Biden team sees climate ‘emergency’ but powers are limited

Source: By Dino Grandoni and Anna Phillips, Washington Post • Posted: Monday, June 20, 2022

“In the end, this is an emergency,” the president’s top domestic climate adviser said.

TOPSHOT – US President Joe Biden reacts during a meeting on “the Build Back Better World (B3W)”, as part of the World Leaders’ Summit of the COP26 UN Climate Change Conference in Glasgow, Scotland, on November 2, 2021. – World leaders meeting at the COP26 climate summit in Glasgow will issue a multibillion-dollar pledge to end deforestation by 2030 but that date is too distant for campaigners who want action sooner to save the planet’s lungs. (Brendan Smialowski / AFP) (BRENDAN SMIALOWSKI/AFP via Getty Images)

With his climate legislation stalled and a Supreme Court case threatening his ability to regulate carbon, President Biden has been leaning more heavily than ever on his own authority to tackle climate change and address what he has called an “existential threat.”

“It’s been challenging,” Gina McCarthy, Biden’s national climate adviser, said in a recent phone interview. “But he’s been acting boldly and he’s not just been waiting around for Congress to act.”

Yet acting on his own to address climate change faces sharp limits in reality. Not only will it take time and money to fulfill Biden’s latest executive actions and kickstart clean-energy manufacturing, he will need help from Congress and private industry to do it.

“The bottom line here is that you’re starting from scratch, with no game plan and a lot of bureaucratic hurdles you can jump through,” said James Lucier, managing director of Capital Alpha Partners, an independent research firm.

The difficulty of using executive powers on climate could be brought into even sharper relief this month if the Supreme Court rules against rules issued by the Environmental Protection Agency during the Obama administration to regulate carbon emissions from power plants. If conservatives on the Court rule against the EPA, it would be a major setback for the federal government’s ability to limit greenhouse gas emissions with its own authority.

Biden’s recent use of a Cold War-era law to address today’s warming planet illustrates the difficultly of turning a president’s latest crop of ideas into reality when acting alone.

The White House announced earlier this month that it intends to allow the Energy Department to use the Defense Production Act to ramp up domestic manufacturing of solar panel parts, heat pumps, building insulation, fuel cells and other equipment needed to cut emissions from the nation’s power grid.

The law allows the government to issue loans to manufacturers, make direct purchases, and take other steps to expand production of sorely-needed goods. The move came less than three months after he invoked the law to boost mininglithium, nickel and other minerals crucial for electric vehicles.

But Biden still needs Congress to fund the clean-energy spending he wants to do under the law. The White House declined to say how much money it would request from lawmakers, but McCarthy said the plan “will require that Congress take action to actually cement additional increases in our budget.”

Any budget request needs to negotiate a nearly evenly divided Congress where Democrats cannot afford to lose any of their own party’s votes. One of the next funding opportunities will be the annual appropriations bill toward the end of the year.

Already, some Republicans are leery of supporting the use of a defense law in the name of climate change.

“The Biden administration’s expansive use of emergency authorities under the DPA is less about strengthening national security and more about subsidizing an anti-American energy resource agenda,” Cathy McMorris Rodgers (Wash.), top Republican on the House Energy and Commerce Committee, said after Biden’s announcement.

Still, the White House hopes invoking the law sends a clear signal to investors at home and allies abroad.

“His use of the Defense Production Act to accelerate all this domestic production is really, I think, going to be one of the ways in which this president makes it clear to people that he is going to keep driving the change that’s necessary,” McCarthy said.

The Defense Department routinely uses the law to compel companies to prioritize its orders, but it has other applications. The Trump administration turned to it to ease a shortage of N95 masks and, last month, the Biden administration invoked its powers to restock baby formula amid a nationwide shortage.

“The Defense Production Act is suddenly the flavor of the month,” Lucier said.

Yet when it comes to using the law to boost clean energy, details are scarce — and will require the cooperation of clean-energy companies.

The Solar Energy Industries Association, a lobbying group that represents the U.S. solar industry, has offered ideas to the White House about using the Defense Production Act in the past, such as a low-cost loan program.

But John Smirnow, the association’s vice president of market strategy and general counsel, said last week he hasn’t talked to the Biden administration about its plans since the announcement.

“Triggering the authority of the Defense Production Act is not in and of itself going to lead to a whole host of investments in the United States in manufacturing overnight,” he said. “It’s going to take time.”

Stephen R. Yurek, president and chief executive of the Air-Conditioning, Heating, and Refrigeration Institute, a trade association, said makers of heat pumps are still waiting for the White House’s plans to take shape.

“They don’t have much detail on what they’re thinking or where they’re going to go,” Yurek said.

Now that they have this new authority, White House officials said they plan to hold meetings with industry groups, labor unions and others to determine how to ramp up production rapidly and regain some of the manufacturing capacity ceded to other countries.

