Over the past couple months, there has been a significant question as to how the Biden administration would navigate new regulatory rulemaking standards  imposed late into the Trump administration. The key changes these standards have on regulators are: co-benefits from regulations must be separated from primary benefits (no more rules where 99 percent of the benefits  come from co-benefits), and regulators must now adhere to established regulatory guidelines  for calculating benefits (discount rates, domestic versus global benefits, etc.) and for what science is considered of acceptable quality in rulemaking (peer reviewed and with reproducible results). Those changes from the U.S. Environmental Protection Agency (EPA) were codified in the Federal Register, effectively binding the Biden administration to comply with them. Now, however, Biden’s day one executive order on climate change has signaled that these standards will be reviewed, and this potentially could be setting up his regulators to make the same mistakes of the Trump and Obama administrations.
Tucked into Biden’s executive order  on climate is a line requesting the EPA to review the existing rule on benefit cost analysis and transparency “as soon as possible,” and given that the rule was critiqued by advocacy  groups as setting too high a bar for new regulation, it is expected that Biden’s review will jettison as much of the rule as possible. Lowering the bar for regulatory quality, though, may come at the tradeoff of a shortened lifespan for the affected policies. This would be a mistake, since the salient lesson of the prior two administrations is that bipartisan climate policies  from Congress, like those we have seen recently, offer a much more durable pathway for climate progress than regulations.
President Obama’s regulations suffered a slew of defeats in court. The Waters of the United States (WOTUS) rule was stayed for having limitations that were “facially suspect .” The Mercury Air and Toxics Standards (MATS) was rejected by the Supreme Court  for having 99 percent of its benefits be co-benefits, leading to the speculation that the rule wasn’t about limiting mercury pollution at all. The Clean Power Plan (CPP) was stayed by the Supreme Court  even before it was appealed by a lower court, presumably because the justices already believed it was likely too broad an interpretation of regulatory authority.
Part of the reason so many of Obama’s regulations suffered defeat in court is because critiques of their regulatory quality was perfectly warranted. The Obama administration frequently ignored established guidance  on promulgating rules. Nor were the regulations economically insignificant, as Obama finalized an estimated $527.9 billion  worth of burdens from energy and environmental regulations. It is also worth noting that energy and environmental regulations are among the most regressive  (harmful to the poor) methods of abating emissions, as the costs of compliance are handed down to customers.
Despite the Biden administration’s claims that it is not a third term of Obama, in the regulatory space it seems to be teeing itself up for the exact same battles. This is, quite simply, not great environmental policy. The greenhouse gas emissions data comparing the Obama and Trump administrations—polar opposites in terms of environmental regulation—showed virtually no difference in trends . The Biden administration’s biggest rules will face the toughest battles, as it was for Obama whose signature climate rule (the CPP) was finalized in November and only made it to February before being stayed, so expectations that the most impactful rules can get across the finish line and make all the difference should be tempered. And, to top it off, Biden faces much stiffer opposition from the Supreme Court than President Obama did, with a 6-3 conservative majority as opposed to the 5-4 under Obama.
Of course, the defense of the Obama administration’s approach to regulation was that even if it was not ideal, it was the only climate policy option available in the face of an oppositional Congress. Is this still true in 2021, though? Since 2017, there have been 25 climate  and/or clean energy related bipartisan bills that have been enacted into law. A good chunk of those were part of the December 2020 omnibus , which included limitations on high-warming potential greenhouse gases, expansion of clean energy-focused research and development, expanded support for demonstrations of energy storage technology and more. The 2020 omnibus was effectively the largest energy bill since 2007, and it came under a divided government, and was signed into law by a president who described climate change as a “hoax .” The idea that Biden is somehow less capable than Trump in getting climate bills through Congress is a curious one indeed, and the myth that regulations are the only climate policy option available to the president has been thoroughly busted.
Undoubtedly, the Biden administration will promulgate a slew of new climate-related regulations, but this may be a sugar-high for environmentalists that dissipates quickly if Biden endures the same court defeats as Obama. And even if the rules are upheld, they may deliver little progress as they are confined to the narrow scope of regulatory authority defined under the Clean Air Act (CAA). The more appropriate path forward on climate change is the pursuit of bipartisan legislation  that may target low-cost emission abatement opportunities that do not fall within the administration’s regulatory authority, such as voluntary carbon markets, or reforestation, as well as the promotion of energy innovation that can be impactful globally.
The lesson on environmentalism from the Obama and Trump years was that regulations are not a viable long-term climate strategy, but the new administration seems determined to test those waters anyway. The real question now will be how Biden’s future regulations unfold in the courts, and will they succeed where their predecessors did not in achieving any meaningful reduction in greenhouse gas emissions.
Image credit: Tatiana Grozetskaya
- “regulatory rulemaking standards”: https://www.epa.gov/sites/production/files/2020-12/documents/final_rule_increasing_consistency_and_transparency_in_considering_benefits_and_costs_in_the_clean_air_act_rulemaking_process_-_prepublication_version.pdf
- “99 percent of the benefits”: https://www.cato.org/sites/cato.org/files/serials/files/regulation/2013/6/regulation-v36n2-4.pdf
- “established regulatory guidelines”: https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/
- “executive order”: https://www.whitehouse.gov/briefing-room/presidential-actions/2021/01/20/executive-order-protecting-public-health-and-environment-and-restoring-science-to-tackle-climate-crisis/
- “critiqued by advocacy”: https://www.sciencemag.org/news/2020/12/trump-s-new-cost-benefit-rule-will-curb-epa-s-regulatory-power
- “bipartisan climate policies”: https://www.rstreet.org/2021/01/05/5-myths-about-climate-policy/
- “facially suspect”: https://www.washingtonpost.com/news/volokh-conspiracy/wp/2015/10/09/sixth-circuit-puts-controversial-waters-of-the-united-states-wotus-rule-on-hold/
- “rejected by the Supreme Court”: https://www.utilitydive.com/news/supreme-court-rejects-epa-mats-rule/401467/
- “stayed by the Supreme Court”: https://www.washingtonpost.com/news/volokh-conspiracy/wp/2016/02/09/supreme-court-puts-the-brakes-on-the-epas-clean-power-plan/
- “established guidance”: https://obamawhitehouse.archives.gov/omb/circulars_a004_a-4/
- “$527.9 billion”: https://regrodeo.com/?year%5B0%5D=2016&year%5B1%5D=2015&year%5B2%5D=2014&year%5B3%5D=2013&year%5B4%5D=2012&year%5B5%5D=2011&year%5B6%5D=2010&year%5B7%5D=2009&cfr%5B0%5D=Energy%2B%2526%2BEnvironment&agency%5B0%5D=Energy&agency%5B1%5D=Environmental%2BProtection%2BAgency&agency%5B2%5D=Federal%2BEnergy%2BRegulatory%2BCommission&agency%5B3%5D=Surface%2BTransportation%2BBoard
- “among the most regressive”: https://www.nber.org/system/files/working_papers/w22956/w22956.pdf
- “virtually no difference in trends”: https://www.rstreet.org/2020/12/03/dont-expect-regulations-to-be-a-viable-climate-strategy/
- “have been 25 climate”: https://clearpathaction.org/legislation/
- “December 2020 omnibus”: https://www.eenews.net/stories/1063721401
- “hoax”: https://www.politifact.com/factchecks/2016/jun/03/hillary-clinton/yes-donald-trump-did-call-climate-change-chinese-h/
- “bipartisan legislation”: https://www.rstreet.org/2020/11/10/under-divided-government-can-anything-get-done-on-climate/