The Change of Environmental Policies in Biden's New America

The Change of Environmental Policies in Biden's New America

15th Kim minseo, 17th Seo yookyung, 17th Lee Myunghyun, 17th Joo hyungjoon, 18th Kim chaeyeon

 

In June 2017, the U.S., led by President Donald J. Trump, withdrew from the ‘Paris Climate Agreement’. This move drew heavy criticism of the United States for its decision to abandon its responsibility as an energy-consuming and powerful nation. Meanwhile, Democrat Joe Biden, who ran for president in 2020, referred to himself as a "climate change pioneer" and showed his determination to take the lead in tackling climate change.

Biden inherited some of Obama's eco-friendly policies in his promises. In addition, Biden's own pledges are expected to play a major role in going to the eco-friendly U.S.

The United States, which has already taken a regression path in responding to climate change, has decided to see how much it can regain and develop its position by President Biden.

1. Policies from Barack Obama

1) Reinstate to increase the fuel economy of cars

Shortly after his inauguration, former U.S. President Obama announced the "New Energy Declaration for the United States" (2008.1.21). This expressed a commitment to a comprehensive and long-term strategy on climate change and energy.

One specific policy is strengthening the Corporate Average Fuel Economy (CAFE). CAFE is a regulation that requires the average fuel economy of cars sold by an automaker to be met by each manufacturer, and the new regulation has been in effect since 2012 to achieve 35.5 mpg (approximately 15 km/l) by 2016.

But this policy was suspended by former President Trump. However, with Biden's election, CAFE is more likely to be implemented as scheduled. The Trump administration has lowered the fuel efficiency regulation, which is expected to increase by 5% per year by 2026, to 1.5% per year, but Biden is expected to raise it to the 5% level again.

[Fig 1. Korea-USA Fuel Efficiency Standards of Cars]

Source: 파이낸셜뉴스

 

2) Reinstate of the shale gas development management bill

The Obama administration allowed the Environment Agency to regulate greenhouse gases as pollutants under the existing Clean Air Act on Dec. 7, 2009. The Clean Air Act, enacted in 1963, stipulates that the government can regulate air pollutants. In 2007, the U.S. Supreme Court ruled that greenhouse gases were also air pollutants subject to the Clean Air Act. But before the Obama administration, no follow-up measures have been taken, such as determining the risks.

Shale gas is a gas in which solid hydrocarbons are buried in sedimentary rock (shale) layers, which is called nontraditional natural gas because they are collected from rock layers that are different from traditional gas fields. Shale gas consists of 70 to 90 percent methane used for heating and power generation, 5 percent ethane, a petrochemical raw material, and 5 to 25 percent condensate used in LPG manufacturing. It can be used as a heating fuel or petrochemical raw material because it has the same chemical composition as existing gas that is mined in oil fields or gas fields.

[Fig 2. Shale gas and natural gas mining process]

Source: 한국경제

 

The problem with shale gas is that the extraction process produces a lot of methane gas. Shale gas is extracted through the fracking method, which many scholars have expressed concern, such as the generation of methane gas and weakening of the ground.

In response, Biden put forward a carbon adjustment tax and a quota. Carbon adjustment tax is levied on the use of fossil energy such as oil and coal that emit carbon dioxide.

Biden said, "As the U.S. has taken measures to make pollutant emission entities (such as companies) bear the overall cost of pollution, we will impose a carbon adjustment tax or quota on carbon-intensive products in countries that do not meet climate and environmental obligations." Such measures will ensure that U.S. workers and employers are not placed in adverse competition and encourage other countries to raise the level of climate response, he explained.

 

3) Extend tax benefits for companies installing renewable energy generator

The Obama administration has included the green growth sector related to climate change in its stimulus package to pull it out of recession. In other words, the government prepared the 'The American Recovery and Reinvestment Act,'worth $787.2 billion, which is required to support fiscal expenditures of $5753 billion and tax cuts of $211.8 billion for the 11th year of 2009-2019. Among them, a total of $65 billion ($43 billion in fiscal spending and $22 billion in tax cuts) was supported to the green energy sector, about 8.4 percent of the total stimulus.

