Seven Ways the Executive Branch Can Turbocharge Green Industrial Policy

August 18, 2022

On August 16th, 2022, President Biden signed the Inflation Reduction Act (IRA). The bill contains a sweeping set of green industrial policy measures that will move the US two-thirds of the way toward its Paris Agreement goals, leaving the remaining third for the executive branch and other entities to address. 

The executive branch has tools at its disposal that are well-suited to this task, some of which date back to the early days of the administrative state under President Franklin D. Roosevelt and his successors. These tools can use trade, advance market commitments, and emergency declarations to create the green energy jobs of the future while limiting inflation.     

In “Seven Ways the Executive Branch Can Turbocharge Green Industrial Policy,” Arnab Datta, Ashley George, Joel Michaels, and Todd N. Tucker identify seven policy tools President Biden can use to create the green energy jobs of the future, all while limiting inflation. Specifically, the authors explain how President Biden can:   

  • Launch investigations, carbon tariffs, and climate clubs under Section 232 of the Trade Expansion Act of 1962;
  • Create markets for green energy and industry using advance market commitments and equipment transfers under the Defense Production Act of 1950;
  • Use “Other Transaction Authority” to encourage private investment in green energy;
  • Use the Exchange Stabilization Fund to accelerate the production of commodities critical to the green energy transition;
  • Explore partnerships with government corporations as purchasing agents;
  • Invoke a climate emergency under the National Emergencies Act of 1976 to increase the availability of funds for green energy and industry; and
  • Invoke extraordinary contracting powers to make procurement commitments that exceed current budgetary limits.