What roles do the branches of government play in clean energy policymaking, and what can a Biden administration do (or not) with a small margin in the House and an evenly split Senate?
In this lightly edited conversation, CBEY's Program Director for Clean Energy chats with Yale lecturer (and former state commissioner) Robert J. Klee. They weigh legislation's odds and ruminate on executive action as the primary driver of policymaking in climate and clean energy.
If the clean energy sector can't expect supportive legislation, how should it proceed? Put on a fresh pot of coffee or steep some tea (or whatever) and let's explore paths to deployment in this unthreatening (i.e. cozy) chat.
This conversation took place between Vero Bourg-Meyer, CBEY's Program Director for Clean Energy, and Rob Klee. Rob is a lecturer at Yale Law School and the Yale School of the Environment. He served as Connecticut's Commissioner of Energy and Environmental Protection from 2014 to 2019.
Vero: So let's get started then. So the Biden administration has some impressive goals, much welcome by the clean energy industry, but they're broad climate as well as energy goals. I want to get back to basics first and set the stage for how the federal government creates and implements policy. So obviously we all know about the three branches of government, legislative, executive, judiciary, but how do the legislative branch and the executive branch, which are the ones that Democrats recently regained control over, create policy? As we look back at the climate policies of the Obama administration, which were dismantled in this systematic effort by the Trump administration over the past four years, is there an argument that we need new statutory authority, as opposed to implementing what's already there, to be truly transformational on climate and clean energy? What is the fundamental challenge in trying to make new clean energy policy with old environment laws at this point?
Rob: Yeah, so great question. And actually I would start with the judicial branch. Congress, the legislative branch, has abdicated its responsibility to create law and policy, which is its core function and mission. They haven't done that in well over 20 years now, going on 30 if you go back to the 1990 Clean Air Act amendments. Because of that abdication, the executive branch has had to step into that void and taken whatever opportunities it can find under existing law to try to regulate greenhouse gases, to try to push forward a climate agenda, to try to deal with the climate crisis we're facing.
When they do that through the administrative process, they're always sued. And it ends up … in the courts. So the judicial branch comes in, trying to interpret these fundamental basic environmental laws from the '70s, '80s, and '90s and how they apply to these new problems.
And that's where you get the Massachusetts v. EPA decision, which was a landmark Supreme Court case that said, "Yeah, the Clean Air Act, even though it doesn't say greenhouse gases, does regulate other pollutants that have the possibility of endangering human health or the environment. If EPA can figure out if GHGs are truly endangering human health and environment, EPA through its regulatory process will make that endangerment finding and then go ahead and regulate greenhouse gases.”
The attempts of the Obama administration were trying to push that envelope and really bring in today's reality that environmental issues and energy issues are really combined, you need to think about them holistically, and that's where our early, original environmental laws failed. And where there were plenty of arguments from coal interests and fossil fuels lobbies to say, "No, EPA, you can't go beyond our fence line of our facility. You only have always regulated smokestacks; you can't start engaging in markets and thinking about fuel switching.” Or “No, EPA, your job is only tailpipes and smokestacks and outfall pipes."
Vero: And that's where the judiciary comes in. But to make sure that we're super clear about this for our readers, can you clarify the difference between an executive order coming from the Office of the President and a rulemaking coming from an agency that is implementing an environmental statute? What's the difference in terms of durability and in terms of what the judiciary can do and cannot do to them?
Rob: Great question. And we probably need a Schoolhouse Rock video for all this to help us. In the executive order, which the Trump administration was a big fan of, the President as the head of the executive branch is telling all of the people that work for the President.: "I want you to repeal that law. I'm the President telling you, the EPA administrator, your list of things to do. Go engage in those rulemaking processes to achieve these goals I've set forth."
Vero: Through regulation.
Rob: Through regulation, and the administrative procedures process... not to leave the judicial branch out. Every time you're making rules and changing rules through the administrative process, there is a process you actually have to follow. And it's meant to be open and transparent, have all the right stakeholders involved, be deliberative, have justification for what you're doing, and have a recognition that your rulemaking fits under the body of law that Congress passed. You need to make all those things clear in the process, and a lot of the Trump administration's rulemakings have been thrown out in court for that reason.
