International Climate Change Policy & Action in the Biden Administration

Many of us are still reeling from the January 6th insurrection at the Capitol, incited by the current President of the United States.  And our thoughts are now dominated by yesterday’s impeachment of the President and the ongoing threats of violence in Washington and across the country from his extremist supporters.  But in less than one week, a new President will be sworn into office, and so it is prudent to think about the incoming administration and the challenges it will face in regard to climate change policy.  This is the focus of my essay published today by Lawfare, the superb host for analysis and debate about the law, politics, and policy of international security.  With the permission of the Lawfare editors, I’m pleased to be able to reproduce my essay below (with just very minor edits, namely, the insertion of some section headings for purposes of clarity and consistency with the standard style in my blog).  I hope you find this of interest.

L A W F A R E

The Biden Administration and International Climate Change Policy & Action

By Robert N. Stavins

Thursday, January 14, 2021

Former Secretary of State John Kerry, with grand-daughter in tow, signs the Paris Agreement in 2016 (UN Photo by Amanda Voisard)

On Jan. 20, Joe Biden will be inaugurated as the 46th president of the United States. He will face an unprecedented set of challenges, including global climate change—one of four stated policy priorities of his administration (along with the coronavirus pandemic, economic recovery and racial equity)—in addition to the immediate issue of the looming Senate trial of President Trump and ongoing threats of violence from extremist supporters. Because climate change is a global commons problem and international cooperation is necessary to limit free-rider incentives, President-elect Biden has pledged to immediately initiate the process of rejoining the Paris Agreement (from which President Trump withdrew the United States on Nov. 4, 2020—the earliest date permitted by the agreement). Thirty days after the necessary paperwork is filed with the United Nations, the United States will again be a party to the agreement. That’s the easy part. The hard part is coming up with a quantitative statement of how and by how much U.S. emissions of greenhouse gases will be reduced over time.

The Historical Context

To fully appreciate the challenge the new administration will face, it is helpful to reflect on the history of international negotiations that brought us to this point. At the Earth Summit in Rio de Janeiro in 1992, the U.N. Framework Convention on Climate Change (UNFCCC) was first negotiated, committing parties to achieve stabilization of greenhouse gas concentrations in the atmosphere at a level that would “prevent dangerous anthropogenic interference with the climate system.” Three years later in Berlin at the first annual Conference of the Parties, it was agreed that the wealthier countries (listed in UNFCCC Annex I) would commit to targets and timetables for emission reductions, but not the other 129 (largely developing) countries. This was an attempt to provide for distributional equity among nations —recognizing that the industrialized countries were responsible for the lion’s share of accumulated greenhouse gases in the atmosphere, and by virtue of their wealth were more capable of taking action. Two years after that, in 1997, the Kyoto Protocol was enacted, codifying these objectives with quantitative targets for Annex I countries only.

The Clinton administration negotiated the protocol with considerable enthusiasm under the leadership of Vice President Gore, but it did not submit the protocol to the Senate for possible ratification, knowing that the protocol’s lack of any emissions-reduction responsibility for the large emerging economies (China, India, Brazil, Korea, South Africa, Mexico and Indonesia) meant it would fail in the Senate. This was a reasonable assumption, given that the Byrd-Hagel Resolution, which said as much, had passed the Senate by a vote of 95-0 just four months before the Kyoto conference.

The Kyoto Protocol was highly flawed. First, the Annex I countries alone could not reduce global emissions, despite a particularly severe target for the U.S., as the significant growth in emissions came from the emerging economies. Second, because the protocol excluded most countries (in particular, developing countries with relatively low costs of emissions mitigation), the costs were vastly greater than need be—four times the cost-effective level by conservative estimates. Third, it was questionable whether distributional equity was even achieved, given that 50 non-Annex I countries had greater per-capita income than the poorest of Annex I nations. So, the United States never ratified Kyoto, and eventually Australia, Canada, Japan and Russia dropped out, leaving the European Union and New Zealand as the only Annex I parties participating (together accounting for 14 percent of global emissions).

Almost two decades after Kyoto, a fundamentally different approach to international climate cooperation was taken by the Paris Agreement of 2015, which was developed under the joint leadership of the U.S. and China during the Obama administration.

