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With Congress Sidelined, Executive Branch Likely to Act on Climate
According to CNN, more than 90 million Americans endured “alarmingly high” temperatures this past weekend. The heat wave, which stretched from the Pacific Northwest to Texas to the Northeast, claimed the lives of several older Americans and people with underlying conditions. And, as many progressive Democrats in Washington have pointed out – repeatedly – the news came just days after Sen. Joe Manchin (D-W.Va.) axed climate change measures from Democrats’ Build Back Better plan.
The demise of Build Back Better climate-related spending means the likelihood that federal lawmakers will approve legislation to address rising temperatures is significantly diminished. And if Republicans take over the House of Representatives in this November’s midterm elections, the probability of federal climate-related legislation being enacted into law will be almost zero for at least the next two years.
As a result, we can expect the White House and federal agencies to take on a much larger role when it comes to climate change … and any other hot-button issue on which the two parties find it difficult to agree. Let’s take a look at what the Biden administration has already done in the space, and what it may plan to do.
What Would An Emergency Climate Declaration Mean?
Last week, President Biden announced a series of executive actions to address climate change. While the president described rising temperatures as “an emergency,” he did not issue a national climate emergency declaration. The Biden administration is considering that sort of declaration, however, which, as Politico reported, “would enable President Joe Biden to unleash sweeping actions to restrain greenhouse gas production — such as banning U.S. crude oil exports, ending offshore drilling or speeding the manufacturing of electric vehicles.”
All of that … and a whole lot more.
The power to declare a national emergency originates from The National Emergencies Act (NEA), a federal law passed in 1976 that, according to Ballotpedia, “established the ground rules for how the federal government responds to national emergencies.” Ballotpedia said there are 123 powers available to presidents once they declare a national emergency and 13 others available if Congress makes a similar declaration. These measures include the power to:
Seize property;
Organize and control of the means of production;
Seize commodities;
Send military forces overseas;
Institute martial law;
Seize and control all transportation and communication;
Regulate the operation of private enterprise; and
Restrict travel
All of which would be controversial, especially for an issue on which Republicans and Democrats traditionally do not see eye to eye.
According to a new survey by Morning Consult/Politico, the idea of a national climate emergency does indeed split the two parties’ supporters. Overall, 52 percent of voters say they would support such a designation. That number reflects strong support from Democrats and heavy opposition from Republicans, Morning Consult said. Indeed, 83 percent of Democrats support the idea while 76 percent of Republicans oppose it.
While Republicans may try argue an emergency declaration of this caliber is unprecedented, according to Gizmodo, that claim would be wrong. In fact, “Presidential emergency declarations are common. Since the National Emergencies Act was passed in 1976, every president has issued at least one.” President Donald Trump issued emergency declarations to get funding for his border wall. He also issued one related to cybersecurity and another to respond to the COVID-19 pandemic, for example. President Clinton declared a national emergency in 1993 that sought to restrict U.S. citizens’ ability “prevent their participation in activities that could contribute to the proliferation of weapons of mass destruction and the means of their delivery.”
In all, according to Ballotpedia, presidents from both parties have declared at least 62 national emergencies since 1976.
While the Biden administration contemplates an emergency declaration, it will continue to unveil other, more informational measures that aim to help the public prepare warmer temperatures. Yesterday, for example, the U.S. Department of Commerce unveiled heat.gov, which assembles new and existing federal risk guidance to help American businesses and families better anticipate extreme heat.
Of course, financial services regulators also are on the case.
More Climate Action Coming from SEC, FSOC and Others
Tomorrow, the Financial Stability Oversight Council — the super regulator made up of the heads of all of the individual financial regulators created by Dodd-Frank to identify and mitigate systemic risks to the financial system — meets for its quarterly open meeting. On the agenda: the risks posed to the financial system by climate change. Ultimately, FSOC is expected to endorse an all-of-government approach (or at least all-of-financial-services-regulatory approach) to mitigating climate risk.
Such a statement would not be a surprise. As readers might recall, last October FSOC released a report that, for the first time, named climate change is an emerging threat to the U.S. financial system. As Roll Call has explained, that report found:
All nine FSOC agencies already have individually publicly affirmed climate as a systemic risk to the financial system;
All nine FSOC agencies have made progress in identifying the data needed to evaluate these risks and develop a plan to procure data they need;
Each agency has designated staff to focus on climate-related risks, with all but one appointing senior staff to lead those teams; and
Several agencies have begun to incorporate climate risk into their supervisory activities.
President Biden’s May 2021 executive order on climate-related financial risk also gave FSOC broad powers to act. The U.S. Securities and Exchange Commission (SEC), which has already proposed an ESG disclosure rule, is likely to ultimately point to the FSOC recommendation as further support for that proposal.
And, as the Center for American Progress has noted, the Federal Deposit Insurance Corporation (FDIC) has issued a proposed set of principles for large banks under its supervision to identify and address climate-related risks to their businesses. The FDIC’s proposal closely follows a document released by the Office of the Comptroller of the Currency (OCC) in December 2021.
In October 2021, the U.S. Department of the Treasury the launched an effort to study the impact of climate change on households and communities. As the department explained in a press release, the Financial Literacy and Education Commission (FLEC) convened a meeting, which was chaired by Under Secretary for Domestic Finance Nellie Liang to begin to explore the financial risks to households and communities, especially low-income and historically disadvantaged communities, of climate change and climate transition.
And the Federal Reserve Board of San Francisco (FRBSF) has made it clear that it believes address financial risk from climate change is a core function of the Fed. The FRBSF states on its website, “The Federal Reserve’s job is to promote a healthy, stable economy. This requires us to consider current and future risks — whether we have a direct influence on them or not. Climate change is one of those risks. The impacts of a changing climate — including the frequency and magnitude of severe weather events — affects each of our three core roles: Conducting monetary policy; regulating and supervising the banking system; and ensuring a safe and sound payment system.”
Tracking the Biden administration’s climate action
The Brookings Institution is tracking all of the Biden administration’s regulatory actions. In just 18 months in office, there have been 24 rulemakings or executive orders related to the environment. Compare that to the COVID-19 pandemic, where there have been just six actions, and to education where there have been only three.
If Congress fails to act on the issue of climate risk, which seems quite likely, we can expect even more rulemakings and executive orders from the Biden administration in the coming months – and even years.