[Fig 3. The scale of the Obama government spending on clean energy] 

Source: 한경비즈니스

As an extension, Biden plans to focus on supporting the middle class and investing in eco-friendly infrastructure, including the introduction of a wealth tax for super rich people. He promised to invest $2 trillion in eco-friendly infrastructure investment for four years.

4) Rejoining the Paris Agreement

One of Joe Biden's major environmental policies is rejoining the Paris Agreement. The Paris Agreement is a global agreement that former president Barak Obama has participated. Former president Donald Trump declared withdrawal to this agreement since he claimed that this policy hinders economic development of the United States. 

As Joe Biden is now the policy maker, he stated that America should be a new leader of eco-friendly growth. To do so, he proposed to immediately join the Paris Agreement and play an important role in it.

 

[Fig 4. United Nations Framework Convention on Climate Change(UNFCCC)]

Source : UNFCCC

At the Rio Summit in June 1992, the UN proposed a new policy called the ‘United Nations Framework Convention on Climate Change(UNFCCC)’. This policy was made to stop countries from emitting too much greenhouse gases and set up restrictions to do so. This gave birth to the Kyoto Protocol in 1997, and with further adjustments, it led to the start of the Paris Agreement in 2015.

The Paris Agreement’s focuses on the temperature increase of Earth. Its main goal is to ensure this temperature increase does not exceed two degrees celsius and try to lower this value by 1.5 degrees celsius in the near future. To achieve this goal, all nations should follow ‘CBDR’. This CBDR is a shortened acronym of ‘Common But Differentiated Responsibilities’, so all nations should try their best by considering their country’s conditions.

 

[Fig 5. NDC policies for major UN countries]

Source: 한국기후변화학회지

To achieve CBDR(Common But Differentiated Responsibilities), each country has to set their own goals. This concept is called NDC(Nationally Determined Contribution). NDCs should be made in all countries, and this includes developing countries. For the Kyoto Protocol, only rich and well developed countries were responsible for this problem, but now we must face that all countries including developing countries must work together for this common goal. 

 

Right now, America is emitting 14~15% of total emissions of greenhouse gases in the world. This is second best in the world, and this shows that America should act their way in order to solve this problem. However, this also means that the remaining 85% should also be taken into consideration, which means that other countries are also responsible. They should also work together in order to make America’s work meaningful to Earth. This is why rejoining the Paris Agreement is very important in Joe Biden’s overall environmental policy.

 

5) Policies on Coals

[Fig 6. Sept. 29, 2020, in Cleveland, Ohio. President Live Debate]

 Source: Youtube

President Joe Biden has stated that “No one is going to build another coal plant in America!” on December 6, 2019 during his interview about the Paris Agreement.

Of course, this was striking news for many people including people in the states of West Virginia, Pennsylvania, Ohio and Kentucky. These states had many people who are working in the coal industry, and this news made them angry. The Joe Biden administration quickly announced that it was a mistake and the energy policy of Joe Biden will try a gradual shift until 2050.

Experts now claim that Joe Biden’s ‘mistake’ might not be a hoax. He would have claimed it a mistake to ensure his voters. Even though the coal industry may not have a direct closure, experts think the coal industry will face a gradual decline due to Biden’s environmental policies.

Former president Donald Trump has tried to make an economic comeback in the coal mining business. His policies focused on excluding various restrictions that were related to preserving the environment, and this led to increased profit of coal business. However, now that Joe Biden has become the next president, this comeback will stop. 

One of the biggest obstacles of the coal business is the huge decline of its demand. As Joe Biden became president of the US and is promoting green development, the global interest towards alternative energy has increased. Joe Biden promotes the entire world to join the green energy campaign, so the demand for coal will gradually decline.

