Eakinomics: Biden, Climate-Change Policy, and the Economy

Policies toward clean energy, greenhouse gas emissions, and climate change are of increasing importance across the electorate. As a reflection of this importance, presidential candidate Joe Biden has promised to take executive action on “Day 1.” In her analysis of these proposals, AAF’s Ewelina Czapla notes that the day one orders include:

• Recommitting to the Paris Agreement on climate change;
• Developing methane pollution limits for oil and gas operations;
• “Greening” the federal government’s facilities and vehicles;
• Modifying the Clean Air Act’s fuel economy standards to ensure 100 percent of newly sold light and medium-duty vehicles will be electric;
• Increasing the use of biofuels;
• Creating efficiency standards for appliances and buildings;
• Requiring all federal permitting decisions to include a climate change analysis;
• Requiring climate change disclosures from publicly traded companies;
• Conserving 30 percent of America’s lands and waters by 2030;
• Closing the Arctic National Wildlife Refuge to drilling and establishing more national parks and monuments;
• Banning new drilling on public lands; and
• Accounting for climate costs in royalties and doubling offshore wind by 2030 by developing renewables on federal lands.

These proposed actions are interesting from two perspectives. First, as noted by Czapla, “While Biden’s climate ‘year one’ policies emphasize increased innovation in clean energy and industrial products and processes, little of that is seen in his ‘day one’ proposals.” Indeed, the list of executive actions includes some sweeping and costly mandates that have nothing to do with innovation: banning drilling on public lands, “greening” (by mandate) government fleets, requiring climate-change disclosures, and requiring a climate-change analysis for all permitting applications. It is simply internally inconsistent to argue for innovation as a low-cost way to achieve emissions reductions and start out with these initiatives.

It is also inconsistent with the Biden campaign’s arguments on economic growth policy. As Eakinomics noted yesterday, the Biden clean energy plan is advertised as one element of his proposals that will increase the pace of economic growth. The more that this plan is implemented by regulatory fiat, the less this assertion of future growth is true. Now, it is true that Biden intends to have large taxpayer spending as well. But we have seen this movie before; the Obama years combined “green” spending in the recovery act with burdensome regulations and produced poor growth. Nothing looks different this time around.

Climate is an important issue. It should be important enough to merit an internally consistent policy that is desirable on its merits and not disingenuously offered as a means to economic growth or some other policy goal.