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THE BANKS AGENDA: Former Trump administration international energy adviser George David Banks wants his party to pursue deeper global emissions reductions through trade policy.
Banks, most recently the chief Republican strategist on the House Select Climate Crisis Committee, left his position last week to shape the GOP agenda from the outside working for three different think tanks.
Banks officially today will take on fellowships at the Bipartisan Policy Center, Atlantic Council, and Citizens for Responsible Energy Solutions, where he hopes to advocate for integrating climate and trade policies.
“I am committed to helping the GOP position itself in a stronger political position as it pertains to climate policy,” Banks told Josh in an interview. Sasha Mackler, the director of energy projects at Bipartisan Policy Center, told Josh that Banks “clearly has currency when it comes to conservative thinking towards climate change solutions” that will amplify the think-tank’s efforts to advance “pragmatic” policies.
READ ON FOR BANKS’ STRATEGY…
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INSIDE BANKS’ STRATEGY: The way to attract conservatives, Banks said, is to merge climate and trade in a way that creates a competitive advantage for U.S. industry vs. China.
Banks, who also advised the George W. Bush administration on international energy issues, unsuccessfully tried to persuade former President Donald Trump to remain in the Paris Agreement.
Now that President Biden has put the U.S. back into the Paris Agreement, Banks is pushing for Republicans to join with Democrats to encourage the administration to negotiate a trade agreement with allies such as Japan, Canada, South Korea, and Australia that forces China, Russia, and other big emitters to reduce emissions.
Banks said such a trade pact would “layer on top of” the Paris Agreement. Critically, Paris Agreement targets are non-binding and Banks is skeptical China would do what it says, even if it raises its targets as Biden wants.
The U.S. has an advantage over China in producing goods and services at lower rates of carbon emissions, Banks said, so the idea would be to leverage that by punishing dirtier products and rewarding cleaner ones, through some sort of trade mechanism.
“There is a really high level agreement among Democrats and Republicans that the U.S. should take advantage of the fact its products are more carbon efficient,” Banks said. “People haven’t talked about how you create a policy to exploit that advantage.”
The current trade system, Banks said, benefits China, which has used its state-controlled economy to become the dominant producer of solar panels, for example, after the technology was developed in the U.S.
How about a carbon tax? Other Republicans, such as the GOP-led Climate Leadership Council, are advocating for the U.S. to impose a carbon price with a border adjustment, or import tax on carbon-intensive goods, that force competitors to lower their emissions if they want a piece of the U.S. market.
Banks is not calling for the U.S. to impose a carbon tax right away, given its political challenges, but he said new trade agreements with allies would promote consumption and production of the cleanest products in the meantime, while forcing China to reduce its emissions.
He acknowledged the current U.S. carbon advantage is “not enough” and said that absent new emissions policies, the pace of reductions from the past decade — mainly from the switch of coal to gas — won’t keep up.
What about Europe? Banks also admitted that European countries would be unlikely to go along with joining a trade agreement, given the EU is ahead of the U.S. with its climate policies, and at least one member, France, has rejected American natural gas as being too dirty.
Europe is looking to impose a border adjustment of its own that could theoretically target U.S. products.
But Banks argues the U.S. still ranks among the cleanest producers, and a new climate trade agreement that recognizes that would incentivize further investment in cleaner energy technologies, and “reinforce that advantage.”
“Let’s lock in a competitive advantage based on what we’ve already done, and then let’s talk about other policies and measures we can adopt that helps double down on that,” Banks said.
INTERIOR SECRETARY HAALAND CONFIRMED. NOW EYES TURN TO LEASING PAUSE: Deb Haaland, who becomes the first Native American Cabinet secretary, will oversee the future of the federal fossil fuel program after Biden paused new oil and gas leasing on public lands in his first days in office and initiated a review to determine whether to restart leasing and under what conditions.
Biden promised a ban as one of his signature campaign pledges to help combat climate change, but Democratic lawmakers are calling for the administration to reform the process of oil and gas leasing on federal lands without ending it.
Haaland stressed during her confirmation the pause won’t be permanent while reiterating her interest in resetting how public lands are used to focus more on renewable energy development and conservation. Jockeying among industry and advocacy groups has already begun.
