A Biden presidency doesn't need a Green New Deal to make progress on climate change

Jonathan Shieber
·16-min read




“I think people are saying that conservative principles still account for a majority of public opinion in our country,” Romney said on "Meet the Press" last week. “I don’t think they want to sign up for a Green New Deal. I don’t think they want to sign up for getting rid of coal or oil or gas. I don’t think they’re interested in Medicare for All or higher taxes that would slow down the economy.”




Meanwhile, some of the nation's largest utilities are working to phase out fossil fuel-based power generation.

The markets are already supporting the transition to renewable energy, without much government guidance, at least here in the U.S. So against this backdrop, the question isn't if the government should be supporting the transition to renewable energy, but how quickly stimulus can be mobilized to save American jobs.

"A lot of the really consequential climate-related stuff that's going to come out in the [near term] … won't actually be related to renewables," an advisor to the President-elect said.


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Economic stimulus, COVID-19 and climate



"If we are going to be spending that money, there is an enormous opportunity to make sure that these investments are moving us forward and not recreating problems," said one advisor to the Biden campaign earlier this year.

To understand how the trillions of dollars that are up for grabs will be spent, it's helpful to think in terms of short-, medium- and long-term goals.

In the short term, the focus will be on "shovel-ready" projects that can be spun up as quickly as possible. These would be initiatives like environmental retrofits and building upgrades; repairing and upgrading water systems and electricity grids; providing more manufacturing incentives for electric vehicles; and potentially boosting money for environmental remediation and reclamation projects.


If these efforts incorporate Opportunity Zones, there's a chance to deploy the cash even faster. And if there are ways to preferentially rank infrastructure projects that also include a tech component, then that's even better for startups who have managed to overcome hurdles associated with technology risk.

"Any time you craft policy, especially federal policy, you have to be so careful that the incentives line up correctly with what you’re trying to achieve," said a Biden advisor.

Medium- and longer-term goals will likely require more time to plan and develop, because they're relying on newer technologies in some cases, or they will have to wind their way through the planning process at the local and state levels before they can receive federal funds to begin construction.


Incentives over mandates



"Whenever possible you do want to let the markets figure themselves out," said the advisor to the President-elect. "You always want to default to incentives rather than mandates."

Coming off of the news this week that Pfizer has received positive results for its vaccine, there are some models from the current administration's progress on a COVID-19 vaccine that can be instructive.




And, there's the looming promise of a hydrogen-based economy, which could take advantage of some of the existing oil-and-gas infrastructure and expertise that exists in the country to transition to a cleaner energy future (n.b., that's not necessarily a clean energy future, but it's a cleaner one).


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Sharing the wealth (rural edition)



"Our electric power infrastructure is old, aging and not secure," said Abe Yokell, co-founder of the energy and climate-focused venture capital firm Congruent Ventures. "From an infrastructure standpoint, transmission distribution really should be upgraded and has been underinvested over the years. And it is in direct alignment with providing renewable energy deployment across the U.S. and the electrification of everything."



"Coal … it doesn’t make sense to burn coal anymore," Yokell said. "People are doing it even though it’s out of the money for liability reasons … everyone is looking to retire coal even in the assets."

If those assets can be decommissioned and repurposed to act as nodes on a distributed energy grid using energy storage to smooth capacity in the same way that those coal plants used to, "it's a massive win," according to Yokell. Adoption of energy storage used to be a cost issue, Yokell said. "It’s now a siting issue."

Repowering old hydroelectric assets with newer, more efficient technologies offer another way to move the needle with shovel-ready projects and is an area where startups could stand to benefit from the push. It's also a way to bring jobs to rural communities.

The promise of infrastructure spending can be born out across urban and rural areas, but the stimulus benefits don't end there.

