With Democrats now in control of both houses of Congress, environmental and climate change issues will play a more prominent role in legislative deliberations in the United States over the next two years, and beyond. The Georgia Senate results enable Congressional Democrats to facilitate President-elect Biden's ambitious path toward a lofty aspiration of a "100% clean energy" economy with net-zero greenhouse gas emissions by 2050. As the new government takes shape, the number of overlapping environmental and climate plans offered by Democrats over the last several years will receive renewed attention, including most prominently Biden's $2 trillion dollar climate plan.
Still, any ambitious landmark climate change legislation will face a steep uphill battle in light of Democrats' thinnest of margins in both houses of Congress (particularly in the Senate). Absent the elimination of the Senate filibuster or the use of budget reconciliation, comprehensive reform through a singular bill is unlikely. Instead, Democrats may learn from their failed attempt to pass economy-wide cap-and-trade legislation through a unified Congress in 2009. They may consider eschewing a single, major legislative proposal and, instead, embedding climate change provisions in myriad pieces of legislation to implement a comprehensive climate strategy in a more bottom-up approach. We do not anticipate that in 2021 Congress passes the Green New Deal, a fracking ban, or a full repeal of the 2017 Tax Cuts and Jobs Act to fund an ambitious environmental agenda. Neither do we expect to see a climate-focused overhaul of the National Environmental Policy Act (NEPA).
Rather, this newly unified government-which will require the cooperation of the more moderate members from both parties-is likely to look to more politically palatable, incremental ways to accelerate the United States' response to environmental and climate impacts with an economy still struggling from a global pandemic. Given these constraints, we expect short-term legislative priorities of Congress and the President-elect to include infrastructure, transportation (especially motor vehicles), and energy efficiency as modest, but tangible, ways to refocus the Trump Administration's nationalist, fossil-fuel-based approach through a more renewable, climate-friendly, environmentally just lens. Lastly, Democrats may be reluctant to use the oft-discussed Congressional Review Act to overturn late-term Trump Administration rules due to the law's prohibition on the promulgation of similar rules, and instead rely on the regulatory process to rescind or replace them with rules that include stronger climate protections.
A number of Democrats will encourage Leader Schumer and Speaker Pelosi to use the budget reconciliation process, but this would require some deft legislating to amend a rule to allow for consideration of legislation beyond mandatory spending and revenue measures. If Democratic leaders decide to pursue the budget reconciliation process to move climate policy, and are successful in amending the rules, that legislation can be much more ambitious. This special mechanism used to pass the Trump tax reforms, as well as the Bush tax cuts, allows for the Senate to pass legislation with a simple majority and prevents the use of the filibuster. If Democrats decide to use the budget reconciliation process to pass climate legislation, the approach will still require approval from moderates such as Senators Joe Manchin (D-WV) and Kyrsten Sinema (D-AZ), but Democrats may not need any Republicans to support the effort.
While the first 100 days of his presidency are unlikely to yield comprehensive legislative reforms, a Democratic Congress gives President-elect Biden more cover to take bolder steps to "Build Back Better." In the short term, the narrow Democratic majority in the Senate (when considering the tie-breaking vote of Vice President-elect Harris) means that Biden has a clear path toward the prompt confirmation of his nominees to lead executive branch agencies, including the Environmental Protection Agency, Department of the Interior, Department of Energy, Council on Environmental Quality, and Department of Justice. Following the confirmation of those agency heads, expect to see relatively quick action to achieve the more realistic components of his environmental agenda that do not require congressional authorization or appropriations. These could include initiating the process to rescind and replace Trump-era rules related to methane and other greenhouse gas emissions from both stationary and mobile sources, scientific transparency in the rulemaking process, protected species, and NEPA implementation.
While there will be much optimism for an ambitious climate agenda under a newly unified government, Democrats will continue to be constrained by the narrow margins in the House and Senate. Nonetheless, various Congressional rules changes or procedures are now available to them that could lead to more robust climate and environmental legislation. President-elect Biden and Congressional leaders will need to decide if they are going to make climate change a priority that warrants the use of budget reconciliation or filibuster reform, or if they will rely on a more targeted strategy of winning smaller victories wherever feasible.
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