Mike Sommers, CEO of the American Petroleum Institute, congratulated Haaland last night on her “historic confirmation” and then said her “first priority should be to lift the federal leasing pause.”
Oil Change International, a liberal environmental group, said Interior’s review must come to “only one conclusion.”
“The Department must extend its current moratorium on federal leases on public lands into a permanent ban, following through on Joe Biden’s campaign promise to end all federal leasing on public lands,” said David Turnbull, the group’s strategic communications director.
THE NEXT FIGHT? BIDEN’S 30 BY 30 CONSERVATION GOAL: Lawmakers in Congress are jockeying over another Biden initiative that Interior will have a hand in: implementing his goal of conserving 30% of U.S. public lands by 2030.
That commitment fulfills a promise Biden made in his climate plans on the campaign trail, in which he pledged to protect biodiversity, slow extinction rates, and help store carbon in forests and soils.
A dozen Republican senators and 50 House members representing the Western Caucuses sent a letter to Biden this morning seeking details about the 30 by 30 conservation commitment, as it’s known in shorthand. Republicans fault Haaland for failing to provide sufficient details on the “ambiguous” target during her confirmation hearing and warn that Western states stand to be “disproportionately impacted” if policies are enacted to restrict energy development, mining, logging, and agricultural activities in order to achieve the conservation goal.
“We remain concerned that the 30 by 30 initiative will be used as a method to undermine private property rights, circumvent the multiple-use mandate, and lock up more land,” the Republicans said.
Democrats see opportunity, urge inclusive process: Democrats sent their own letter to Biden this morning supporting his 30 by 30 conservation goal and urging him to adopt a “transparent, stakeholder-driven process” in deciding which lands and waters to conserve.
In the letter, 99 House Democrats and 17 Senators encourage Biden to consult with tribal councils, farmers, ranchers, fishermen, conservationists, recreationists, hunters, and local governments.
Democrats say the process of conserving public lands can create “well-paying jobs” and promote a “just transition” away from fossil fuels.
TAKING CLOSER LOOK AT HOUSE REPUBLICANS’ CLEAN ENERGY AGENDA: Yesterday we wrote about Republicans of the Energy and Commerce Committee releasing a clean energy agenda, and deemed it as basically a mix of previously introduced legislation.
While it’s true that many of the 18 bills have been previously released, some have updated sections and a few of them are brand new, we realized after taking a closer look.
For example, one new bill, the Clean Energy Hydrogen Innovation Act, would promote the development of hydrogen technologies through the DOE loan program. Another new bill, the Advanced Nuclear Reactor Deployment Act, would further streamline the permitting process for new small nuclear reactors.
The Committee’s top Republican, Rep. Cathy McMorris Rodgers, emphasized in remarks yesterday to the American Exploration and Production Council that the concepts supported by GOP members are bipartisan, even if they don’t go far as Democrats want.
“I hope Democrats will work with us to find common ground on innovation-based policies,” McMorris Rodgers said. “I am ready to go work with them on it.”
SEC MOVES TOWARD REQUIRING CLIMATE DISCLOSURES: The Securities and Exchange Commission is seeking public input on establishing a regime for requiring corporations to disclose the risks they face from climate change and policies to curb emissions.
“It’s time to move from the question of ‘if’ to the more difficult question of ‘how’ we obtain disclosure on climate,” said acting SEC chair Allison Herren Lee during remarks at a virtual event hosted by the Center for American Progress, announcing the request for comment.
Lee said she is seeking input on questions such as what data and metrics the SEC should use, whether disclosure should be industry-specific, and how to ensure a climate disclosure regime is “sufficiently flexible” to adapt to market and scientific developments.
More on Lee’s remarks in Abby’s story from yesterday.
CITIGROUP SAYS IT WON’T FINANCE ANY COAL PLANT EXPANSIONS: Citigroup, fresh off announcing its net-zero emissions by 2050, updated its environmental and social policy framework yesterday to state it won’t provide financing for any projects seeking to expand existing coal-fired power plants.
The commitment, which environmental activists say is a first for a major U.S. bank, adds to pledges by Citi to not finance any new coal-fired power plants, new thermal coal mines or “significant expansion” of existing mines, and oil and gas projects in the Arctic.
