On Earth Day, April 22, President Biden will launch a two-day Leaders Summit on Climate, a key lead-up meeting to this November's United Nations climate talks in Glasgow. The President invited over 40 world leaders to the virtual summit, during which the U.S. is expected to unveil its new "Nationally Determined Contribution" (NDC) under the Paris Agreement, including an economy-wide greenhouse gas (GHG) reduction target, among several major commitments to curb global climate change. In the days leading to the Summit, John Kerry, the U.S. Special Presidential Envoy for Climate, met with officials in Europe, China, South Korea and elsewhere to garner support for the Biden-Harris administration's ambitious climate agenda.
Akin Gump will track developments at and around the Summit closely and publish our analysis of the Summit's outcomes on our Speaking Sustainability blog.
Below are some key issues to follow:
A New U.S. NDC Under the Paris Agreement
- The administration has pledged an "ambitious" update. While the GHG reduction target is fundamental, the granularity of the roadmap for achieving this target is tantamount. Reports have grown that President Biden will pledge to cut GHG emissions by at least half by 2030.
- Pressure had been peaking for the U.S. to reduce its GHG emissions by 50 percent below 2005 levels by 2030. For example, over 300 companies—including Apple, Google, Microsoft, Walmart and Starbucks—and dozens of European leaders recently called on the U.S. to pledge a 50 percent by 2030 target, as did over 1,500 scientists, who unsurprisingly emphasized reductions from the transportation and power sectors.
Updated NDCs from Other Summit Attendees
- The State Department described the Summit as an opportunity for leaders of the 40 attending countries to reveal new NDCs in line with the goal of collectively preventing a 1.5-degree Celsius rise above pre-industrial levels.
- John Kerry's visit to China last week yielded a rare statement of cooperation that the countries would work to "raise ambition in the 2020s," but it could be difficult for China to announce a new target outside of its already-formalized 14th Five-Year Plan. On that same trip, John Kerry lobbied India to set a net-zero goal, but India made no such commitment, and its Minister of Environment emphasized the need for leadership by the world's biggest historical emitters. And the U.S. has been in negotiations with Brazil to put a stop to the deforestation of the Amazon, but an agreement is not expected before the Summit due to a stalemate over upfront foreign aid.
- Though some attendees have already announced their targets—including the United Kingdom, which proposes to reduce emissions by 63 percent below 2005 levels—other big announcements to watch for include those of Canada, South Korea and Japan. Many are calling on these countries to join the so-called "50 Percent Club," agreeing to the above-mentioned target of cutting emissions by at least 50 percent below 2005 levels by 2030. Japan is almost certain to make such a commitment, and South Korea and Canada are poised to announce stronger targets at the Summit.
Climate Change Mitigation Financing
- Attendees include leaders from some small island and low-income nations whose major concerns include their need for climate resiliency aid from developed countries. President Biden's budget proposal included $1.2 billion for the U.N. Green Climate Fund, which helps support developing countries' climate change mitigation and adaptation projects. That falls well short of the $3 billion Obama pledged during his presidency, $2 billion of which is still outstanding.
- Likewise, developed countries pledged in 2009 to jointly mobilize $100 billion per year by 2020 to aid developing countries in their climate endeavors, but have also fallen short. Leaders from the island and low-income nations will likely continue to pressure high-income Summit attendees to make good on their financing commitments, particularly since the pandemic has exacerbated the financial stresses of those island and low-income nations.
Additional Financing Announcements
- South Korea is expected to announce a ban on coal financing, which is notable given the country is the third-largest financier of overseas coal projects, and there is mounting pressure for the U.S. to do the same.
- The U.S. Treasury Department will reveal a plan for distributing billions of dollars in climate change mitigation and clean energy development aid to developing countries.
- President Biden is expected to issue an executive order on climate-related risks. The order would require federal agencies to develop a government-wide strategy on climate-related risks for public and private financial assets within 120 days.
