Biden Administration Climate Action: Beyond the Paris Agreement

Although the Biden administration’s return to the Paris Agreement has garnered significant attention as one of President Joe Biden’s initial executive actions, a more foundational step toward achieving its climate objectives has been undertaken.

This involved establishing a system for consistent monitoring and evaluation, focusing on key metrics and data analysis. Just as businesses meticulously track financial performance and potential risks, the impacts of climate change and associated emissions have not historically received the same level of scrutiny. Now, mirroring established accounting principles for finance, guidelines will be developed for quantifying the effects of climate change through a concept known as the social cost of carbon.

Alongside a series of executive orders reviewing environmental regulations from the previous administration and reinstating stringent standards for fuel efficiency, methane emissions, appliance performance, building efficiency, and overall emissions, a particularly significant directive emerged. This directive, found within the fifth section of the ninth executive order issued by the new administration, promises to be especially impactful.

This section specifically addresses the process of evaluating the advantages of reducing climate pollution. Previously, the U.S. government lacked a standardized method for assessing the “total costs of greenhouse gas emissions” by considering “worldwide consequences.”

According to the Biden Administration, this comprehensive approach is part of a broader dedication to utilizing data and scientific evidence to guide policy decisions throughout the government.

President Biden outlined the following:

The specific directive concerning measurement and accountability mandates the formation of a working group to establish three key metrics: the social cost of carbon (SCC), the social cost of nitrous oxide (SCN), and the social cost of methane (SCM). These metrics will be used to estimate the financial damages linked to increases in greenhouse gas emissions.

As the executive order explains, “[a] precise social cost is vital for agencies to accurately assess the societal benefits of lowering greenhouse gas emissions when conducting cost-benefit analyses of regulations and other initiatives.” The administration aims to assign a monetary value to the harm caused by greenhouse gas emissions, encompassing factors like increased interest rates and the destruction of agricultural land and infrastructure due to climate change-related natural disasters.

While not widely publicized, these benchmarks offer tangible methods for ensuring accountability. This accountability will be increasingly important as the nation works toward fulfilling the commitments made in the Paris Agreement. Furthermore, it provides a clear economic framework for companies seeking to reduce their emissions and communicate their progress to investors and the public.

This initiative will involve prominent leaders, including the chair of the Council of Economic Advisers, the director of the Office of Management and Budget, and the director of the Office of Science and Technology Policy (a position elevated to cabinet-level status by President Biden).

The working group will also include representatives from each major federal agency responsible for overseeing the economy, public health, and the environment, as well as representatives from the National Climate Advisor and the director of the National Economic Council.

Concurrently with these federal efforts, several startups are already creating services to assist businesses in tracking their emissions.

Companies such as CarbonChain, Persefoni, and SINAI Technologies are examples of this trend. Their work is also supported by nonprofit organizations like CDP, which collaborates with companies to evaluate their carbon emissions.

The administration anticipates the release of preliminary SCC, SCN, and SCM values within the next 30 days, which agencies will then use to quantify the value of changes in greenhouse gas emissions resulting from regulations and agency actions. The president has requested that final metrics be published by January of the following year.

The executive order also reinstated protections for national parks and lands that had been opened for oil and gas exploration and commercial development during the previous administration, and it halted the construction of the Keystone Pipeline, which was intended to transport oil from Canadian tar sands into and across the U.S.

According to the text of the executive order, “The Keystone XL pipeline is not in the U.S. national interest. The United States and the world are facing a climate crisis. This crisis must be addressed with action on a scale and with a speed that matches the need to avoid putting the world on a dangerous, potentially catastrophic, climate path. Domestically, we will tackle this crisis with an ambitious plan to build back better, designed to both reduce harmful emissions and create good, clean-energy jobs.” The order further states, “The United States must be positioned to demonstrate strong climate leadership in order to achieve a substantial increase in global climate action and steer the world toward a sustainable climate future. Allowing the Keystone XL pipeline permit to remain in place would be inconsistent with my Administration’s economic and climate priorities.”