Citi’s new commitment “sends another clear signal to utilities and other corporations involved in the coal sector that their major sources of capital are going to dry up unless they transition to clean energy,” said Patrick McCully, climate and energy program director at the Rainforest Action Network.
REFINERS SEEK RELIEF ON BIOFUELS MANDATE FROM BIDEN TEAM: The American Fuel and Petrochemical Manufacturers is calling on new EPA Administrator Michael Regan to take quick action to delay looming compliance deadlines for the Renewable Fuel Standard.
The group is also asking Regan to relax the required biofuel blending levels in the next RFS rulemaking to account for the pandemic’s toll on gasoline demand. The Trump administration delayed issuing a rule setting blending volumes for 2021.
Without certainty on 2021 requirements or proposed extensions to compliance deadlines, companies have been “largely blind” to what their obligations are, said AFPM president Chet Thompson in a letter yesterday to Regan. That uncertainty has helped push prices for renewable fuel credits, known as Renewable Identification Numbers (or RINs), to “near all-time highs, threatening the viability of many refineries,” Thompson added.
EPA TIGHTENS RULE TARGETING CROSS-STATE AIR POLLUTION: The action, which finalizes changes proposed by the Trump administration in response to a court ruling, is one of Regan’s first as EPA administrator.
The rulemaking requires power plants in 12 upwind states, including Illinois, Kentucky, Pennsylvania, and West Virginia, to install, upgrade, or improve pollution controls to reduce emissions of nitrogen oxides. The action will help downwind states comply with federal air quality standards for smog, the EPA said.
The EPA estimates the rule will cut NOx emissions in the dozen states by roughly 17,000 tons beginning this year, with average annual public health and climate benefits of up to $2.8 billion between 2021 and 2040.
Worth noting: The EPA uses the Biden administration’s recently published interim social cost of carbon values to estimate the climate benefits of this rule.
SOLAR’S FUTURE LOOKS BRIGHT: The U.S. solar fleet is likely to quadruple between now and the end of the decade, reaching more than 400 gigawatts of capacity, according to data released this morning from the Solar Energy Industries Association and Wood Mackenzie.
Solar’s growth will be driven in part by the recent two-year extension of federal tax credits, along with climate commitments from various stakeholders that will drive demand for renewables, said Michelle Davis, a senior analyst with Wood Mackenzie.
Solar also saw significant growth last year, despite the pandemic. According to SEIA and Wood Mackenzie’s report, solar accounted for 43% of all new electricity capacity added in 2020, and installations in the fourth quarter of last year were the largest in the industry’s history.
BIDEN TAPS HEAD OF JUSTICE DEPARTMENT’S ENVIRONMENT DIVISION: Biden is nominating Todd Kim to lead the Justice Department’s environment and natural resources division, where he would be, if confirmed, leading the effort to help defend the Biden administration’s climate change regulations.
Since the beginning of the Biden administration, Kim has served as deputy general counsel at the Energy Department. Prior to that, he worked in private practice and served as Washington, D.C.’s first solicitor general. Kim also served for more than seven years as a staff attorney in the Justice Department’s environment division, and he was twice nominated by former President Barack Obama to sit on the D.C. Circuit Court of Appeals.
NBC News Green groups launch $10 million ad campaign pressuring Biden, Congress to spend huge on climate
Washington Post New EPA administrator: ‘Science is back’
Bloomberg The world’s three biggest coal users get ready to burn even more
Bloomberg Swiss Re plans coal exit, $100 carbon levy on road to net zero
New York Times Volkswagen aims to use its size to head off Tesla
WEDNESDAY | MARCH 17
10 a.m. G-50 Dirksen. The Senate Environment and Public Works Committee will hold a hearing titled, “Examining the Challenges Facing Drinking Water and Waste Water Infrastructure Projects.”
THURSDAY | MARCH 18
10 a.m. The House Science Committee will hold a remote hearing titled, “Lessons Learned From the Texas Blackouts: Research Needs For a Secure and Resilient Grid.”
11 a.m. The House Energy and Commerce Committee’s environment and climate change subcommittee will hold a virtual legislative hearing on the CLEAN Future Act.