest abroad in the form of significantly ramped up technology and financial support for climate efforts in developing countries.
With respect to US climate financing, too, it remains to be seen whether a return to the climate diplomats of the Obama administration under President Biden in the international climate process could mean a departure from long-standing efforts in finance negotiations focused on blocking more generous financial transfers to developing countries and the overall insufficient support for the climate funds under the Framework Convention on Climate Change, such as the Global Environment Facility, the Adaptation Fund, or the Green Climate Fund. It is true that the Paris Climate Convention 2015 for the first time recognized the negotiating area of Loss and Damage as separate from adaptation efforts in a separate article in the treaty. However, it was the United States under its negotiator John Kerry that prevented the industrialized countries from being held liable for the damage caused by severe climate impacts and from being obliged to provide compensatory payment support to vulnerable countries. At COP26 in Glasgow, financial support for developing countries for Loss and Damage will again be on the agenda - with the option for the US to move away from its former firm rejection of any related financial responsibility.
"Build back better" of US climate financing
A "build back better" of US climate financing under Biden would also be desirable. The quick settlement of the US$ 2 billion in debt that the US still owes to the Green Climate Fund from the US$ 3 billion pledge made under the Obama administration can only be a first step. The US would also have to make a significant commitment to contribute to the GCF’s first replenishment phase (2020-23), already finalizing its first year of implementation, which as a minimum should keeps up with the contribution pace of other industrialized countries such as Germany, France and Great Britain, with have doubled their payments during the GCF’s initial resource mobilization phase. This would mean a US payment under a President Biden to the GCF of between US$ 6 and 8 billion. A fair share contribution of the United States to the GCF as the major multilateral financing instrument for the implementation of the Paris Agreement, as, for example, Biden's primary rival Bernie Sanders had calculated as part of his program for a Green New Deal and which also recognizes international financing obligations, would be many times higher. In the Sanders plan it is reflected with a proposed US$ 200 billion contribution to the GCF for its current four-year replenishment phase. The support for the Global Environment Facility, which also funds biodiversity and desertification efforts, should also be significantly increased. And the USA under Biden should for the first time support the Adaptation Fund, which finances smaller-scale adaptation projects and has served the Paris Accord since 2019. In addition, a Biden government should also expand bilateral climate financing, for example by the US development agency USAID, specifically for adaptation efforts.
In order to move the climate negotiations at COP 26 forward, firstly, higher financial commitments by the industrialized countries, secondly, clear signals that the long-term climate financing target of 2009 in Copenhagen to provide US$ 100 billion annually by 2020 can be met, and thirdly, the willingness to initiate the process for a new, much higher collective climate financing target in Glasgow are necessary. At all three levels, under President Biden, the US can demonstrate that it is fully committed to meeting its international climate responsibilities by sending a positive signal.
With the political majority in the U.S. Senate in limbo until the runoff election for two Senate seats in Georgia in early January, it is not yet clear whether a President Biden can count during his first two years in office on the support of Congress for his climate. In a majority Republican, largely climate-hostile Senate and with a split Congress, an increase of US climate finance support for climate protection measures in developing countries is virtually unthinkable, and legislation to implement Biden's ambitious decarbonization strategy could be limited to the climate investment bits and pieces that can be cleverly hidden in funding bills for infrastructure, agriculture or housing measures. There are, however, areas, particularly for research and technology development, in which a Biden government could possibly count on Republican support, for example for the further development of new nuclear reactor technologies and carbon capture and storage (CCS), both approaches that have been criticized by environmental activists but actively promoted by Candidate Biden during the Democratic primaries, where he defended them as a means to reduce emissions and achieve American climate neutrality by 2050, and which he could use as implementation elements of his climate agenda.
Implementation with or despite the US Congress
Biden's first and best opportunity to move forward with a Republican Senate lies in a new much-needed coronavirus pandemic stimulus package in the spring of 2021, in which climate protection measures such as modernizing the electricity grid, creating jobs in the renewable energy sector and economic research for green innovation can be embedded in other social and economic support measures. This would be all the more important because the first pandemic economic stimulus package, the CARES Act of spring 2020, has provided massive amounts of support to U.S.fossil fuelproducers. In addition, the future White House has a strong ally in the new chair of the Appropriations Committee in the House of Representatives, Rosa DeLauro, who controls the approximately $1.4 trillion a year in federal spending. And once passed, climate-related expenditures can usually neither be challenged in court (a danger as the American federal court system has moved dramatically to the right with the appointment of hundreds of conservative judges under Trump) nor reversed by a successor government.
With or without a Democratic Senate majority, the new government's comprehensive climate agenda depends primarily on implementation administration-wide by federal agencies; this is all the more important in a divided Congress. The rapid restoration, targeted improvement or wise expansion of the more than 100 Obama-era climate and environmental regulations that were suspended, weakened or repealed by the Trump administration, such as the regulation of CO2 emissions from power plants or methane leaks from oil and gas fields or existing regulations under the clean air and clean water acts is the programmatic foundation, with a revitalized Environmental Protection Agency (EPA) as lead agency. In addition, as he announced he would do during the election campaign, a President Biden can strategically yield the weapon of presidential executive orders, as a way of obliging go, with the stroke of a pen and without mandated regulatory review, task government authorities via their regulatory authority to propel the necessary course corrections in the U.S. economy, for example through executive decrees. Some of Biden’s first executive orders could for example expand nature conservation areas and reserves to cover 30 percent of U.S. land area and territorial waters and protect the Arctic National Wildlife Refuge from oil drilling, tighten fuel economy regulations by making California's progressive standards the basis of upgraded federal standards, raise efficiency standards for equipment and buildings, and increase the energy efficiency and climate-compatibility of U.S. government buildings, operations and procurements. Special attention should be given to the role of the US Department of Defense as the largest consumer of fossil fuels in the federal government and as the largest institutional greenhouse gas polluter in the world.
