Biden’s Big Step Toward Decarbonization
June 10, 2022
A Historic Climate Announcement
On Monday, the Biden administration made a series of announcements declaring an electricity supply emergency and invoking the Defense Production Act (DPA) of 1950 to increase domestic production in clean energy sectors that will be crucial for decarbonization, including solar panels, electric heat pumps, insulation, and more.
These actions, says Roosevelt Director of Industrial Policy and Trade Todd N. Tucker, represent “a historic acknowledgement of the climate crisis by the federal government, and a fundamental pivot by the United States toward a clean energy transition that creates good jobs here at home.”
Though powers similar to those authorized by the DPA have existed since Franklin D. Roosevelt’s administration, they have not been used in such a robust manner since the Korean War, and never for robust climate action.
“While the climate crisis is undoubtedly a crisis, it is slower-moving and different in kind than the types of crises the DPA has been used for in the past,” Tucker explains.
“The legal and political precedent alone of using the DPA to address the climate crisis is therefore hard to understate.”
Read more from Tucker in “Making Sense of Biden’s Green Energy Defense Production Act Announcements,” and about how DPA powers can be used to combat the climate crisis in “Priorities and Allocations: How the Defense Production Act Allows Government to Mobilize Industry to Ensure Popular Well-Being.”
How Financial Regulators Can Combat the Climate Crisis
“Supervisory oversight of a bank’s safety and soundness is a tool flexible enough to help guard against emerging risks like climate change,” write Public Citizen’s Yevgeny Shrago and David Arkush in a new report.
“Because supervisory guidance is not the product of a formal rulemaking process, it can be deployed with limited administrative delays and avoid pitfalls that impede many legislative and regulatory efforts.”
Shrago and Arkush explain how financial regulators can—and must—integrate climate risk into their supervisory guidance and examination for banks to reduce the threats the climate crisis poses to financial stability.
Learn more in Looking over the Horizon: The Case for Prioritizing Climate-Related Risk Supervision of Banks.
The Promise of Renewables
Energy prices, and particularly fossil fuels, accounted for a third of inflation over the past month—demonstrating the challenges of fossil fuel volatility for stable prices.
“[L]ong-term price stability requires a rapid transition from fossil fuels towards electrified, renewable energy,” tweeted Roosevelt Deputy Director of Macroeconomic Analysis Lauren Melodia. “Investment today is a necessary part of a stable economy in the future.”
Learn more about Melodia’s thoughts on inflation, and read her recent issue brief: “Energy Price Stability: The Peril of Fossil Fuels and the Promise of Renewables.”
What We’re Reading
Hear Us: Public Banking for Racial Justice – Next City
It’s a Terrifying Time to Have Kids in America. It Doesn’t Have to Be This Way. – Vox
Three Open Questions about Biden’s New Environmental Justice Tool – Grist
America’s Inequality Problem Just Improved for the First Time in a Generation – Bloomberg
Why It Matters That the Jan. 6 Hearings Put ‘a War Scene’ on Display – New York Times