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Biden's Climate Legacy

Biden's Climate Legacy

Tim Mohin
17 Jan

On Monday, Joe Biden’s presidency will end. In his own words: “I have pursued an ambitious climate policy focused on growth. We were told it couldn’t get done, but we did it.”

By any objective measure, Biden’s Administration substantially advanced climate action. He oversaw a huge investment in climate mitigation, a massive increase in renewable energy (which will continue as there are many projects in the pipeline), and achieved a substantial level of decarbonization while growing the economy.

As promised, Biden rejoined the Paris Climate Accord, which put the US back into a global leadership role. On the home front, he finalized dozens of climate and sustainability policies, from tailpipe emissions restrictions, subsidies to promote solar power and electric vehicles, and banning new oil drilling in federal waters. But the climate policy he will be most remembered for is the Inflation Reduction Act (IRA) - the wonky named law that is the country’s largest-ever climate law.

In his last couple weeks in office, Biden’s Administration has been racing to allocate the IRA’s grants, with $74 billion already distributed. However, Trump has vowed to “rescind all of the unspent funds.” He now has $20 billion left that he could reverse. Whether Trump rescinds the last bit of spending or not, the legacy of the IRA will last for a generation with more than 6,000 projects invested in, which could reduce US emissions by up to 43% below 2005 levels in 2030.

Critics point out that Biden's term included a period of record oil and gas production and exports. In his first three years, the Administration issued more onshore drilling permits than Trump did in the same timeframe. Additionally, some of his proposed initiatives, like the American Climate Corps, failed to gain traction.

When Donald Trump takes the oath of office on Monday, he and his team will seek to purge Biden's climate policies. According to the WSJ, Trump is set to embark on a whirlwind of executive ordering in his first few days as President. Congress requested that some of these orders be held back so they could rescind the policies and record the savings.

The agenda is likely to include a reversal of tailpipe emissions rules and drilling bans, significant changes at the Environmental Protection Agency and the Energy Department, and a ban on offshore wind power.

Although Biden has worked hard to cement his climate legacy over the past four years, especially in the final months of his presidency, the long-term impacts of these policies are in jeopardy.

Federal Contractors Climate Reporting Mandate Dropped

Image by Jackson Lanier on Wikimedia Commons

In the first of many blows to Biden’s climate legacy, the Federal Acquisition Regulatory (FAR) Council announced on Monday that it had withdrawn the mandate for federal government contractors to report climate risks and emissions.

Released in 2022, the policy required thousands of U.S. government suppliers to disclose climate risks in line with the TCFD framework (Task Force for Climate-Related Financial Disclosures), and report their Scope 1 and 2 emissions to CDP. “Major” suppliers with contracts over $50 million would have been required to set “science-based” (SBTi) climate targets and report their Scope 3 emissions. For context, the annual spending of the US federal government is $6.75 Trillion, so this requirement would have affected more than 6,000 companies, more than 1,000 of those would have been “major” suppliers.

This policy attracted significant opposition, prompting the Department of Defense, General Services Administration, and National Aeronautics and Space Administration to withdraw, forcing the proposal to be fully withdrawn.

The Costs of a 1.5°C World

Image by Patrick Campanale on Unsplash

Last year was the hottest year ever and the first to breach a 1.5°C increase in global average temperatures above pre-industrial times (the limit thought to protect against the worst effects of climate change). This excellent series of graphs shows just how uniquely warm 2024 and, to a slightly lesser extent, 2023 were. In fact, researchers believe that 2023 and 2024 were so anomalous that they have to consider other reasons for the warming in addition to emissions.

Extreme weather events cost the world $320bn in 2024, a whopping 33% increase from the previous year. This number is a clear link between increased heat and the impact of extreme weather. That number could be eclipsed again this year with the ongoing LA fires potentially becoming the costliest disaster in U.S. history, with early estimates as high as $250 billion.

Beyond the devastating human impact, the escalating costs strain insurers, which will have long-term economic consequences.

Climate in the Courts

Image by Adam Michael Szuscik on Unsplash

Last week, we said 2025 will be another big year for climate in the courts. In the first week of 2025, two precedent-setting cases have already been decided.

This week, the US Supreme Court struck down an appeal from oil and gas companies to halt state lawsuits against them. This particular suit was the city of Honolulu's claim that the oil and gas industry misrepresented the potential for fossil fuels to cause climate change. The decision paves the way for potentially huge reparations for Honolulu and around a dozen other similar state and municipal suits. Honolulu official Ben Sullivan said, “This landmark decision ensures the protection of Hawaii taxpayers and communities from the immense costs and consequences of the climate crisis caused by the defendants’ misconduct.”

In a more confusing class action lawsuit, a pilot alleged that American Airlines’ investment managers incorporated ESG considerations into their investment decisions. The Northern District of Texas judge agreed with the pilot’s allegations that the retirement plan's "ESG activism" harmed financial performance.

Ironically, none of the airlines' pension funds were actually in any ESG-labeled funds. The decision was based on non-ESG labeled funds, which included ESG considerations as part of their proxy voting decisions (a common practice).

This precedent leaves other retirement funds open to copycat suits. As Ken Pucker says in his post on the matter, “The judge in the case entirely misunderstands the stated intention of ESG investing.” Ken also referenced a Matt Levine quote saying, “The result is apparently that investors are not allowed to consider risks if those risks are politically disfavored.”

New York Continues Hot Streak of Climate Policies

Image by Zoshua Colah on Unsplash

After the US elections, New York Governor Kathy Hochul said, “Governors filled the void of leadership during President-elect Trump’s first term, and Americans can be assured we’re prepared to fill it again.” Since then, the state’s policymakers have been hard at work fulfilling that pledge.

Just before the new year, New York unveiled a climate super fund and introduced a congestion charge for Manhattan, which took effect on January 1. Early results from the congestion charge are promising: city travel times have dropped by 30-40%, and bus routes are running up to 28% faster. The policy is also expected to significantly improve air pollution.

This week the state pledged $1 billion to decarbonize the state economy with investments in new renewables, low-carbon transport, and buildings.

Extreme Weather Looms Large in Annual Risk Report

Source: WEF Global Risk Report 2025

Ahead of the annual World Economic Forum (WEF) in Davos next week, the WEF released the 20th edition of their Global Risk Report. This year, the more than 900 experts questioned for the report ranked extreme weather events as the second most pressing short-term risk behind misinformation. However, over the next ten years, environmental risks rank as the top four most significant risks facing the world.

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