 

[Fig 7. Stock prices of ESG companies increasing]

Source: 네이버 금융

This change of demand is well shown in the field of ESG(Environmental Social and Governance) investments. People are now trying their best to invest in the future. One example can be the sudden incline of SK Innovation stock prices. Many other South Korean ESG companies are experiencing such inclination as well.

The profitability is also a huge concern. The United States has high labor costs, so this makes the overall cost of coal to increase. In addition, the major market of the coal industry is focused on Asian countries, meaning that they have high transportation costs as well. Due to these cost problems, Australia has risen as a strong rival in the coal industry. Australia is closer to Asia, and they have lower labor costs as well.

Joe Biden’s tax policies are also a huge threat to the coal industry. Biden announced corporate taxes to increase from 21% to 28%. Taxation for exports would also increase from minimum 10.5% to 21%. This would lead to less profit of coal companies.

 

6) Preserving National Parks

[Fig 8. Joe Biden working on reconstruction of the Yellowstone National Park]

Source: The White House Archive

The Yellowstone National Park in the state of Wyoming, United States is one of the most famous tourist sites in the US. This gigantic national park that has been named as a UNESCO World Heritage site in 1978 is famous for its huge geysers and its diverse wildlife. Old Faithful geyser, which is the most famous geothermal feature, is still one of the most popular tourist attractions inside Yellowstone National Park.

Sadly, there are some rumors that we might have to ban tourists from coming to this beautiful place due to the continuous damage being done by the tourists. This problem is not only occurring in Yellowstone National Park alone. Huge numbers of National Parks are continuously being damaged by human beings. Due to these arising problems, former president Barak Obama and former vice president Joe Biden have spent a lot of money to save and preserve these national parks.

Now that Joe Biden has become a newly elected president of the United States, he promised a continuous investment on 422 national parks all across America. Barak Obama has spent more than 862 billion dollars on national parks, Joe Biden will continue on this project as well.

2. Joe Biden's Own Policies

 

1) Biden will hold a climate world summit 

Firstly, Biden pledged that he will hold a climate world summit with leaders from around the world. This corresponds to the influence the United States exert on the whole world. This pledge is a message that Biden will take one step further from rejoining the Paris Climate Agreement to fight against climate change more actively. What Biden is trying to discuss through the climate world summit is the establishment of a more ambitious national goal than the commitments each country already made. Especially, he pointed out China and announced that he will not permit any longer whatever activity undermining climate effort that we’ve done so far. Eventually the main purpose of the summit seems to be to protect America’s domestic industry that is trying to convert to renewable energy from China. In his presidential election pledge, Biden criticized China’s economic development movement that doesn’t consider climate change. Especially he mentioned he will restrict China’s subsidy policy for the coal mining industry.

South Korea recorded 727.6 (1Mt/CO2 eq) of greenhouse gas emissions in 2018, and it is a figure showing us that we are the world’s 11th-largest emitter of greenhouse gases. Thus it is anticipated that Korea will also be a member of the summit that Biden pledged. In his pledge, Biden said he will regulate Asian countries, including China, which invest in the coal mining industry. Therefore South Korea have to prepare for this regulation from the Biden administration. However, on the one hand, the Moon Jae-in administration and America’s new Binden administration in common have put forward the Green New Deal as their main policy. In light of this, Korea government will be on terms of friendship with the government of the U.S.. South Korea might establish friendly relations with the U.S. Government. We should wait and see how Korea establishes a relationship with the U.S..

 

2) Net-Zero policy

Biden’s Net-Zero policy will be based on the principles that polluters must bear the full cost of the carbon pollution they are emitting and that our economy must achieve ambitious reductions in emissions economy-wide instead of having just a few sectors carry the burden of change. Notwithstanding the progress have been made in reducing emissions in the power sector, fossil fuels still comprise nearly 80% of global energy use. Today, USA is on the cusp of breakthroughs in technologies, such as batteries that can more efficiently store energy, more efficient controls and sensors for advanced manufacturing, more effective and thinner insulation for buildings, and cybersecurity improvements to make smart grids more resilient to attacks.
To accelerate this progress, Biden will make the largest-ever investment in clean energy research and innovation. The Biden plan will double down on this approach to create the industries of the future by investing $400 billion over ten years. This investment will enable us to develop new technological break-throughs that will create jobs and drastically reduce emissions.