So the Biden administration is now getting direction from the President via executive orders to do things that are really focused on a whole lot of those things. So that's where the President's saying to all the agency heads and cabinet secretaries from the top: “here's what I want the executive branch to do.”
But there are other parts that the President actually controls more directly and where those executive orders are not necessarily directions to agencies. In the world of international affairs, the reentry to the Paris Climate Accord is a more direct presidential choice. So is the repeal of the Keystone XL pipeline permit because it had an international component.
Others stem from statutory authority. The Antiquities Act gives the President the authority to create national monuments, like Bears Ears or - here in the Northeast - the Canyons and Seamounts Marine Monument. The Trump administration tried to shrink them. The Biden administration brings them back to their original Obama administration size.
Then the coal, oil leases, the Arctic National Wildlife Refuge, those sort of things, I think again those are more the President telling the Interior Department, “Stop. Just pause.”
Vero: Right. So, we have that reserved authority of the President, either because it stems from the Constitution, or because it stems from a particular statute giving them this authority, like in the case of the Antiquities Act. Which takes us back to the role of the judiciary in this system. Is there an unavoidable trade-off between speed and durability when it comes to climate change and energy regulation in general that's rooted in the structure of our government and a result of the pendulum of our national politics?
Is there an unavoidable trade-off between speed and durability when it comes to climate change and energy regulation in general that's rooted in the structure of our government?
Rob: I'll start with the big picture. Yes, Congress passing a bill into law signed by the President has the most longevity. You get things like the Clean Air Act that has been with us since 1970, amended in 1990, very rarely amended. That's the type of thing that can then set you on a course for decades to come. Our environmental laws are truly suffering from not having real meaningful reform, again because of a dysfunctional Congress. Absent Congress, you have the administrative rulemaking process. Which, fast and loose, was the Trump administration’s approach.
It put out there the Affordable Clean Energy rule, the replacement of the Clean Power Plan. That rule was recently struck down by the D.C. circuit because the coal lobbyists who were at the EPA at the time actually wrote it in a way that took a hyper-narrow hyper-technical view of their governing statute to try to ram through their views of what regulation of greenhouse gases should look like. And the court threw it out. This then resets the clock and restarts it and is a real win for the Biden administration because it's now nullified, blank slate, they can actually start again.
The risk in the world of these administrative actions, and with the seesaw back and forth between administrations, is that you still have to justify what you're replacing, why you're repealing, why the science, or the world, or something has changed that would require you to take that body of established evidence and accumulated information that was supposed to be there for the first regulation and set it aside.
But doing it right means, like for the Clean Power Plan, that you commit to a year-plus-long process, six million comments, going on a road show, actually engaging in stakeholders, reading and reviewing and responding to those comments. That's a lengthy process. I think the Biden administration realized it will take you a few years to see results. And unfortunately, a lot of these early years will be spent just undoing things versus new affirmative policies under the existing laws.
Vero: So do we need then new federal climate laws in general or not? We'll get to the question of filibuster in a minute, but assuming we could get a new law passed, do we need a new statute or can we get there without it?
Rob: I think there's a lot you can do without new fundamental laws where the federal government spends its money. And they spend a lot of money. This is actually a lesson to be learned from the states. The states have figured out; that your government is a large landholder, building owner, or fleet operator! Lots of vehicles, lots of homes, buildings, office buildings, and lots of land.
Vero: And that's all of the Lead By Example programs that are popping up everywhere, right?
Rob: Right, so Lead By Example has been one of those places where a state or a local government has said: "We want to demonstrate that our clean energy future is feasible.", Oftentimes a Leading By Example program is simply meant for people to see a solar panel on their town hall or school building. There’s an electric vehicle charger out in front of the municipal building and the town employee driving that vehicle says, "Wow, this is actually a nice vehicle." Now, imagine if all of our postal vehicles were electric. Imagine that for all of the fleet of cars that the US military owns (outside of wars). Imagine if all of the base housing that they own had a solar panel and an air source heat pump and an electric vehicle parked out front.
Now, when those parts of the Government spend their money this way, they spend it locally and they spend it in those communities where there are HVAC installers and vehicle salespeople, etc. The federal Government with its spending power has a big pull. And I've heard that the US military's electric load is about the size of Greece's!
