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The Democratic presidential nominee has put forth a far-reaching
US decarbonization plan, seeking to eliminate emissions from the
power sector by 2035 and the economy as a whole by 2050. The
ambitious "Biden Plan" released this summer was framed in the
context of job creation and infrastructure investments, but
envisioned a much more rapid energy transition than most policy
proposals over the past decade. President Donald J Trump, on the
other hand, would likely continue to further an agenda of relaxing
environmental regulations and supporting fossil resource production
and use.
Both policy platforms face a variety of implementation and
efficacy challenges. The makeup of the US Congress will, of course,
factor into policies requiring enabling legislation. While the long
term goals of the Biden Plan would dramatically reshape how energy
is produced and used (with many parallels to our
Fast Transition scenario), there are several more focused and
specific federal policy changes that could plausibly emerge early
in a Biden administration. Only some would necessitate a supportive
Congress. The most impactful early prospects include:
Regulatory appointments would likely reduce hurdles for
states pursuing their own clean energy agendas. Offshore
wind and some onshore renewable development driven by state
policies can be influenced by those appointed to key federal
positions, most notably at the Bureau of Ocean Energy Management
(BOEM) and the Federal Energy Regulatory Commission (FERC). BOEM
permit delays have slowed the progress of two notable offshore wind
projects on the east coast, a course likely to be altered under a
Biden administration. Some recent FERC rulings have the potential
to challenge the states' pursuit of renewable energy goals at the
lowest cost. If elected, Biden would appoint a new chair in 2021,
and a FERC with a Democratic majority would likely be substantially
more accommodative of state policies than the current FERC.
Tax credit extensions would increase already
significant wind and solar growth expectations.
Congressional extension of tax credits to wind and solar resources
—similar to what has been included in recent legislative
proposals such as the GREEN Act—would increase IHS Markit's
outlook for new supply by roughly 40% over current expectations for
the 2024-29 period.
A number of other policy actions would have more
material impacts but not before 2030. A Biden
administration would likely reverse course on federal land
drilling, attempt to tighten the regulation of greenhouse gas (GHG)
emissions from fossil-fueled power generation, and accelerate
decarbonization of nonpower sectors. A focus on deploying advanced
heating and cooling systems could have significant upside for both
natural gas and electricity consumption, but would likely take the
better part of a decade to result in truly meaningful changes to
annual consumption. Another aspect of Biden's energy policy vision
to achieve net-zero economy-wide emissions by 2050 would be to
encourage adoption of zero emissions vehicles (ZEV). Biden's
platform includes a plan to support building 500,000
electric-vehicle (EV) charging stations to help kickstart this
transition. Perhaps more importantly, a Biden administration would
also likely move to reinstate California's waiver to set its own
fuel economy standards and accommodate state policies in other
regards.
These policies established early in a Biden term would be of
foundational importance to a long-term energy transition, although
significant impacts would be unlikely to emerge until the 2030s and
would require ongoing policy support.
Patrick Luckow, an associate director of IHS Markit Gas,
Power, and Energy Futures, focuses on regional and national carbon
policy and associated markets, including the Regional Greenhouse
Gas Initiative and the linked, economy-wide greenhouse gas markets
in California and Quebec.