A big focus of the Biden administration’s executive actions is making more heat pumps, which can warm and cool homes more efficiently than traditional furnaces and air conditioners.

One major challenge to manufacturing them today is a global shortage of microchips, which has forced some manufacturers to leave almost-finished units sitting in warehouses, waiting for one or two parts to arrive before they can be shipped. CEOs are spending most of their day on the phone “begging and pleading for different parts,” Yurek said.

Under the Defense Production Act, Biden could direct chip manufacturers to prioritize the delivery of their products to companies like Carrier and Trane that make heat pumps.

But even if the government boosts supply, it faces other obstacles to widespread adoption. While more energy-efficient than traditional air conditioners and furnaces, electric heat pumps are typically more expensive, limiting their appeal. And if the U.S. is going to have more heat pumps, it’s going to need more installers, currently in short-supply.

“If we ramp up, we need to make sure there’s a market,” Yurek said. “The question is: Where do those extra heat pumps go and how do they get installed?”

One idea favored by climate advocates is to send them to Europe, where they could slash the continent’s dependence on Russian gas. But when asked about the chances of this happening, Yurek said “zero.”

American and European heat pumps are built to different specifications, he said. While heat pumps made in the United States are usually designed for ductwork, European models are typically ductless. Moreover, many U.S. heat pump manufacturers already have facilities in Europe that produce units designed for those country’s markets. Making them in the U.S. and shipping them overseas would drive up the cost, Yurek said.

Despite the challenges, the administration’s announcement was a victory for Biden’s environmentalist allies after months of disappointment.

“I think it was really important that the climate movement have a win,” said Leah Stokes, a senior policy counsel for the climate advocacy group Rewiring America and a professor of environmental policy at the University of California at Santa Barbara. “This was very politically smart and it addressed a big problem.”

That problem was a Commerce Department investigation into alleged dodging of tariffs by Chinese solar panel makers. The inquiry had paralyzed much of the industry and threatened to go on for months, leading to canceled or delayed projects that would severely hamper the country’s ability to transition away from fossil fuels. To get back on track, the president’s order exempted certain imported solar panels from tariffs for two years.

Whether the president’s use of executive authority to spur clean-energy manufacturing lowers emissions remains to be seen. Experts have said that if the United States were to meet its goal of cutting emissions in half by 2030, it will need record-breaking construction of new solar and wind farms each year. Temporarily suspending the solar tariffs allows the industry to grow.

But for transformational change, advocates said they are focused on trying to pass the $555 billion in climate programs that were originally in the Democrats’ “Build Back Better” bill.

“If this was a little appetizer or an amuse bouche, that is the main course, that’s the big meal right there,” Stokes said.

While the solar industry appreciates the recent executive moves, representatives said one of the best thing the Biden administration could do is convince Congress to pass tax incentives for manufacturing solar panel components domestically.

“That’s what would lead to a renaissance in U.S. solar manufacturing,” Smirnow said.

Talks between Sen. Joe Manchin III (D-W.Va.) and other Democrats over passing Biden’s $2 trillion “Build Back Better” bill fell apart bitterly at the end of last year. For now, negotiations over the clean energy tax credits have restarted slowly.

“Everything’s been respectful,” Manchin said last week. “There’s not a whole lot going on.”

Other presidents have turned to executive actions after hitting roadblocks in Congress. After a cap-and-trade bill died during its first term, the Obama administration issued the Clean Power Plan to set the nation’s first limits on carbon pollution from the power sector.

But it didn’t last. In 2016, the Supreme Court blocked the EPA regulation. Three years later, the Trump administration finalized its rollback.

Today, EPA officials are considering new power plant regulations. But conservatives on the Supreme Court appeared skeptical of allowing the agency to go forward with sweeping carbon rules without more input from lawmakers. The high court is expected to issue a ruling in the coming days in a case led by coal-rich West Virginia.

McCarthy said the EPA, which she ran under Barack Obama from 2013 to 2017, is following the case closely.

“There are many ways in which we can achieve the goals that the president has set out,” she said. “No matter what the Supreme Court decides, we’re going to have a plan.”

The Post previously reported that McCarthy is preparing to leave her position, though the exact timing of her departure remains unclear.

Collin Rees, a campaigner at Oil Change U.S., said Biden’s recent use of the Defense Production Act is a “step in the right direction,” but he would like to see Biden formally declare climate change as a national emergency.

“The president and the executive branch have tremendous power,” he said. “To date we have not seen the president use that power. That has been a big mistake.”

Declaring climate change an emergency, Rees said, would allow Biden to tap additional powers, such as placing a moratorium on oil exports.

For her part, McCarthy said Biden turned to the national defense law because the need for clean energy is so urgent. “In the end,” she said, “this is an emergency.”

Maxine Joselow contributed to this report.