The Paris Agreement

The key attribute of the Paris Agreement is its hybrid structure, combining top-down (legally binding) and bottom-up elements. The former are largely procedural (but binding under international law), including a requirement in Article 4 that countries submit nationally determined contributions (NDCs), statements of their emissions reductions from 2020 to 2025/2030), and update them by the end of 2020 and every five years thereafter. The key bottom-up element consists of the set of submitted NDCs, which are not part of the agreement but, rather, are assembled in a separate public registry. The notion is that the NDCs—unlike the negotiated Kyoto targets—arise from or are at least consistent with domestic policies, goals and politics in their respective countries. The “bindingness” of the targets, therefore, comes not from the Paris Agreement itself, but from any domestic laws and regulations put in place to achieve the NDCs. It was because of this structure, which avoided binding quantitative targets in the agreement itself, that the Obama administration felt it was able to ratify it as an executive agreement, without Senate approval.

One year after its approval in Paris, the agreement came into force in November 2016, when the threshold of 55 countries representing at least 55 percent of global emissions had ratified it. Remarkably, it had required seven years for the Kyoto Protocol to achieve the same threshold for coming into force. What caused the exceptionally rapid accumulation of Paris ratifications? The explanation lies in the fact that the agreement also provides that once it comes into force, there is a four-year delay before any ratifying country may withdraw. So, from 2015 to 2016, international concern that Donald Trump might be elected president and live up to his promise to pull the U.S. out of the agreement led countries to move as fast as they could, and the Paris Agreement came into force on Nov. 4, 2016. So, global fear of Trump gets credit (and explains why Trump’s withdrawal date of Nov. 4, 2020, was the earliest allowed).

The U.S. withdrawal from the agreement had no direct effect on domestic greenhouse gas emissions. Those emissions were affected by the Trump administration’s rollbacks of Obama-era domestic climate policies. The greatest concern was that such action by the U.S. would lead China, India, Brazil and other emerging economies to rethink their Paris pledges. But this did not happen, as far as we know. Of course, the comparison ought to be with what those countries would have done had the U.S. not withdrawn, but such a comparison would be with an unobservable hypothetical. It is too soon to assess achievement with the initial set of NDCs, since those describe reductions over the period 2020 to 2025/30, but as of early January 2021, only 23 countries had submitted their updated NDCs, due at the end of 2020.

The Challenge for the Biden Administration

As I said at the outset, the easy part will be submitting the necessary paperwork on Jan. 20 to rejoin the Paris Agreement, but the hard part will be coming up with the new U.S. NDC—a quantitative statement of how and by how much U.S. greenhouse gas emissions will be reduced over time. This will be challenging because the new NDC will need to be sufficiently ambitious to satisfy (at least to some degree) both domestic green groups and some of the key countries of the international community (despite the likelihood that Biden and his special envoy for climate change, John Kerry, will initially find a warm reception and abundant goodwill from most world leaders).

This essentially means that the NDC will need to be at least as ambitious as (and probably more so than) the Obama administration target of a 26-28 percent reduction in greenhouse gas emissions by 2025, compared with 2005 (which would have been difficult to achieve even if Hillary Clinton had become president). And it will need to compare favorably with the targets now being announced by other major emitters. For example, the European Union is enacting a new target to cut its emissions 55 percent below its 1990 level by 2030. And China recently said it will achieve carbon neutrality (zero net emissions) by 2060.

But if significant ambition is one necessary condition for the new Biden NDC, the other necessary condition is that it be credible, that is, truly achievable given existing and reasonably anticipated policy actions. The only way that both of these necessary conditions can be achieved is with aggressive new domestic climate legislation.

Is Ambitious Climate Legislation Feasible?

Even with the Democratic-controlled Senate—with a one-vote margin—meaningful and ambitious climate legislation will be difficult, if not impossible. The budget reconciliation process, whereby only a simple majority is needed to pass legislation, rather than the 60 votes required to cut off Senate debate, can be used to reverse some of Trump’s last-minute policies that are connected to the tax code or mandatory spending if every Democrat or enough Republicans to make up for any defections support the given move. And the one-vote margin can be effective for confirming Biden’s appointees, and it can help for increasing the budgets of federal agencies. But for ambitious climate (or other) legislation, the 60-vote threshold will be the binding constraint.

