Federal Climate Change Update 2022
The Biden Administration kicked off 2021 with big plans for tackling the climate crisis, pledging to cut greenhouse gas emissions in half by 2030. Biden later doubled down on his promise in November at the Glasgow Climate Change Conference, where he tried to convince other world leaders that the United States is not only doing its part to fight climate change but hopes to lead by example. Already a tough sell after Trump’s prior withdrawal from the Paris Climate Accord, for which Biden actually apologized, Biden’s message to the conference attendees was largely undercut by West Virginia Senator Joe Manchin III’s announcement earlier the same day that he would not support Biden’s Build Back Better bill.
As originally drafted, the bill earmarked more than $500 billion for clean energy spending, including tax credits and other financial incentives for businesses that install clean energy technologies and individuals who purchase electric vehicles. The Administration hoped incentivizing greenhouse gas (GHG) reductions through tax breaks would provide a workaround to the judicial challenges that generally befall regulatory actions seeking to restrict emissions. The GHG reductions expected from these clean energy initiatives were thought to be necessary to get the Administration in the ballpark of its 2030 goal, and yet, the spending package had already been docked by the time it landed on Manchin’s desk. Without Manchin’s vote, the bill stalled out in the Senate before the December holidays, and its future remains uncertain. Naturally, Biden and other key Democrats have already signaled their desire to get the bill through the Senate in one form or another when Congress returns to work in January.
The Administration suffered another significant setback in late 2021, when the Supreme Court surprisingly agreed to review the D.C. Circuit Court’s 2020 decision vacating Trump’s Affordable Clean Energy (ACE) rule. The ACE rule would have allowed existing power plants to achieve GHG at the individual facility level and repealed the ACE rule’s Obama-era counterpart, the Clean Power Plan (the “CPP”). The CPP, by contrast, would have imposed emission standards on the electricity generation sector as a whole. After the D.C. Circuit threw out the ACE rule and the related repeal of the CPP (but without reinstating the CPP), four pro-coal petitioners, including Manchin’s home state of West Virginia, asked the Supreme Court to effectively break the tie and weigh in on the breadth of EPA’s authority under Section 111(d) of the Clean Air Act, the statutory provision pursuant to which both the Ace rule and the CPP were promulgated, to regulate how an entire industry operates. Oral argument before the Supreme Court is scheduled for February 28, 2022, but the Court’s involvement will likely delay Biden’s climate change efforts, if not cripple them.
Still, the Administration made some progress on the climate change front during 2021 and further action is expected in 2022. Most notably, EPA proposed a comprehensive plan to reduce methane emissions from the oil and natural gas industry, including for the first time from existing sources. If finalized, the rule would impose stringent monitoring requirements, and performance standards and mandate consideration of environmental justice factors. EPA plans to issue a supplemental proposed rule based on public comments later this year and then a final rule in October. Separately, EPA finalized in late 2021 a regulation aimed at capping and phasing down production and consumption of hydrofluorocarbons commonly used in refrigeration, air condition equipment, and foam, among other applications.
Finally, just weeks ago on December 20, 2021, EPA finalized new limits on tailpipe emissions of carbon dioxide from new cars and light trucks, model years 2023 through 2026. Although the new rule has been touted as a linchpin in Biden’s climate change strategy, reductions in tailpipe emissions on their own, without a generous assist from the GHG reductions contemplated under the Build Back Better bill, are likely not enough to get the U.S. to its 50 percent reduction goal by 2023. The new rule has also drawn criticism from the auto manufacturing sector, perhaps setting the stage for another legal battle between EPA and one of the many industries it regulates. Similarly, EPA intends to issue in 2022 the first of several rulemakings setting GHG standards for 2027 model-year and later heavy-duty trucks.
We will continue to track these developments closely. If you have any questions, please contact Kate Vaccaro.