For rural communities there are business opportunities in "climate-smart agriculture, resilience and conservation, including 250,000 jobs plugging abandoned oil and natural gas wells and reclaiming abandoned coal, hardrock and uranium mines," as the Biden transition team notes. And there's a huge opportunity for oil industry workers to find jobs in the new and growing tech-enabled geothermal energy industry.





Sharing the wealth (urban edition)

The same spending that could juice rural economies can be equally applied in America's largest cities. Any movement to boost the auto industry through incentives around electric vehicles or federal mandates to upgrade fleets would do wonders for automakers and the original equipment manufacturers that supply them.



"Local governments across the country are highly interested in the green economy and transitioning to the low-carbon economy," said Lauren Zullo, the director of environmental impact at the real estate management firm, Jonathan Rose Companies. "Cities are really looking to partner with the private real estate sector because they know we're going to have to get buildings involved in the green economy. And any work that you do retrofitting local buildings is literally local economy."


"You saw … a lot of investment made just this way out of the Recovery Act," Zullo said, referring to the American Recovery and Reinvestment Act of 2009, the stimulus bill passed in the first term of the Obama administration. "A lot of [funds] focused on low-income weatherization that were earmarked for low income and affordable housing. [Those] funds have allowed us to reduce energy consumption anywhere from 30% to 50% … and being able to gain those utility cost savings have been transformational to those communities."

Why are these programs so important? Zullo explained further, "Low-income folks are disproportionately burdened by utility and energy costs. Any sort of energy-saving opportunities that we can earmark or target in these low-income communities is truly impactful … not just on a carbon footprint, but on the lives and success of these low-income communities."

Paying for it


In a tweet, the political commentator Matthew Yglesias proffered that the country could afford "to throw an ice cream party." That policy would enable Republicans to keep the tax cuts while allowing the government to continue to spend on stimulus measures.

"[Interest] rates are very low. The country can afford an ice cream option where we spend money on some good things and 'offset' with tax cuts," Yglesias wrote.

To distribute the funds, Congress could set up a body similar to the Reconstruction Finance Corporation (RFC), which was established by Herbert Hoover's administration back at the start of the Great Depression. It was expanded under Franklin Delano Roosevelt to disburse funds to financial institutions, farms and corporations at risk of collapse.



Some investors support the idea. "It's more about channeling dollars to state, municipal or private businesses with the ability to underwrite heavily subsidized loans to any entity proposing a modern infrastructure project that could be paid through municipal bonds or tolling," said one investor in the infrastructure space. "It would offer a credit backstop to anyone who wanted to invest in infrastructure and could have a technological requirement associated with it."


"If you think about a vehicle to deliver these funds, you already have an existing architecture to deliver this … which is the municipal bond market," said Mark Paris, a managing partner at Urban.us, a venture capital fund focused on urban infrastructure.

The infrastructure answer

There's no shortage of levers that the Biden administration can pull to reverse the course of the Trump administration's policies on climate change, but many of these federal policy changes are likely to face challenges in courts.

Vox's David Roberts has an excellent run down of some of the direct actions that Biden can take along the path toward decarbonization of the U.S. economy. They include restoring the over 125 climate and environmental regulations that the Trump presidency reversed or rolled back; working with the Environmental Protection Agency to develop a new, more sweeping version of the original Obama-era Clean Power Plan; push the Department of Transportation's development of new fuel economy standards; and supporting California's own, very aggressive vehicle standards.




Declaring a national climate emergency would give Biden the powers he needs to enact much of the infrastructure initiatives that comprise the President-elect's energy plan, but not a popular mandate to support it.


"The impacts of climate change don't pick and choose. That's because it's not a partisan phenomenon. It's science. And our response should be the same. Grounded in science. Acting together. All of us," Biden said in a September speech.

"These are concrete, actionable policies that create jobs, mitigate climate change and put our nation on the road to net-zero emissions by no later than 2050," he said. "We can invest in our infrastructure to make it stronger and more resilient, while at the same time tackling the root causes of climate change."