Under these circumstances, it will be challenging, to say the least, for Democrats to enact Biden’s climate plan, including its $2 trillion in spending over four years with the goal of making all U.S. electricity carbon free in 15 years and achieving net-zero emissions economy-wide by 2050. An analysis by the Rhodium Group suggests that to be on a steady path to achieve Biden’s 2050 goal, a cut of 43 percent below 2005 levels by 2030 would be necessary—in other words, a reduction of about 3 percent every year. Also, keep in mind that the Obama administration’s major climate legislation—the American Clean Energy and Security Act of 2009 (the so-called Waxman-Markey bill)—failed to receive a vote in the Senate, even though Democrats (and independents who caucused with Democrats) then held a total of 59 seats. Although climate change is now taken more seriously by the public and receives considerably greater attention in political circles than it did 12 years ago, the prospects over the next two to four years for comprehensive climate legislation—such as a truly meaningful carbon-pricing system—are not good.

But other legislation that would help reduce greenhouse gas emissions in the long term appears more feasible. That includes a post-coronavirus economic stimulus bill, which might have a green tinge, if not a fully green hue. The Obama administration’s stimulus package enacted 13 years ago in response to the Great Recession included some $90 billion in clean energy investments and tax incentives. Another candidate will be a future infrastructure bill, something both parties seem to recognize is important to upgrade aging U.S. infrastructure. This could include funding for improvements in the national electricity grid, which will be necessary to facilitate greater reliance on renewable sources of electricity generation.

Less Ambitious, But Bipartisan Climate Legislation

Finally, there are possibilities for less ambitious but bipartisan climate legislation, with stringency and scope much less than what Biden’s climate plan calls for. The key approaches here might involve tax incentives, that is, nearly every politician’s favorite instrument—subsidies. This may fit well with Biden’s moderate approach to governing and his stated desire to work with both parties in Congress. Specific bipartisan options could include (explicit or implicit) subsidies targeting wind and solar power, carbon capture and storage/utilization, nuclear power, technology initiatives, and electric vehicles via a rebate program.

But such modest, bipartisan initiatives are unlikely to satisfy either the demands of domestic climate policy advocates or international calls for action. Because of this, the new administration—like the Obama administration—may have to opt for regulatory approaches.

Possibilities for Regulatory Actions

The new president, under existing authority, could quickly take actions through executive orders in a number of areas to reverse many of Trump’s regulatory rollbacks. Will Democrats use the Congressional Review Act, which allows Congress to nullify a rule within 60 legislative days of its adoption? Republicans used this at the end of the Obama administration, but the law prohibits Congress from later adopting a regulation that is of “substantially the same form” as the disapproved rule unless it is specifically authorized by a subsequent law.

More generally, new oil and gas leasing on federal lands could again be prohibited, and the White House could attempt to block the Keystone XL pipeline from being completed. More promising, the president could direct that the social cost of carbon (SCC) be revised, presumably returning it to the Obama administration’s appropriate use of global (not just domestic) damages and a 3 percent (rather than 7 percent) discount rate in the calculations, thereby increasing the SCC from about $1 to $50 per ton, and directing federal agencies to use the revised SCC in their own decision-making. Presumably, the new administration will move to reinstate and surpass the Obama administration’s ambitious corporate average fuel economy (CAFE) standards, which is justified by the SCC.

Also, there is the possibility of using the authority of the Securities and Exchange Commission to use financial regulation of publicly traded companies to raise the cost of capital for fossil energy development, or to set standards for disclosure of climate-related corporate information. Likewise, the Commodity Futures Trading Commission has itself begun to explore options via its Market Risk Advisory Committee.

Thus, regulatory approaches under existing statutory authority through rule-making often appear to be an attractive option, but using new regulations under existing legislation rather than enacting new laws raises another problem—the courts. Rule-making entails lengthy notice and comment periods and requires extensive records and interagency consultation. Furthermore, rules are frequently subject to litigation. The Obama administration promulgated its Clean Power Plan after the Senate failed to deliver on the administration’s comprehensive climate legislation. And the Clean Power Plan was subject to a stay from the U.S. Supreme Court even before Trump entered office. Then Trump arrived and killed the regulation outright.