The USA will not only develop eco-friendly energy to reduce greenhouse gases, but also encourage other countries beyond the U.S. to cut carbon emissions. As the U.S. takes steps to make domestic polluters bear the full cost of their carbon pollution, the Biden Administration will impose carbon adjustment fees or quotas on carbon-intensive goods from countries that are failing to meet their climate and environmental obligations. Biden will also condition future trade agreements on partners’ commitments to meet their enhanced Paris climate targets. Penalty is present if the legally binding emission reduction targets are not followed. It is also focusing on China, the world's largest carbon emitter, Biden will rally a united front of nations to hold China accountable to high environmental standards in its Belt and Road Initiative infrastructure projects, so that China can’t outsource pollution to other countries.

[Fig 9. Greenhouse gas reduction according to the Sustainable Development Scenario]

Source:  Wood Mackenzie

 

3) Economic plan to cope with Corona Virus

According to KIEP, the Democrats are claiming that $3 trillion plan is needed to stimulate the economy against Corona virus, which is about three times larger than Trump’s current $1 trillion policy. The amount of money Biden invests to the clean energy and infrastructure is $2 trillion, which will be raised by increasing corporate income tax rate and producing stimulus money. This money will be distributed over 4 years to 5 sectors : infrastructure, clean vehicles, electricity, buildings, and clean energy. The climate plan announced in June last year was to spend $1.7 trillion over 10 years. This time the plan was upgraded in terms of size and period.

Instead of banning fossil fuel generation or prohibiting fracking, Biden is going to support constructing millions of solar panels and tens of thousands of wind turbines, preserve nuclear plan, and support carbon capture.

Biden’s policy is not sufficient to accomplish Congress progressives’ target to get to net zero green house gas emission by 2030, but it coincide with House Speaker Nancy Peolsi’s climate bill to reduce emission to zero by 2050. In electricity generation, Biden plans to terminate fossil fuel generation by 2035 which is 5 years faster than House democrat’s proposal.

Repulicans pointed out that Biden’s plan will result in higher energy prices, and the president of Western Energy Alliance which represents gas and oil companies criticized that Biden’s plan is unrealistic.

 

 4) Building energy efficiency

Biden will set a target of reducing the carbon footprint of the U.S. building stock 50% by 2035, creating incentives for deep retrofits that combine appliance electrification, efficiency, and on-site clean power generation. He will work to identify barriers to help offset the upfront cost of building upgrades and put in place a national program to target a package of affordable energy efficiency retrofits in American homes. He will direct the U.S. Department of Housing and Urban Development to make housing for low-income communities more efficient. He will direct the U.S. Department of Energy to redouble efforts to accelerate new efficiency standards for household appliances and equipment. And, he will repair and accelerate the building code process and create a new funding mechanism for states and cities to adopt strict building codes and train builders and inspectors.

Creating 1 million jobs upgrading 4 million buildings and weatherizing 2 million homes over 4 years. It is expected that this will not only create jobs but also reduce electricity bills. Paired with legislation to set a new net-zero emissions standard for all new commercial buildings by 2030, these steps and critical investments in the Build Back Better Plan will accelerate progress to Joe Biden’s target of cutting the carbon footprint of our national building stock in half by 2035.

 

5) Climate Disclosure Policy

According to S&P Global, Biden is going to proceed with the policy which oblige the publicily traded company to disclose their information about the greenhouse gas emissions generated during the process of production and business administration, which enables the investors to make climate-friendly investments. Biden announced that he will direct the U.S. Securiteries and Exchange Commission(SEC) to make it a mandatory for public companies to disclose climate related information. By doing this not only the public corporations but also the banks that invest in the greenhouse gas emitting corporations would be subject to strengthened scrutiny by the SEC.

