Federal Climate Change to Remain a Top Priority in 2023

January 18, 2023
Katherine L. Vacarro, Esq.
MGKF Special Alert - Federal Forecast 2023

Addressing climate change will remain among the Biden Administration’s top priorities during 2023, and the end goal is the same: reducing greenhouse gas emissions by up to 50 percent by 2030.  But after some setbacks in 2022, the Administration was forced to take a step back and reevaluate its options.  Notably, instead of Biden’s Build Back Better bill which died on the vine early last year without the support of West Virginia Senator Manchin, the Administration will use the Inflation Reduction Act of 2022 (the “IRA”) to allocate funding for reducing greenhouse gas (GHG) emissions in every sector of the economy, including electricity production, transportation, industrial manufacturing, buildings, and agriculture.  The IRA amends the federal Clean Air Act to create a new program called the “Greenhouse Gas Reduction Fund.”  The Environmental Protection Agency (EPA) will administer the $27 billion fund by providing competitive grants to encourage projects that reduce GHG emissions, with an emphasis on projects that benefit low-income and disadvantaged communities, which ties nicely with the Administration’s other top environmental priority, environmental justice.  

Biden’s EPA is also expected to pivot in 2023 in response to the Supreme Court’s mid-2022 decision in West Virginia v. EPA, which concluded that EPA lacks the authority under the Clean Air Act to require broad GHG emission reductions across the power sector by forcing a generation shift away from coal-fired plants.  Although the Court stopped short of imposing an outright ban on such an approach, it came close, finding that Congress would first need to amend the Clean Air Act to expressly grant EPA the requisite authority.  EPA will therefore need to look closely at future approaches to forcing industry-wide GHG emission reductions from power generation, and indeed, EPA already delayed rolling out a proposal for reducing GHG emissions from existing power plants, which was originally expected in July 2022, and instead created a new regulatory “docket to collect public input to guide the Agency’s efforts to reduce emissions of [GHGs] from new and existing fossil fuel-fired electric generating units.”  The proposal is now expected in March 2023, the same month EPA is targeting to release its plan to limit GHG emissions from cars and trucks beginning with model year 2027.

Outside the Clean Air Act framework, the Administration released just last week, new “Guidance on the Consideration of Greenhouse Gas Emissions and Climate Change” to assist federal agencies better assess and disclose climate impacts when they conduct environmental reviews of permit applications for clean energy and other infrastructure projects.  In particular, the new guidance instructs agencies to mitigate GHG emissions to the greatest extent possible and emphasizes that the depth of analysis should be proportional to a project’s impacts.  Specifically, projects that will reduce GHG emissions can have less detailed GHG emissions analysis.  The Council on Environmental Quality is accepting public comments on the new guidance through March 10, 2023.

With these and other regulatory initiatives underway, the Administration is poised for an active year focused on climate change.