But the real challenge to the regulatory approach is that new regulations are much more likely to be successfully challenged in federal courts in 2021 than they were during the Obama years. This is partly because there are 228 Trump-appointed federal judges. But more importantly, the Supreme Court’s new 6-3 conservative majority is likely to favor a relatively literal reading of statutes, giving executive departments and agencies much less flexibility to go beyond the letter of the law or to interpret statutes in “innovative ways.” In particular, the Supreme Court may move to modify or even overrule the critical Chevron Doctrine, under which federal courts defer to administrative agencies when Congress was less than explicit on some issue in a statute (such as whether carbon dioxide can be regulated under sections of the Clean Air Act of 1970 intended for localized pollutants).

Other National and Sub-National Climate Policies

During the presidential transition, there has been considerable talk about a “whole of government” approach to climate change, in which the White House pushes virtually all departments and agencies to put in place changes that are supportive of decarbonizing the economy. This would be beyond or instead of the focused statutory and regulatory policies described above. Of course, the critical question is what such an approach can produce in terms of short-term emissions reductions and/or long-term decarbonizing of the economy. This is, at best, an open question.

Of course, even if little can be accomplished at the federal level over the next two to four years, surely the new administration will not be hostile to states and municipalities taking more aggressive action. Indeed, climate policies at the state level (California) and regional level (the Regional Greenhouse Gas Initiative in the Northeast) have become increasingly important, particularly during the four years of the Trump administration. Bottom-up evolution of national climate policy may continue to evolve from the Democratic-leaning states in the Northeast, Middle Atlantic, Upper Midwest, Southwest and West Coast (and Georgia!), which together represent more than half of the U.S. population and an even larger share of economic activity and greenhouse gas emissions.

A Note of Optimism for the Path Ahead

The new administration may or may not find creative ways to break the logjam that has prevented ambitious national climate change policies from being enacted (or, if enacted, to be sustainable). My greatest source of optimism is that the Biden-Harris team, in sharp contrast to the Trump-Pence administration, gives every indication that it will embrace scientific and other expertise across the board—whether that means the best epidemiologists and infectious disease experts designing an effective strategy for the coronavirus, or the best scientists, lawyers and economists designing sound climate policies that are also politically feasible.

Share

New Publication on Chinese Climate Change Policy

Readers of this blog need not be reminded that climate change is a global commons problem and therefore necessitates cooperation at the highest jurisdictional level – that is, international cooperation among national governments – if it is to be adequately addressed. This points to the key role for national governments to put in place meaningful public policies, consistent with international cooperation.

But sub-national governments can also significantly advance efforts to mitigate climate change. Provinces and municipalities around the world have indeed undertaken initiatives – sometimes working together across national boundaries – to reduce greenhouse-gas emissions. This includes jurisdictions in the largest-emitting countries – China, the United States, and India – as well as in the European Union.

A New Publication Now Available on the Internet

We – the Harvard Project on Climate Agreements (HPCA) – have just released a new volume that examines sub-national climate-change policy in China.  The volume focuses to a considerable degree on carbon-pricing policy in China, including how China’s sub-national (pilot) emissions-trading systems can inform the emerging national carbon-pricing system.

The briefs in this volume – edited by Dr. Robert Stowe and myself – draw on presentations and discussion at a research workshop organized by the HPCA in Beijing on July 18 – 19, 2019. The workshop was hosted and co-sponsored by Tsinghua University’s Institute of Energy, Environment, and Economy, directed by Professor Zhang Xiliang. Workshop participants included 24 researchers and practitioners from China, Australia, Canada, India, Norway, the United Kingdom, and the United States. Chinese participants were based in Guangdong Province, Hubei Province, and Shanghai, as well as Beijing.  The agenda and participant list for the workshop are included at the end of the volume.

The volume – and the July 2019 workshop – are part of a larger initiative of the Harvard Project on Climate Agreements examining and comparing sub-national climate-change policy in China, India, the United States, and Canada. The Harvard Project is conducting a similar workshop in New Delhi in the summer of 2020 and will release a volume of briefs on sub-national climate-change policy in India in early 2021.

