Biden’s Climate Crisis EO
1. Announces an April 22 (Earth Day) Leaders’ Climate Summit to prepare for COP-26, and aims to submit a new U.S. Nationally Determined Contribution prior to that Summit
To reassert its leadership position, the U.S. must lead by example. To kick these efforts off, President Biden announced the U.S. will host a Leaders’ Climate Summit on April 22, 2021, reconvening the Major Economies Forum on Energy and Climate (MEF)—a group of 17 major economies first convened by President Obama in 2009 to cooperate on climate efforts.2 While details will continue to emerge, the Summit will be “aimed at raising climate ambition and making a positive contribution to [the 2021 United Nations Climate Change Conference] and beyond,”3 and could trigger additional executive actions or the announcement of new multilateral commitments.
Notably, the Earth Day Leaders’ Climate Summit serves as the self-imposed deadline for the U.S. to announce its new U.S. Nationally Determined Contribution (NDC) under the Paris Agreement. The NDC development process will involve “analysis and input” from federal agencies and “appropriate outreach to domestic stakeholders.” As we explained in a recent alert, President Biden is expected to submit a new NDC with a 2030 target that transcends President Obama’s original pledge to reduce U.S. emissions by 26 to 28 percent below 2005 levels by 2025—and could potentially look to the ambitious goals pledged by other developed countries as reference points.4 At the same time, however, the administration understands that it faces the difficult challenge of balancing ambition with political reality at home in order to put forth a realistic target.
2. Advances the U.S.’s ratification of the Kigali Amendment to the Montreal Protocol regarding the phasedown of HFCs—gases developed to replace ozone-depleting substances but have substantial global warming potential
Making the necessary strides toward curtailing global warming requires internationally coordinated commitments to reduce greenhouse gases (GHGs). President Biden’s EO instructs the State Department to prepare swiftly a transmittal package seeking the Senate’s advice and consent to ratify the Kigali Amendment.5 Over 110 countries have already ratified the Kigali Amendment, a 2016 accord of the Montreal Protocol to gradually phase down hydrofluorocarbons (HFCs), a climate super-pollutant. Biden’s domestic and international climate “czars,” Gina McCarthy and John Kerry, respectively, helped negotiate the Amendment. The U.S. signed the accord but never ratified it. If implemented globally, the Kigali Amendment would avert up to 0.5ºC global temperature warming this century. Senate advice and consent is the penultimate step to ratification, and prospects look promising for bipartisan support, particularly as many Republicans and industry groups acknowledge the significant benefits to U.S. economic interests from ratification.6
3. Commits U.S. to develop a climate finance plan that assists developing countries reduce emissions, protect the environment and align climate investments
The U.S.’s funding capabilities historically have played a major role in solidifying its climate leadership status.7 Accordingly, the EO directs the Secretaries of State and the Treasury to lead an interagency process to develop and present a climate finance plan to the President by April 27, 2021. Fulfilling the U.S.’s original promise to contribute $3 billion8 to the Green Climate Fund—an initiative designed to help developing countries meet their climate mitigation and adaptation needs—will undoubtedly be a top priority.9 Ultimately, the plan could “mak[e] strategic use of” a wide range of multilateral and bilateral funding channels,10 which will become more clear as the Congressional budget reconciliation process unfolds in the coming weeks.
4. Prioritizes ending international financing of carbon-intensive fossil fuel-based energy while advancing sustainable development and a green recovery
The Biden administration will take a more proactive role with allies as it extends diplomatic efforts to end global fossil fuel financing. The EO directs the Secretaries of State, the Treasury and Energy to collaborate with two chief financing institutions—the U.S. Export-Import Bank and U.S. International Development Finance Corporation—to identify steps to stymie international carbon-intensive fossil-fuel based investments.11 There is no deadline for a deliverable to the president, but the directive mirrors recent actions of the European Union (EU) and United Kingdom (U.K.), signaling the U.S. may be looking to take concrete actions sooner rather than later.12 EU foreign ministers just called for an end to foreign fossil fuel financing, and the U.K. pledged to end all overseas oil and gas project financing.
5. Reconvenes the Major Economies Forum on Energy and Climate to pursue green recovery efforts, initiatives to advance the clean energy transition, sectoral decarbonization, and alignment of financial flows with the objectives of the Paris Agreement, including with respect to coal financing
As noted above, the April 22 Leaders’ Climate Summit will mark the official reconvening of the MEF, whose members include, among others, the EU, several of its member states and the U.S.’s top trading partners, China, Mexico and Canada. Notably, the EO’s targeted reference to “coal financing” suggests the U.S. will use the MEF to advance a potential agreement to phase out coal—a subject John Kerry, Special Presidential Envoy for Climate, alluded to in his recent remarks to a global business forum.13 Indeed, the administration’s efforts on this topic are underway. Immediately after inauguration, Kerry engaged with Danish and EU foreign ministers and diplomats to discuss Denmark’s call to create a global alliance to phase out coal-fired power and fossil fuel subsidies.14
U.S. Leadership Team
President Biden has assembled a storied team of experts to lead his cross-cutting climate initiatives, many of whom served under President Obama and played keys role in negotiating the Paris Agreement. Leading on the international front, John Kerry is Biden’s Special Presidential Envoy for Climate. Kerry has a broad and deep bench of experts on his team, with the four key players all having served in pivotal roles in the Obama administration’s climate work. Sue Biniaz is a longtime State Department climate official and was the chief lawyer representing the United States on the Paris Agreement. Jonathan Pershing was a State Department special climate envoy under Obama. Leonardo Martinez-Diaz served as deputy assistant secretary of energy and environment in the Obama administration’s Treasury Department. And Rick Duke served as a special assistant to Obama on climate change. All told, this experience means Kerry and his team can dive into detailed, substantive work from the start, unhindered by learning the complexities of operating within the executive department or in international diplomacy circles.