Part of what Biden has done, by picking cabinet members who have discussed climate during their confirmation hearings or written about climate, is he’s built a whole-of-government climate team. So the Defense Secretary and the Treasury secretary have spent a lot of time in the first few weeks talking about climate, which is fascinating and different.
It's still important that Congress shifted, because those nomination processes will go easier and faster. The two senators from Georgia, getting partisanship to the 50/50 tie that the Vice President can break, matters a lot for the ease of getting the right team in place.
With spending, you need to think about infrastructure. An infrastructure bill is not permanent, but it has permanence because when you spend money it doesn't disappear. When you're building the infrastructure with climate and clean energy in mind, you've now invested in new transportation systems, new electrified buses, new electric transmission infrastructure, all those sorts of things that will be with us for 30 or 40 years that are critical to the clean energy transformation.
Vero: Okay, so let's pivot to the Clean Electricity Standard that President Biden and his administration have said that they want to implement. They pledge to get 100% clean energy by 2035. That's more aggressive of a goal than a lot of the most aggressive states out there like Hawaii or California. And just so we're clear about what we're talking about here, this is a Clean Electricity standard that is technology-neutral, and not a Renewable Portfolio Standard. It’s clean energy as a whole, where the government has a “get there however you want to get there” kind of approach.
Rob: And that's critical because right now we only have about 17/18% renewables and I think it's about 20 to 30% nuclear. You need that nuclear as zero-carbon base load, you're going to need that hydropower and you're going to really need to be shifting away from fossil resources everywhere else.
Vero: To do it quickly, you mean.
Rob: On that time scale, yeah.
A standard, non-budget related bill would be 60 votes. That’s because of the filibuster rule, which is an archaic creation of the Senate that has a not so glorious past and has been used to perpetuate the power of Southern states and all those not so great things in our history.
Vero: For a clean energy standard to pass the House, how many votes would you need?
Rob: To pass the House, you just need a majority.
Vero: And to pass the Senate, how many votes would you need?
Rob: That's a trick question.
Vero: To pass under the current rules without changing anything, without maneuvering, with a filibuster in place. Just a non-budget, straight-up normal bill.
Rob: A standard, non-budget related bill would require 60 votes. That’s because of the filibuster rule, which is an archaic creation of the Senate that has a not so glorious past and has been used to perpetuate the power of Southern states and all those not so great things in our history. So the filibuster is steeped in this tradition… and it's only been really weaponized frankly in the last 10 to 20 years. Now they do nothing without the 60 votes, which wasn't the case two or three decades ago.
The filibuster’s companion is something called the cloture rule. Together, they allow any senator right now to hold the floor as long as they want. They don't actually even have to stand there and talk, they've managed to bend the rules so they can just say, "I'm filibustering", then walk and go home and have dinner.
There was a time when you actually would have to stand there and hold the floor and read Green Eggs and Ham and whatever you want to just keep a vote from happening. But that doesn't happen anymore. Then you need 60 votes to invoke cloture. In essence, the 60-vote cloture vote means, "Okay, your debate is going to be over in 60 more hours." So it doesn't even end it, it gives it another 60 hours to run its course!
Vero: So we have three options to pass a clean energy standard bill in the Senate. Option one is filibuster and cloture. Option two is getting rid of the filibuster. And option three is budget reconciliation.
Rob: Yes, if you're talking specifically about a clean energy standard or something that's considered more of a progressive or aggressive climate action. Now, the filibuster may not be imposed on some of the bipartisan bills that are trying to do incremental improvements. But something big would need to either make it to 60 votes to stop the filibuster, would have to have the rules changed so that there is no filibuster, or would have to attempt to pass it through what's called the budget reconciliation process.
Vero: So here's where budget reconciliation gets really interesting. My understanding is that it’s a process by which a budget resolution about increasing or decreasing the federal government’s revenue, or increasing or decreasing its spending, or somehow adjusting the debt limit is passed by the Senate. Passing that resolution requires the person in charge of the budget committee, currently Vermont Senator Bernie Sanders, to usher it through the committee. The vote can happen with a simple majority, which is more attainable than the filibuster voting requirements.
Don’t the rules clearly state that this budget reconciliation process can’t be used for policy-making though, but only for spending, taxation, or debt? How is that going to help the government create a standard?
