President-elect Joe Biden will have an influential tool at his disposal to boost clean energy technologies and slash carbon emissions: the purchasing power of the federal government.
In his campaign climate plans, Biden promised to use the federal government's $500 billion-per-year purchasing power to “drive toward 100 percent clean energy and zero-emissions vehicles.”
Biden has also pledged to expand federal procurement even further, by an additional $400 billion over his four-year term. A major focus of that increase, his climate plan says, would be to buy technologies such as batteries and electric vehicles “that will help position the U.S. as the world’s clean energy leader.”
Such increased government spending will give conservative budget hawks pause, especially spending on certain technologies, such as low-carbon fuels and electric cars, that they say are more expensive. Tom Pyle, president of the American Energy Alliance, said Biden is likely to reinstate Obama-era directives to green the Defense Department, "throwing all kinds of money at fuels that cost four to five times more per gallon or unit."
He added he expects the Energy Department would play a central role as the "piggy bank" for renewable energy programs.
Even so, conservatives suggest Biden might not get much pushback from Congress.
"The one thing that Republicans and Democrats are agreed upon is their willingness to and eagerness to waste large amounts of other people's money," said Myron Ebell, energy and environment director at the Competitive Enterprise Institute. Nonetheless, he said Biden has leeway to alter how the government spends its money, so long as the administration stays within the budgets Congress gives him.
Whereas other doors for policies to curb emissions, such as Congress or regulations at federal agencies, are "closed to the Biden administration, this is one that's wide open," Ebell added.
For example, Biden could require federal agencies to buy increasing shares of renewable electricity as part of a broader mandate to reduce the government's carbon footprint. He could direct the Defense Department and other agencies to explore low-carbon fuels and technologies such as carbon capture and storage and advanced nuclear energy.
Biden could demand federal agencies to improve the energy efficiency of their buildings and purchase more energy-efficient appliances. And he could move to switch over the federal government’s expansive fleet of vehicles to electric or zero-emission options.
In addition, Biden could make it easier for federal agencies to purchase lower-carbon materials, opening the door to “Buy Clean” policies at the national level that could require the government to consider suppliers’ emissions performance when buying products such as cement, steel, and chemicals.
The enormous spending power of the federal government gives Biden major, and near-immediate, influence on clean energy markets.
“The government buys a lot of things, and part of what they buy is energy. They buy all kinds of products,” said Conrad Schneider, advocacy director for the Clean Air Task Force. “Using the power of the purse to procure clean energy and be able to bring new, emerging clean technologies into commercialization is actually a very, very powerful tool.”
Biden could begin doing much of this through executive action in his first days in office.
Federal agencies such as the Defense Department, which itself has large purchasing power, and the General Services Administration, which oversees government procurement more generally, could begin regularly purchasing low-carbon fuels or contracting with organizations whose products are lower-emitting, said Sasha Mackler, energy project director at the Bipartisan Policy Center.
Biden could look to the Obama administration for a starting point. In 2015, former President Barack Obama issued an executive order directing federal agencies to cut their emissions, with a goal of reducing direct government emissions by at least 40% over 10 years.
That executive order included targets for federal agencies to increase their consumption of renewable energy, an approach Biden could replicate with more aggressive targets. For example, the American Wind Energy Association calls on Biden to issue an executive order in his first days directing the government to buy renewable energy for 35% of its electricity by 2025.
“It would be more than simply leading by example. It would also provide a driver to the market,” said Abigail Ross Hopper, president and CEO of the Solar Energy Industries Association. She also noted there is “untapped opportunity” to deploy rooftop solar on public buildings.
Other groups are hoping Biden looks beyond just renewable energy, using procurement to boost more nascent technologies such as carbon capture and removal, advanced nuclear energy, and battery storage.
The government’s weight could have a bigger influence for those technologies, where first-wave projects can cost multiple billions of dollars, making initial customers hard to find. Once technologies make it through the "commercialization valley of death," costs typically begin to drop dramatically and steadily, Mackler said.
“It’s not necessarily about the federal government alone being able to address all of the emissions in a certain industry or sub-sector,” said Ryan Fitzpatrick, climate and energy director at the center-left think tank Third Way. “It’s about providing the market for higher-performing facilities or for less-emitting commodities or products to get their foothold into the market."
Biden will have limits, though. His biggest restriction will be simply the size of agency budgets, which Congress dictates and has the sole power to expand.
Congress could also provide Biden with new authorities. For example, Mackler noted bipartisan legislation currently pending in the Senate that would allow the federal government the ability to enter into long-term power purchase agreements for nuclear energy projects.
Biden’s climate-focused procurement isn’t likely to just focus on energy, either. Readying a big push on infrastructure and industrial manufacturing, Biden could set the stage for government purchase of lower-carbon materials, encouraging cleaner manufacturing in the United States.
Mike Williams, interim co-executive director for the BlueGreen Alliance, a coalition of labor unions and environmental groups, said Biden should start by increasing transparency around the carbon emissions embedded in materials such as cement and steel. Biden has relatively broad leeway to do so through an executive order that could include creating a federal database listing the carbon and toxic content of materials, he said.
Biden could then follow up with “Buy Clean” standards, Williams added, though he cautioned those should be coupled with federal investment and trade policy to support U.S. manufacturers so they wouldn’t be disadvantaged by any emissions requirements.
Ultimately, clean energy advocates are hoping Biden can help bring the costs down for technologies needed to decarbonize industrial manufacturing, in the same way the Obama administration achieved results for wind and solar.
“Utilities are now deploying wind turbines and solar panels at an incredible rate, and the progress is snowballing," said Matt Bright, a climate and energy policy adviser for Third Way. "We’re trying to achieve a similar level of growth for the U.S. industrial sector using Buy Clean as a major policy lever."