- According to the U.S. Environmental Protection Agency (EPA), transportation is the single largest driver of U.S. GHG emissions.
- The Trump administration's EPA and the National Highway Traffic Safety Administration (NHTSA) finalized rules that: (1) revoked a Clean Air Act waiver allowing California to implement its own standards for motor vehicle GHG emissions and (2) established less restrictive GHG emission standards for 2021-2026 model year cars and light-duty trucks than those established under President Obama.1
- President Biden's Day One Executive Order directed the EPA to complete a review of these rules by April 2021 (waiver revocation) and July 2021 (GHG emission standards).
- Accordingly, on or around Earth Day, we expect the Biden-Harris administration to announce its plan to rescind that rule and begin a process to reinstitute California's waiver.
- We do not expect an announcement this week regarding the interim or new GHG emission standards. That announcement likely will come in July. Based on EPA Administrator Michael Regan's recent statements, we expect that the replacement standards will be at least as stringent as those established by a landmark agreement between California and five prominent automakers.
Power Plant Emissions
- The EPA estimates that the electric utility sector produces the most GHG emissions in the United States, after transport. The Biden-Harris administration set a goal to achieve a "carbon pollution-free power sector by 2035" as part of a broader goal to reach a "net-zero economy by 2050."
- In 2015, the EPA finalized the Clean Power Plan, the country's first nationwide standards to reduce carbon pollution from power plants. In January 2019, the Trump administration's EPA rescinded the Clean Power Plan and replaced it with the Affordable Clean Energy (ACE) Rule, but the D.C. Circuit vacated both the rescission rule and the ACE Rule in January 2021, essentially leaving no regulations in place.
- Regan has indicated that the EPA plans to promulgate new power plant regulations, but it is not clear whether the Biden-Harris administration will make any concrete announcements this week given its relative silence vis-a-vis the coal industry, the rule's inherent complexity, the inevitable industry pushback and the careful legal strategy needed to survive the Supreme Court's eventual review.
Methane Emissions from Oil and Gas
- During the 2020 campaign, President Biden pledged to require "aggressive methane pollution limits for new and existing oil and gas operations."
- In September 2020, the EPA finalized a rule that: (1) removed oil and gas transmission and storage facilities from the categories of sources subject to Obama-era standards for methane and volatile organic compound emissions, (2) rescinded those standards and (3) rescinded the methane-specific requirements of those standards applicable to oil and gas production and processing facilities. The rule also established a new procedural requirement for the EPA to meet before it can promulgate new standards for some air pollutants.
- President Biden's Day One Executive Order directed the EPA, by September 2021, to reconsider the rule and propose new regulations that set performance and emissions standards from existing oil and gas operations (including exploration and production, transmission, processing and storage activities). The President's infrastructure plan also calls for Congress to provide funding to plug orphan oil and gas wells, targeting another source of the industry's methane emissions.
- Congress plans to invoke the Congressional Review Act to cancel the Trump-era rule, in which case the EPA would not need to use the rulemaking process to rescind it (but also could not impose a rule "in substantially the same form"). Notwithstanding the potential for Congress to reject the rule, President Biden's executive order gives the EPA until September 2021 to propose new methane regulations. Thus, we will not see a new proposed rule this week, but we expect the Biden-Harris administration to make an announcement on Earth Day that outlines its overall approach to reducing air emissions, including methane. That approach could answer calls from environmental groups to set economy-wide methane emissions reduction targets.
Climate change is taking center stage in Washington, D.C. this week-as it has throughout these first hundred days of the Biden-Harris administration—in unprecedented ways. The federal government, civil society, and an ever-increasing swell of U.S. business and industry appear to be pulling together toward a low-carbon economy. The release of the NDC and other actions during the coming days should offer critical details the U.S. plans to catalyze actions to achieve its lofty climate aspirations at home and abroad.
1. The D.C. Circuit recently issued a stay in the litigation surrounding the revocation of California's waiver based on the agencies' reconsideration.
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