Rob: So on the spending side, the budget resolution sets out the spending of the Government, and the resolution directs the Congress to use the reconciliation process to move it fast. Then there are limits on the type of moves you can make on discretionary spending in a budget reconciliation process. The reconciliation is actually meant to tweak the nondiscretionary spending to cover other spending gaps. So you can't necessarily give more money to the EPA through the reconciliation process, that's actually set at that first budget resolution stage.
But getting to your original question, once we figure out the intricacies, you can raise also revenue, so I would worry less about spending and focus more on taxing. The taxation process is the place where I think you'll find the most creative use of budget reconciliation. Because the other thing that I think you're referring to is something that's referred to as the Byrd rule, referring to now dead Senator Robert Byrd of West Virginia, whose legacy keeps living on, that doesn't allow you to make policy [through budgeting] or it tries to narrow what the Senate can do.
Vero: And it's the same Byrd from the Byrd-Hagel resolution, right? Same guy?
Rob: Oh yeah, same guy. Well, he was in the Senate for like 70 years too. So you can't really make new policy, you can't change policy, but you can still do things that are taxing and/or raising revenue and/or distributing revenue. And one of the creative ways on the clean energy standard piece is to use federal charges on the use of wires in long distance transmission. So there's already an established place where the feds are taxing our utilities for the federal transmission of power. Imagine if you had a fee or rebate structure on that tax, where if the energy that your utility was putting out onto those wires was more carbon-intensive, it pays more. If it's less carbon-intensive, it pays less. And in that way, you could, through taxes, fees, and rebates, drive those entities to use or to source their energy from cleaner sources to avoid paying that additional fee.
Vero: So essentially you would create the compliance and incentive structure of a traditional clean energy standard, without creating the standard itself. Without having to set an actual bar. Without saying, "We want x% to be clean energy."
Rob: Yeah. So that model works for vehicle standards too. And California and their resources board has always advocated for the feebate/rebate version of vehicle regulation. So you could in essence beef up the Corporate Fuel Economy Standards by having a similar gas guzzler tax and zero-emission vehicle rebate system where you're charging more for vehicles, and through the tax structure they have to pay more if they're a gas guzzler. And that money that you raise would actually go to a rebate incentive for the more efficient vehicles. And what's great about this in the budget context is they're actually revenue neutral over the long term, which satisfies another restriction - that one's on not raising the deficit after 10 years.
Vero: Could a carbon tax be added through this budget reconciliation?
Rob: Yeah. That's what some of the experts are saying. But I would step back a moment, and you still need to get 50 votes on it including Senator Manchin from West Virginia, so you're limited in some ways in how aggressive you can be. So that may mean that how aggressive, how ambitious these types of clean energy approaches and budget reconciliation get will be tempered by the counting of heads and how many votes you can actually get. But because they're tax and revenue related, they fall into the general framework that is allowed under budget reconciliation.
Vero: What about FERC’s role in this whole thing. Could FERC impose a standard under their existing authority?
Rob: I would say maybe, it's a little unclear. Though, they're already exploring ways to incorporate carbon fees, carbon charges, other sorts of things. This again would be one of those places where clarity in their mandate, having an actual statutory update that says to them, "FERC, yes, your goal is to ensure reliable affordable and sustainable energy and clean energy", would make the difference. We're seeing mandates like that in DC and Connecticut.
Vero: And that would require a statutory authority?
Rob: This sort of gets back to the discussion we had on the administrative actions of the EPA and other things. There is a potential legal risk that a court might overturn it and say, "No, you stepped out of the bounds. The bounds are here and you're operating outside of those bounds of your statutory mandate." Which is why, again, back to our original discussion, the fundamental update to our foundational environmental laws and energy laws is important.
Now, there's some existing authority that FERC already has particularly on transmission and other things that haven't been used. FERC was given some new authority about opening up transmission or engaging more in electric transmission under Bush. FERC already has the ability to do pipelines and really drive siting and development. They don't have that as much on the electric side, though everyone recognizes that there's been a lot of really good analysis.
So there are ways that FERC might be able to jumpstart those types of transmission investments that are directed at unlocking clean energy, versus the current fragmented system of utility-driven transmission investment that isn't for that. This goes back to who is appointed; do they have this as part of their worldview, mandate, and direction from the Biden administration? Do they say, "Yeah, we want a new FERC to figure this out"?