In the past more and more companies had decided to disclose their climate informations, but investors have criticized that those disclosures are not consistent enough to make a comparison between corporations or industrial sectors. In 2018 many institutions, researchers, and asset managers has submitted a petition to SEC which states that the information about public corporation’s environmental, social and governance information should be disclosed. This means that to make public corporations to open up enough information needed to make a investment decision, it is not enough for the investors to give pressure. If the SEC make it obligatory for public corporations to disclose climate information, then it will be available to make an eco-friendly investment. Also this would cultivate an environment where public corporations make voluntary efforts to reduce greenhouse gas emissions.

 

6) Realizing Environmental justice  

To summarize Biden’s presidential election pledge in one phrase, it is ‘plan for  a clean energy revolution and environmental justice’. It shows how much Biden emphasizes environmental justice. "“Climate change does not affect everyone equally in the United States," said Rachel Morello-Prosch, author of The Climate Gap, which studies the differences in the impact of climate change on various groups in the United States. Biden agreed with this statement, and he observed people of the colors, low income and indigeneous communities will be hurt the most from climate change. He said “We cannot turn a blind eye to the way in which environmental burdens and benefits have been and will continue to be distributed unevenly along racial and socioeconomic lines.” He highlighted the word ‘environmental inequality’ and he pledged making a solution for environmental inequalities will be a priority for all of the governmental institutions. 

Then what strategies are Biden making to solve environmental inequality? First of all, he strongly pledged he will make all people in the United States drink safe and clean water. It is an utterly different movement with Trump, who greatly relaxed the regulation of the Clean Water Act to improve water quality. You might think all of the citizens in America live in good environments but the people who live far away from big cities are not even supplied with enough water to drink. Biden pledged to remove the risks and make the polluter undertake responsibility by building a monitoring system, expecting climate change will exacerbate the problem of water supply. This is related with his another pledge that he legitimizes all polluters to absorb all charges. In addition, he will ensure the 40% of benefit of clean energy and infrastructure investment to social minority communities. 

Biden says “Climate change mitigation efforts must consciously protect low-income communities from 'green gentrification'.”

 

Conclusion 

After Donald Trump signed to withdraw the Paris Agreement, a year had past and the effects of withdrawal had now taken place. However, rejoining this agreement is not a difficult task. If Joe Biden notifies willingness to rejoin, the United States would be able to rejoin 30 days later. 

The lesson that we can achieve through this incident is that cooperation to achieve a global goal is much easier compared to focusing only on one nation's profits. Now that the United States is moving forward to make changes in the environment, we now expect a bright green future.

 

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References

1. Policies from Barack Obama

[1) Reinstate to increase the fuel economy of cars]

(1) 세계지역연구논총 18집 1호 54쪽

 

[2) Reinstate of the shale gas development management bill]

(1) 세계지역연구논총 18집 1호 54쪽

(2) 네이버 지식백과 https://terms.naver.com/entry.nhn?docId=938449&cid=43667&categoryId=43667

(3) 연선옥, [바이든 시대] '탄소 조정세' 뭐길래? "새로운 무역장벽... 韓 기업, 안전벨트 꽉 매라”, 조선비즈, 20.11.09
https://biz.chosun.com/site/data/html_dir/2020/11/09/2020110901648.html?utm_source=naver&utm_medium=original&utm_campaign=biz

 

[3) Extend tax benefits for companies installing renewable energy generator]

(1) 주용석, ‘트럼프 감세’ 지우고 ‘부자 증세’로... 바이든 시대 미국의 선택 [글로벌 현장], 한경비즈니스, 20.11.08
https://news.naver.com/main/read.nhn?mode=LSD&mid=sec&sid1=004&oid=050&aid=0000055706

