President Biden hosted the Leaders Summit on Climate (Climate Summit) on 22-23 April. The Climate Summit is a next step in the President’s plan to employ a “whole of government” approach to combat climate change. The Climate Summit, which was attended by 40 world leaders, also shows that the United States intends to become a global leader in the fight against climate change, both at home and abroad. During the meeting, the U.S., the other invited governments, and key stakeholders set ambitious goals for investing in climate solutions, supporting innovation, and creating new economic opportunities in climate action.
President Biden’s desire to take an aggressive stance on climate change has been evident since his campaign. Since taking office, the U.S. has rejoined the Paris Agreement; memorialized the President’s commitments on decarbonization, including his pledge to make the U.S. electricity sector carbon neutral by 2035 and the U.S. economy net zero by no later than 2050; and re-established the Social Cost of Carbon metric, as discussed in a previous Hogan Lovells client alert. During the first day of the Climate Summit, President Biden announced a new commitment: that the U.S. would cut its emissions by 50-52 percent below 2005 levels by 2030, in support of his view that tackling the climate change problem as a “moral [and] economic imperative.”
A number of other world leaders announced climate change related commitments during the Climate Summit. The summit is expected to set off a flurry of U.S. initiatives before the United Nations Climate Change Conference (COP26) in Glasgow, Scotland, set for 1-12 November, 2021. The COP26 will engage government leaders, climate experts, and environmentalists in a discussion on tacking climate change. We walk through some of the key take-aways and announcements from the summit below.
Announcement of new U.S. government initiatives, programs, and goals during the Climate Summit
Underscoring the “whole of government” approach to climate change, the White House used the Climate Summit as a forum for various key Cabinet members to discuss their agency’s objectives in the area, making it clear that while the White House is setting the framework, the President is counting on individual government agencies to implement his policies. Key government speakers at the Summit included the Secretaries of State, Energy, Commerce, Interior, Treasury, Agriculture, Homeland Security, Defense, and Transportation, as well as the Director of National Intelligence, the Environmental Protection Agency Administrator, the U.S. Trade Representative, and the National Climate Advisor and Special Envoy to the President on Climate.
Some of the new announcements during the Climate Summit included the following:
- Launching a Global Climate Ambition Initiative. The Department of State and the U.S. Agency for International Development (USAID), working with other agencies, will coordinate U.S. government efforts to support developing countries in establishing net-zero strategies.
- Setting ambitious benchmarks for climate investments at the U.S. International Development Finance Corporation (DFC). The DFC committed both to a net zero investment portfolio by 2040 and to ensuring that at least one-third of all its new investments have a climate nexus beginning in FY 2023. The DFC has also established a US$50 million climate technical assistance facility.
- Committing to climate investments at the Millennium Challenge Corporation (MCC). The MCC will expand and deepen work to address climate change challenges across its investment portfolio and business operations—investing in climate-smart development and sustainable infrastructure. The MCC committed that more than 50 percent of its program funding will go to climate-related investments over the next five years.
Using financing to accelerate the transition
- Scaling up international financing to address climate. By 2024, the U.S. intends to double U.S. annual public climate financing to developing countries (relative to the Obama-Administration). The White House intends to work closely with Congress to meet these goals.
- Issuing the first U.S. International Climate Finance Plan. The U.S. is publishing its first U.S. international climate finance plan, which lays out how federal agencies and departments responsible for international climate finance will work together to deliver financing more efficiently and with greater impact.
Transforming energy systems
- Establishing a Net-Zero Producers Forum. In support of efforts to achieve net-zero emissions by midcentury, the U.S., together with the energy ministries from Canada, Norway, Qatar, and Saudi Arabia, established a cooperative forum that will create pragmatic net-zero strategies, including methane abatement, advancing the circular carbon economy, development and deployment of clean-energy and carbon capture and storage technologies, economic diversification to reduce reliance on hydrocarbon revenues, and other measures in line with each country’s national circumstances.
- Establishing a U.S.-India Climate and Clean Energy Agenda 2030 Partnership. The partnership will elevate climate action as a core theme of U.S.-India collaboration.
- Supporting ambitious renewable energy goals and pathways in Latin America and the Caribbean. The Department of State announced scaled-up technical assistance to countries participating in the Renewable Energy for Latin America and the Caribbean (RELAC) initiative, a regional effort led by Colombia, Chile, and Costa Rica to increase renewable energy capacity to at least 70 percent by 2030.
Revitalizing the transport sector
- Sparking the zero-emission transportation revolution at home and abroad. The Department of Transportation will provide funding for lower-emission buses, expand access to electric vehicle charging stations, and use public rights of way in climate-supportive ways. The U.S. will also join the Zero Emission Vehicle Transition Council, a coalition of governments dedicated to accelerating the global transition to zero emission vehicles.