Implications & Next Steps
- During the campaign, President Biden promised to “lead a major diplomatic push” to increase global climate ambition. The five action items discussed above, together with the rejoining of the Paris Agreement, are the important first steps in carrying out that diplomatic push.
- Ultimately, the devil will be in the (domestic) details. The U.S.’s new NDC—a key leveraging tool for persuading global leaders to increase their climate commitments—must balance ambition with the reality of a close partisan split in Congress and likely legal challenges to any regulatory actions upon which the NDC may rely.
- As the Biden administration’s international climate diplomacy efforts unfold, businesses, investors, and foreign governments should look for opportunities to collaborate with, or provide input to, the administration.
1 EO, Section 102.
2 In addition to the United States, MEF participants in 2009 included: Australia, Brazil, Canada, China, the European Union, France, Germany, India, Indonesia, Italy, Japan, Korea, Mexico, Russia, South Africa and the United Kingdom.
3 EO, Section 102(a).
4 The European Union, for example, has pledged to reduce its emissions 55 percent below 1990 levels by 2030.
5 EO, Section 102(j).
6 A group of 13 Senate Republicans sent a letter to then-President Trump in 2018 urging him to send Kigali to the Senate for advice and consent, emphasizing it protects American manufacturing and jobs while preserving American leadership in technology transitions. See Letter from Sens. John Kennedy, et al., to President Donald J. Trump (June 4, 2018), https://www.eenews.net/assets/2018/06/12/document_daily_01.pdf. The U.S. Chamber of Commerce has come out in support of Kigali Amendment ratification. See Joe Johnson, The Kigali Amendment is a Win for the Environment and the U.S. Economy, U.S. Chamber of Com. (May 5, 2018), https://www.uschamber.com/series/above-the-fold/the-kigali-amendment-win-the-environment-and-the-us-economy. And on December 27, 2020, a massive bipartisan bill to phase down HFCs, called the American Innovation and Manufacturing (AIM) Act, was included in the end-of-year omnibus bill that became law. See Senators Announce Historic, Bipartisan Agreement on Environmental Innovation Legislation (Dec. 21, 2020), https://www.epw.senate.gov/public/index.cfm/2020/12/senators-announce-historic-bipartisan-agreement-on-environmental-innovation-legislation.
7 See Nat Keohane & Sue Biniaz, Climate 21 Project, Transition Memo: Department of State 6 (2020), https://climate21.org/documents/C21_State.pdf; see also Cong. Res. Serv., Paris Agreement: U.S. Climate Finance Commitments (2017), https://fas.org/sgp/crs/row/R44870.pdf.
8 The U.S. made its original $3 billion pledge in 2014; to date, the U.S. has contributed only $1 billion.
9 Fulfilling the U.S.’s commitment to the Green Climate Fund was included in President Biden’s climate plan and is a priority item recommended by Congressional Democrats. See The Biden Plan for a Clean Energy Revolution and Environmental Justice, https://joebiden.com/climate-plan/ (last accessed Feb. 2, 2021); House Select Comm. on the Climate Crisis, Majority Staff Report, Solving the Climate Crisis: The Congressional Action Plan a Clean Energy Economy and a Healthy, Resilient, and Just America 512 (2020), https://climatecrisis.house.gov/sites/climatecrisis.house.gov/files/Climate%20Crisis%20Action%20Plan.pdf; Senate Democrats’ Special Comm. on the Climate Crisis, The Case for Climate Action: Building a Clean Economy for the American People 171 (2020), https://www.schatz.senate.gov/download/sccc-climate-crisis-report.
10 EO, Section 102(f).
11 EO, Section 102(h).
12 EU foreign ministers just called for an end to foreign fossil fuel financing, and the U.K. pledged to end all overseas oil and gas project financing. See Frederic Simon & Kira Taylor, EU foreign ministers call for an end to financing fossil fuels abroad, Climate Home News (Jan. 25, 2021), https://www.climatechangenews.com/2021/01/25/eu-foreign-ministers-call-end-financing-fossil-fuels-abroad/; Jess Shankleman, U.K. is First in G-20 to End All Overseas Oil and Gas Funding, Bloomberg Quint (Dec. 12, 2020), https://www.bloombergquint.com/business/u-k-is-first-in-g-20-to-end-all-overseas-oil-and-gas-funding.
13 See Scott Waldman, Kerry: World leaders are failing Paris goals, E&E News (Jan. 22, 2021), https://www.eenews.net/climatewire/stories/1063723221.
14 See EU nations consider calling for global coal phaseout, U.S. plans spring climate summit, Carbon Pulse (Jan. 23, 2021), https://carbon-pulse.com/119762/; MFA Kofod hosts important diplomatic meeting with U.S. Climate Envoy John Kerry, Ministry of Foreign Affairs of Denmark (Jan. 22, 2021), https://um.dk/en/news/newsdisplaypage/?newsid=905c80c5-e2b8-415f-8c8e-b614fd986a65.