 

[4) Rejoining the Paris Agreement]

(1)

 

[5) Policies on Coals]

(1) https://oilprice.com/Energy/Energy-General/What-Would-A-Biden-Presidency-Mean-For-Coal.html

 

[6)  Preserving National Parks]

(1)

 

2. Joe Biden's Own Policies

[1) Biden will hold a climate world summit]

(1) 국가지표체계, 온실가스 배출량, 2020,10,07 https://www.index.go.kr/unify/idx-info.do?idxCd=4288

(2) BIDENHARRIS, 9 Key Elements of Joe Biden’s Plan For A Clean Energy Revolution, 2020, https://joebiden.com/9-key-elements-of-joe-bidens-plan-for-a-clean-energy-revolution/#

(3) BIDENHARRIS, The Biden Plan for Climate Change Revolution and Environmental Justice, 2020, https://joebiden.com/climate-plan/

[2) Net-Zero policy]

(1) 김은경, [바이든 당선] 파리협정 재가입·탄소중립… 우리나라 영향은?, 연합뉴스, 2020.11.08
[바이든 당선] 파리협정 재가입·탄소중립…우리나라 영향은? | 연합뉴스 (yna.co.kr)

(2) THE BIDEN PLAN TO BUILD A MODERN, SUSTAINABLE INFRASTRUCTURE AND AN EQUITABLE CLEAN ENERGY FUTURE, Battle for the Soul of the Nation, joebiden.com/clean-energy/

(3) Ed Crooks, Biden’s clean energy plan aims at job creation, Wood Mackenzie, 20.07.17,
Biden’s clean energy plan aims at job creation | Wood Mackenzie

 

[3) Economic plan to cope with Corona Virus]

(1) Alexandra Jaffe, Ellen Knickmeyer, and Will Weissert, “Biden’s $2 trillion climate plan aims to reframe debate”, AP, 2020.7.15, https://apnews.com/article/7cdf40d9bd40c75861fc0053212d034a

(2) Katie Glueck and Lisa Friedman, “Biden Announces $2 Trillion Climate Plan”, The New York Times, 2020.7.14, https://www.nytimes.com/2020/07/14/us/politics/biden-climate-plan.html

(3) Valerie Volcovici, “Biden unveils $1.7 trillion climate plan to end U.S. carbon emissions by 2050”, Reuters, 2019.6.4, https://www.reuters.com/article/us-usa-election-biden-climate-idUSKCN1T515R

(4) 강구상, 김종혁, 임지운, “2020년 미국 민주당 대선후보 확정 및 주요 공약”, 대외경제정책연구원, 2020.9.11.

[4) Building energy efficiency]

THE BIDEN PLAN FOR A CLEAN ENERGY REVOLUTION AND ENVIRONMENTAL JUSTICE, Battle for the Soul of the Nation,  joebiden.com/climate-plan/

[5) Climate Disclosure Policy]

(1) Esther Whieldon, Declan Harty, “Biden plan to make companies disclose climate risks key to decarbonization”, S&P Global, 2020.11.2, https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/biden-plan-to-make-companies-disclose-climate-risks-key-to-decarbonization-60975902

(2) Mark Olsen, “Biden Administration to Bring More Climate Disclosures”, 2020.11.17, https://www.intelligize.com/biden-administration-to-bring-more-climate-disclosures/

[6) Realizing Environmental justice]

(1) BIDENHARRIS, 9 Key Elements of Joe Biden’s Plan For A Clean Energy Revolution, 2020, https://joebiden.com/9-key-elements-of-joe-bidens-plan-for-a-clean-energy-revolution/#

(2) BIDENHARRIS, The Biden Plan for Climate Change Revolution and Environmental Justice, 2020, https://joebiden.com/climate-plan/

(3) BIDENHARRIS, The Biden Plan to Secure Environmental Justice and Equitable Economic Opportunity, 2020, https://joebiden.com/environmental-justice-plan/