Supporting U.S. opportunities abroad
- Launching a Global Partnership for Climate-Smart Infrastructure. The U.S. Trade and Development Agency will launch the Global Partnership to connect U.S. industry to major energy and transportation infrastructure investments in emerging markets.
- Creating the U.S. Export-Import Bank (EXIM) Chairman’s Council on Climate. EXIM will create a Chairman’s Council on Climate, a sub-committee of EXIM’s Advisory Committee dedicated to advising EXIM on how to better support U.S. exporters in clean energy, foster the transition to a low-carbon economy, and create clean U.S. jobs at home.
Promoting innovation to bring clean technologies to scale
- Clean energy innovation and manufacturing. The U.S. Department of Energy (DOE) will define a series of performance targets and leverage the diverse expertise and talent at American universities, businesses, and national laboratories to accelerate research and development in linchpin technologies, beginning with hydrogen, carbon capture, industrial fuels, and energy storage. The targets and roadmaps will look beyond incremental advances and aim instead at the game-changing breakthroughs that will secure American leadership in the manufacture of net-zero carbon technologies and support sustainable development around the world. In the coming weeks, the DOE will convene experts from American academia, business, and the national laboratories to announce the first of these moonshot-style ventures and catalyze the breakthroughs that will grow new businesses and new jobs domestically and export these net-zero carbon technologies all around the world.
- Reinvigorating leadership and participation in Mission Innovation. The Administration announced plans to quadruple clean energy innovation funding over the next four years, and the U.S. intends to play a key role at COP26 in advancing international collaboration on innovation and supporting the launch of Mission Innovation 2.0, including launching, and leading together with international partners, a major Mission Innovation international technology mission focused on carbon dioxide removal.
- Leading the Agriculture Innovation Mission for Climate. The U.S. will lead the creation of the Agriculture Innovation Mission for Climate, along with the United Arab Emirates, to accelerate innovation and research and development in agricultural and food systems in order to spur low-carbon growth and enhance food security.
- Launching the Foundational Infrastructure for the Responsible Use of Small Modular Reactor Technology Program (FIRST). The Department of State is launching the FIRST Program with an initial US$5.3 million investment. FIRST provides capacity-building support to enable partner countries to benefit from advanced nuclear technologies and meet their clean energy goals under the highest standards of nuclear security, safety, and nonproliferation.
Climate Summit commitments across the globe
- During the Climate Summit, representatives from Japan, Canada, Britain, and the European Union also agreed to make drastic cuts to emissions. The pledges made include the following:
- Japan promised to cut emissions by 44 percent below 2005 levels by 2030.
- Canada announced it would cut emissions 40-45 percent from 2005 levels by 2030.
- Britain promised to cut emissions 78 percent below 1990 levels by 2035.
- The European Commission pledged to meet the European Green Deal goal of making Europe climate-neutral by 2050, following a new law between member states and the EU parliament to cut emissions by at least 55 percent by the end of the decade.
- China, while only making the vague promise of decreasing emissions to net zero by 2060, vowed to “strictly limit increasing coal consumption” over the next five years.
- Brazil agreed to play a role in climate goals by putting a stop to illegal deforestation by 2030. It should be noted, however, that in an interview earlier this month, Brazil’s environment minister voiced concern that Brazil lacked the resources necessary to reduce deforestation and make such drastic cuts to emissions, and has asked for US$10 billion annually in foreign aid to bolster these efforts. At the Climate Summit, Brazil asked the Biden Administration for US$1 billion in exchange for reducing deforestation by 40 percent. The international community is wary that Brazil will not actually make the promised changes even if provided the requested funds. Under current President Jair Bolsonaro’s regime, the Amazon rainforest has experienced the largest deforestation in more than a decade.
Notably, Russia and India, also major carbon emitting countries, did not make new promises on cutting emissions.
President Biden’s pledges at the Climate Summit reinvigorate the U.S.’s commitment to fighting climate change and underscore the U.S.'s desire to be a world leader in this effort. The pledges can be expected to lead to further domestic and international efforts that will widely impact and create opportunities for a broad range of businesses.
The recent U.S. absence from climate leadership had been noted by the global community, and these new efforts by the Biden Administration to take on a strong leadership role appear to be welcome.
The ambitious goals set by the White House during the Climate Summit will need support from Congress, federal agencies, and the private sector in order to realize their full potential. We expect that many of these initiatives will be further developed in the coming weeks and months as the “whole of government” approach is applied to the challenge of climate change.