Overview and Framing

The volume begins with a brief by Zhang Xiliang and Zhou Li that details policies adopted by Chinese provinces and municipalities to address climate change. Ye Qi and Xiaofan Zhao then describe what they see as the most important drivers of climate-change policy in China, providing context for the volume.

Institutional Perspectives

Next, institutional perspectives are provided in four briefs by experts on center-provincial institutional dynamics in China, with applications to climate-change policy. Michael Davidson explores China’s “quasi-federalist” system, and discusses how this system might be leveraged to develop effective institutions for addressing climate change. Gørild Heggelund focuses on China’s national emissions-trading system (ETS).

Tan Xianchun provides a concise yet detailed analysis of China’s administrative systems and procedures for addressing climate change – both carbon pricing and other approaches to reducing emissions, including the results of modeling that estimates the potential impact of a range of “[l]ow-carbon measures and policies” in Chongqing municipality and Guangdong Province.

Providing the final institutional perspective, Christine Wong discusses how the implementation and enforcement of environmental policy in China have evolved over the last decade. She finds that although the central government places greater emphasis on environmental policy than in the past and has provided considerable financial support for implementation and enforcement, renewed financial constraints in a period of low economic growth may prompt sub-national officials to favor carbon pricing over more traditional top-down policy approaches.

Emissions Trading Systems in China:  Lessons for National Policy Design from the Pilots

Three contributors examine lessons for national policy design from experience with the pilot ETSs. Shaozhou Qi assesses the performance of the seven pilot ETSs. Tian Qi provides insights based on his study of Hubei’s pilot ETS, focusing on allowance allocation, as well as the closely-related topics of auction design and market-stability measures. Zeng Xuelan examines a range of GHG emissions-reduction policies in Guangdong Province, noting that Guangdong’s pilot ETS has been its “main mechanism for reducing provincial emissions.”

Zeng also notes the possibility of the central government terminating Guangdong’s ETS after lessons have been incorporated into the national carbon-pricing system.

The fate of the pilot ETSs more broadly is the subject of Valerie Karplus’s brief. She discusses three scenarios: “(1) coexistence, that is, maintaining separate sub-national trading systems alongside the national system; (2) partial integration, which would mean allowing credits from one system to be used in other systems; and (3) full integration, which would involve subsuming the seven sub-national pilots under a single national ETS.” Karplus discusses the tradeoffs among these options and then suggests an approach to strengthening the pilot ETSs that is somewhat independent of the path chosen.

Designing and Implementing China’s National ETS

Four briefs focus on the development of the national carbon-pricing system, though in each case with some reference to the sub-national pilots. Pu Wang identifies a set of important challenges to the implementation of the national system, concluding in part – as did Heggelund – that “institutional capacity related to the carbon market needs to be significantly enhanced at all levels, from the central government to the local level.”

We Libo discusses the results of a modeling initiative that explores sub-national distributional impacts of various trading-intensity and allowance-allocation scenarios. Zhang Jianyu presents ten policy recommendations for the implementation of the national system. Among these, he suggests that the pilot ETSs can continue to play a useful role after the national system is implemented, and that the central government should continue to support the pilots.

Finally, Fei Teng examines the important relationship between the power sector in China and the performance of the national carbon-pricing system. The power sector is highly regulated, though the central government is pursuing market-oriented reforms. Teng presents three options for passing through higher electricity costs resulting from carbon-pricing to electricity consumers, with one option including trading in generation rights.

Comparative Perspectives on Sub-National Policy

The final section of the volume includes three briefs providing cross-national comparative context on sub-national climate-change policy.

Radhika Khosla writes on India, Robert Stavins on the United States, and Katie Sullivan and Ellen Lourie on Canada.

Final Thoughts

Each of the seventeen briefs in the volume begins with several key points, and the seventeen sets of key points are compiled immediately following an introduction. We hope that this structure renders the insights, research results, and analysis contained in the briefs more readily accessible.

The Harvard Project on Climate Agreements is grateful to the Harvard Global Institute, which provides generous support for the initiative of which this volume and the July 2019 workshop in Beijing are part. We are also grateful for our ongoing collaboration with Professor Zhang Xiliang and his colleagues – a collaboration that has yielded insights that we hope prove useful to researchers and policy makers working to address the problem of climate change.