Under a Biden presidency, in view of the central role of the United States in the international financial system, Janet Yellen, the designated U.S. Secretary of the Treasury, and the former head of the U.S. Federal Reserve, could occupy one of the most important climate policy positions in the administration to steer the U.S. economy and the global economic and financial system towards the low-carbon home stretch, with enormous implications for the realization of the Paris Accord and especially the often forgotten mandate to make all financial flows compatible with the Paris climate goals.
Key role for US Treasury Department
As the head of US financial regulatory agencies, and in particular the Financial Stability Oversight Council(FSOC), which was established in 2008 in the wake of the financial and real estate crisis in the U.S. and which includes senior representatives of the U.S. Federal Reserve, the Securities and Exchange Commission (SEC), and other banking regulators, she can urge U.S. banks and corporations to take the financial risks that climate change and rising temperatures pose into account in their balance sheets and to change incompatible business practices. U.S. climate activists are hoping that the FSOC will address the U.S. carbon bubble of unregulated fossil fuel investments, similar to what happened after the burst of the U.S. real estate bubble. A coalition of progressive groups is therefore calling on the Secretary of the Treasury-designate to restrict the ability of U.S. banks to do business with fossil fuel companies. In addition, banks could be required to increase their capital reserves for lending for oil and gas.
As the country's most important tax collector, the Department of Treasury is also responsible for tax breaks for domestic renewable energy companies and could turn these into direct subsidies as part of a second stimulus package and, conversely, fulfill Biden's campaign promise to end subsidies for oil, gas and coal companies by re-evaluating existing tax benefits for these companies. Yellen, in her role as the top U.S. economic diplomat, will also have a leading voice in the G20 and G7, the IMF and World Bank, and the International Council for Financial Stability, and could put increased pressure on international financial institutions such as the World Bank to pull out of fossil fuel financing altogether. It can also be expected that as part of her international and national policy efforts to make finance, tax systems and banking more climate compatible, she will continue her longstanding advocacy in support of a carbon tax, which she has called a "textbook solution" to the global climate crisis. As a founding member of the nonpartisan Climate Leadership Council, which includes companies such as Ford Motor Co., Exxon Mobil Corp. and BP PLC, and as a former co-chair along with Mark Carney in the Group of 30 and in her bipartisan appeals with other American economists, she has repeatedly called for a carbon tax.
She also shares the enthusiasm for carbon pricing with John Kerry, the president's new special climate envoy, who is considered a strong proponent of carbon markets, to which American climate activists have reacted with skepticism, arguing that levying a carbon tax on and carbon trading are not enough, if not entirely the false solutions, to slow global warming.
Climate compatible trade policy
In the past, Yellen has also advocated a border adjustment tax on imports, which would discriminate against carbon- intensive products and reward energy-efficient companies. Such a tax could also become part of a US climate-compatible trade policy under Biden, who has announced the use of all necessary US foreign policy instruments to boost climate ambitions globally. Biden's trade agenda also provides for a global ban on fossil fuel subsidies and the integration of emission reduction commitments into trade agreements, elements for which he can count on the support of Democratic trade experts in Congress. This could, for example, be reflected in trade relations with China, for example as an attempt to persuade China to stop its foreign support for the construction of new coal-fired power plants. A Biden government would thus follow the example of governments in the EU, which only in 2018 had linked progress in negotiations on access to the EU market with pressure on the governments in Australia and Brazil to remain in the Paris Agreement after they had threatened to withdraw. The EU had also threatened the USA under President Trump in 2019 in the context of the transatlantic trade war with a border adjustment tax on American imports.
Biden's Climate Special Envoy John Kerry will also seek progress in the fight against the climate crisis in other international negotiating fora outside the UN Framework Convention on Climate Change and the Paris Agreement. He will seek to build on his experience in negotiating the Kigali Amendment to the Montreal Protocol, which aims to reduce the global use of fluorocarbons as potent greenhouse gases. A U.S. ratification is within reach with non-partisan support in the U.S. Senate. As part of his global climate protection diplomacy, Kerry could also try to forge similar agreements in other sectors of the world economy, for example in ocean shipping with the help of the International Maritime Organization (IMO) or in civil aviation within the framework of the International Civil Aviation Organization (ICAO). Finally, a stronger American commitment to rapid progress in overcoming the climate crisis would also be conceivable in the Climate and Clean Air Coalition, which has been in existence since 2012 and aims to reduce short- lived climate pollutants.
It remains to be seen whether and how quickly the United States under President Biden can once again become a recognized member of an international climate leadership team. The new administration definitely has the claim, the ambition and the potential to not only repair American climate credibility, but also to shore up its fundaments and build back better. Now such promises and plans must be followed by massive implementation efforts. For the benefit of all, the international community can only hope that that the Biden administration will succeed.