CLIMATE LEGACY — It may have seemed like President Joe Biden was wish-casting into the Amazon over the weekend when he said that his climate agenda can’t be reversed, but he might have a point. Broadly speaking, the private sector — as in, the companies actually responsible for climate change — isn’t likely to scale back its green transition plans because of Trump alone. What will likely change: Where the pressure points are on climate. “If you don't see the action coming from the policy environment [under a Trump administration], arguably, there'll be more pressure on the private sector,” said Alison Taylor, clinical associate professor at the NYU School of Business with a focus on sustainability. “This energy has got to go somewhere. A lot of corporations are underestimating angry employees, angry consumers, more campaigns, more activism. There's a lot of point pressuring Joe Biden over climate. There's not that much point pressuring the Trump administration.” “And so where will all that energy and money and pressure and people who care deeply about this go? I think it's going to go back toward the private sector.”
The regulatory environment is just one piece in how companies make business decisions, particularly those related to reducing their carbon footprints, according to Michael Littenberg, a Ropes & Gray law partner specializing in environmental, social and governance issues. “You’re not just managing to U.S. regulatory requirements, but you're managing to regulatory requirements globally,” Littenberg said. “And often where companies have the same or similar products they sell across the world, they wind up having to manage to the lowest common denominator. So maybe you get some kind of extra breathing room under U.S. regulation, but you still have to manage to what commercial customers want, which goes beyond regulation.”
Expect significant business resistance to GOP threats to claw back unspent money from Biden’s climate and energy laws, on everything from carbon capture and hydrogen to critical minerals. Companies are counting on those incentives to scale and grow new clean domestic manufacturing projects and are looking for assurances on policy certainty and durability. A trade group representing the major automakers is already urging Republican lawmakers in Congress to preserve the full suite of electric vehicle incentives included in the Inflation Reduction Act. Exxon Mobil Chair and CEO Darren Woods told POLITICO that he doesn’t want to see the Biden-era clean energy programs completely dismantled. Tom Michels, director of government affairs for United Airlines, said in an interview that his company will be “advocating hard” to preserve and expand tax credits for sustainable aviation fuel. That argument could resonate with GOP members representing rural districts where farmers could benefit from biofuels. “We are meeting business imperatives here,” Michels said. With most IRA benefits flowing to red districts, there's a chance that lawmakers from both parties may align in efforts to sway Trump away from his desire to pull the plug entirely.
Rep. Andrew Garbarino (R-N.Y.) vowed that the Republicans who signed onto a letter he led warning against repeal of the IRA’s clean energy tax credits won’t cave when Trump becomes president. And outgoing Washington Democratic Gov. Jay Inslee predicted that Trump won’t be able to secure the votes to “pry jobs out of a Republican congressman’s district.” “I don't anticipate any meaningful change in our plans,” Michels said. “Our commitments are very long term. You can't run a business [based on four-year election cycles]. The one thing that is always clear is that the government will change.”
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