Share

Sub-National Climate Change Policy in China

At a time when there are considerable political challenges in some countries (such as my own!) for national governments to institute meaningful climate change policies, the potential role of sub-national policies becomes more important than otherwise.  In other countries, sub-national climate policies may be a stepping stone to significant national efforts, as in China.  Partly with this in mind, the Harvard Project on Climate Agreements (HPCA) conducted a research workshop in July of this year on “Sub-National Climate Change Policy in China.”  Tsinghua University’s Institute of Energy, Environment, and Economy — directed by Professor Zhang Xiliang — hosted and co-sponsored the workshop, which was organized by my colleague at the Harvard Kennedy School, Dr. Robert StoweTwenty-seven experts from China, Europe, Canada, India, Australia, and the United States participated (see the photo below).  In addition, a group of students observed the workshop, and the Environmental Defense Fund’s China Program hosted a dinner for workshop participants.  The Harvard Global Institute provided major support for the project.  Here is a link to the full agenda (in both Chinese and English).

Background

Climate change is a global commons problem, and, as such, requires cooperation at the highest jurisdictional level — that is, international cooperation among national governments — if it is to be adequately addressed.  Participation by national governments is key, and sub-national governments can also play important roles. Provinces and municipalities around the world have undertaken initiatives — sometimes working together across national boundaries — to reduce greenhouse-gas emissions. These include jurisdictions in the largest-emitting countries — China, the United States, and India — as well as in the European Union.

The Workshop and its Analyses

Participants in the Beijing workshop examined how Chinese provinces and municipalities work with the central government to implement policy — and discussed challenges to such cooperation. They focused to a considerable degree on the implementation of China’s national carbon-pricing system, including approaches to integrating the seven pilot sub-national market-based systems into the new national scheme, scheduled to launch in 2020 (see “What Should We Make of China’s Announcement of a National CO2 Trading System?,” January 7, 2018).  Participants also addressed sub-national dimensions of other policy approaches to reducing greenhouse-gas emissions in China.

As we have done with previous HPCA research and policy workshops, participants in the Beijing event are now writing briefs on topics related to their respective presentations.  We will edit and compile these short papers in a volume to be released later this year.  In the meantime, you can view the PowerPoint presentations from the Beijing workshop:

  • China’s National Emissions Trading Program (Zhang Xiliang)
  • Ten Drivers Behind Climate Policy Making in China (Qi Ye)
  • Creating Sub-National Climate Institutions in China (Michael Davidson)
  • Multi-Dimension Post-Assessment of China’s ETS Pilots (Qi Shaozhou)
  • Political Economy Framework for Climate Change Policy in China (Christine Wong)
  • Canadian Climate Change Policy (Katie Sullivan)
  • Sub-National Carbon-Pricing Policy in the USA (Robert Stavins)
  • Integration of China’s National ETS with Provincial/Municipal Pilots (Valerie Karplus)
  • Introduction of Beijing ETS (Mei Dewen)
  • Sub-National Implementation Pathways for the National Pricing System (Goerild Heggelund)
  • Assessing Regional Implementation Pathways of National ETS In China (Wu Libo)

The Larger Context

The Beijing workshop was part of a larger initiative of the Harvard Project on Climate Agreements, supported by the Harvard Global Institute, examining and comparing sub-national climate-change policies in China and India. We will conduct a similar workshop in New Delhi next year.

The Harvard Project has previously conducted three workshops addressing climate-change policy in — or related to — China:

  • “Bilateral Cooperation between China and the United States: Facilitating Progress on Climate-Change Policy,” June 2015.  This was hosted by China’s National Center for Climate Change Strategy and International Cooperation (NCSC).  You can read more about this workshop here, and read the full workshop report here.
  • “The Design, Implementation, and Operation of China’s National Emissions Trading System,” December 2016.  Our host was NCSC.  The participants explored technical issues related to the design of China’s emerging national system, including allowance allocation, point of regulation, and price management.
  • “Cooperation in East Asia to Address Climate Change,” September 2017.  This was hosted by the Harvard Center Shanghai, and supported by the Harvard Global Institute. You can read more about the workshop here, and read the complete volume of briefs based on the workshop here.
Share