President Joe Biden promised the most ambitious green agenda ever, ending fossil fuels, pushing renewables, and forcing business to toe the line. As Earth Day 2022 arrives, the Washington Examiner offers alternative coverage in light of record energy prices and widespread criticism of the administration’s incoherent policy approach.
In one of his first acts in office, President Joe Biden signed an executive order for a “whole of government” approach to combating climate change, drawing in not just the Environmental Protection Agency but a host of federal entities.
Later, he signed a second order mandating that agencies address financial risks stemming from climate change, further bringing financial agencies that in the past have had little to do with the environment, such as the Securities and Exchange Commission, into the center of the green effort.
The rules and regulations that result are bound to create major new obligations for businesses and massive amounts of red tape. For this Earth Day, the Washington Examiner has rounded up the most significant agency actions below.
Environmental Protection Agency: Last November, the EPA proposed new, tougher rules to curb emissions of methane, a potent greenhouse gas.
The EPA said the proposed rule “would reduce 41 million tons of methane emissions from 2023 to 2035, more than the amount of carbon dioxide emitted from all U.S. passenger cars and commercial aircraft in 2019.”
EPA officials acknowledged the rule, established under the Clean Air Act, would temporarily dent oil and gas output, although it also stressed any effects from the regulations would be “minimal.” Regulating methane would require producers to do more to detect and repair leaks, although key big company players have come out in support of such a rule.
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EPA officials estimate the tougher methane rules would cost roughly $1.2 billion annually, a cost that would be spread across hundreds of thousands of wells.
Meanwhile, EPA and the Army Corps of Engineers announced last fall a proposed rule that would undo a Trump-era rollback of water regulations, bringing back the “waters of the United States” designation put in place under former President Barack Obama. The EPA said the new definition would be updated to reflect Supreme Court decisions, and the high court is positioned to rule on the definition. Critics of the Biden administration approach say that it will mean regulating small waterways and puddles, requiring many people to get a permit from the Army Corps of Engineers before building on their own land and incurring huge legal fees.
The EPA also announced in March that it is proposing new regulations to limit downwind smog pollution from electricity generating stations and other industrial facilities under the Clean Air Act’s “good neighbor” provision. The proposal targets emissions of nitrogen oxides in particular and would subject additional power plants and “non-electric generating units,” or industrial facilities such as cement manufacturers, to tighter emissions standards.
Department of Transportation: The National Highway Traffic Safety Administration issued “Corporate Average Fuel Economy” standards earlier in April requiring passenger cars and light trucks to achieve an average 49 miles per gallon economy for all new makes beginning in model year 2026.
The NHTSA’s standards also require average fuel efficiency to increase 8% annually for model years 2024 and 2025 for the same vehicle types and 10% annually for model year 2026. The NHTSA’s rule mirror EPA’s own standards, finalized in December, to reduce tailpipe emissions. Sixteen states, along with ethanol and other fuel industry groups, challenged the EPA rule in court.
Transportation Secretary Pete Buttigieg said the rule would stop 5.5 trillion pounds of carbon dioxide from entering the atmosphere through the midcentury.
Environmental groups praised the new standards, saying they would help to slow climate change from the top-emitting transportation sector.
The department said its final rule “would increase costs to manufacturers for adding technology necessary” for them to comply with the standards and that “manufacturers are assumed to transfer these costs on to buyers by charging higher prices,” although it expects consumers to achieve longer-term net savings under the rules.
Some have warned about the added costs’ pressure on vehicle prices. The industry, though, has not uniformly opposed the Biden administration’s pursuit of tighter fuel economy regulations. The Alliance for Automotive Innovation said in a court filing earlier this month that the EPA’s newest fuel economy rule “will challenge the industry” but provides automakers with “critically important flexibilities.”
Department of Energy: The Department of Energy has charged ahead with several energy efficiency initiatives designed to reduce energy consumption, thereby reducing the amount of fossil fuels needed to be burned to generate electricity — but also placing burdens on households and manufacturers.
The department issued a final rule in January to replace Trump-era changes that had established new “normal cycle” product classes for residential washers and dryers, meant to allow for dishwashers and clothes dryers with shorter cycle times.
New rules the department proposed in March would also subject manufacturers of pool heaters and residential air conditioners to tighter efficiency standards.
The proposals would require more cooling per unit of energy from room air conditioning units and more efficient heating from gas-fired and electric pool heaters.
The department said the rules would save consumers money over the life of the products in question, but it estimated the rules would add new compliance costs of $22.8 million for the air conditioning manufacturers and approximately $38.8 million for the consumer pool heater industry.
The Securities and Exchange Commission: The SEC is one of the financial agencies most prominently pushing for Biden’s climate agenda. The SEC has proposed a rule that would force companies to disclose climate-related risks, something that would lead to indirect pressure on the private sector to reduce carbon emissions and turn away from fossil fuels.
The rule, which was passed 3-1 with the sole Republican SEC commissioner dissenting, dictates that companies must report direct and indirect greenhouse gas emissions. That would impose major paperwork obligations. Even more significantly, though, it would open the door for activist investors who are not pleased with a company’s climate disclosures to push for changes.
The proposal has been praised by Democrats who see it as a welcome step toward decarbonizing the economy but panned by Republicans who see it as overreach by an unelected federal agency and a means to dictate climate policy without legislative approval. It will likely face lawsuits given opposition from the Right and the fossil fuels industry.
The Federal Reserve: The Federal Reserve, tasked by Congress with controlling the money supply and regulating big banks, has been brought into a climate change role. Some regional Fed banks have dedicated research resources to the matter. More significantly, however, the central bank has moved toward overseeing banks’ exposures to climate-related risks, a step that would put financial pressure on the use of fossil fuels.
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For the first time, the Fed’s financial stability report last year mentioned climate change as a source of concern. The stability report didn’t mention action on the matter, but it did show that the risks associated with climate change are on the mind of Fed officials.
“Federal Reserve supervisors expect banks to have systems in place that appropriately identify, measure, control, and monitor all of their material risks, which for many banks are likely to extend to climate risks,” the report said.
