Category: White House

What Happened on Tuesday?

What Happened on Tuesday?

sgicoalition

By Frank Sherman

The busy news cycle didn’t give enough attention to the signing of the Inflation Reduction Act (IRA) by President Biden this past Tuesday, representing the single largest action ever taken by Congress and the U.S. government to combat climate change. It has been a long time coming since the first Congressional hearings on the topic in 1988. Not that Congress hasn’t tried. There have been plenty of false starts on legislation to tackle GHG emissions; however, various forces profiting or otherwise benefiting from the fossil fuel economy have prevailed…..until Tuesday.

While the size of the package is a fraction of the Build Back Better Act passed by the House in November, the emissions reduction components are nonetheless robust and effective. The climate solutions and environmental justice provisions in the $369-billion package will impact nearly every corner of the US economy. Given the unanimous opposition to the bill by Republicans and the slimmest of margins in the Senate, the Democratic reconciliation bill also contains some financial support for the fossil fuel sector, but, as a whole, it represents a major step forward in the fight to preserve a livable planet.

What does $369 billion buy you (EarthJustice)?

  • Accelerates the clean energy transition and lowers energy costs by…
    • Expanding access to clean energy by making clean energy tax credits more accessible and extending them by 10 years.
    • Creating jobs and increases our country’s energy security by investing $60 billion in manufacturing solar panels, batteries, and other clean energy technologies in the U.S.
    • Providing funding for low-income families to electrify their homes, including $9 billion in home energy rebate programs.
    • Removing barriers to community solar.
  • Helps transition the transportation sector away from fossil fuels by…
    • Proving tax credits for electric vehicles;
    • $3 billion for the U.S. Postal Service to electrify its fleet;
    • $1 billion for clean school and transit buses, garbage trucks, and other heavy-duty vehicles, prioritizing communities overburdened by air pollution; and
    • $3 billion to clean up air pollution at ports by installing zero emissions equipment and technology.
  • Supports communities of color and low-income who face disproportionate harms from pollution and the climate crisis with…
    • $3 billion for community-led projects;
    • $315 million for air monitoring; and
    • Reinstatement of the Superfund Tax.
  • Advance practices that make farming climate-friendly with…
    • $20 billion to help farmers and ranchers shift to sustainable practices like crop rotation and cover crops; and
    • $300 million for research into the climate impact of agricultural practices.
  • Support natural climate solutions with…
    • $2.6 billion in coastal resilience grants to fund projects;
    • $1 billion to ensure federal agencies can conduct robust environmental and NEPA (National Environmental Policy Act) reviews;
    • $250 million to implement endangered species recovery plans; and
    • $50 million to advance protections for mature and old-growth forests.

Individuals will see these benefits with a 30% tax credit for installing residential solar panels; up to $7,500 tax credit for purchasing an electric vehicle; up to $14,000 credits for home energy efficiency upgrades, including up to $8,000 to install a heat pump; and an average savings $1,800 per year on energy bills and make their costs more stable and predictable compared with volatile fossil fuel prices.

The IRA represents major progress by Congress, but more action will be needed for the US to meet its 2030 target of reducing emissions by 50-52% below 2005 levels (Rhodium Group). This restores some credibility to the US to maintain global leadership on climate change. The effort is by no means over. Eve with the IRA enshrined as law, we must advocate, and ask our portfolio companies to do the same, with federal agencies and states, as well as Congress, to pursue additional actions to close the emissions gap.

You may have missed it, but Tuesday was a great day for people and planet.

Barely Building Back Better

Barely Building Back Better

Natalie Wasek

All eyes and ears are open to learn what might be cut next from the Biden Administration’s Build Back Better Plan. News reports are fast and furious with the latest hints that come out of the room where it happens. The social policy bill initially set at $3.5 trillion is being cut to under $2 trillion resulting in a debate over what can be cut out and not be missed, and what can be decreased and still make an impact. 

This isn’t however, just about the top line cost decision, though it is being presented that way by the media. The impact on real people and society cannot be separated from this price tag. The focus has been on the cost of the bill if it passes rather than the cost to society if this doesn’t pass. 

The bill includes policies for child tax credits, paid family and medical leave, lower childcare costs, lower higher ed costs, lower prescription drug prices, clean energy and electricity, forest management, penalties for methane leaks, and programs for the formerly incarcerated, among others. Corporations are actively lobbying against the bill, in opposition to increased corporate taxes, expanded Medicare, and fees for carbon emissions. Yet businesses admit that they will benefit from the childcare, healthcare, education and climate provisions in the bill. One Senator remains firmly against the clean electricity provisions in the bill, despite the fact that his state of West Virginia is the most vulnerable to flooding due to climate change (The Daily, Oct 20, 2021). Another Senator opposes any corporate or income tax rate increase yet voted against those Trump-era tax breaks in 2017 (MSNBC, Oct 21, 2021).

SGI members had an opportunity to discuss the Build Back Better plan at our fall meeting. We discussed how SGI’s priorities align with the proposed plan and asked “if you were in Congress and had to make the decision, what would you cut from the bill?” It is not an easy question to answer, nor were we necessarily looking for our members to have the answer. Rather, we wanted our members to better understand the impact this bill could have on families, society, and the climate crisis. 

Rev. Dr. Liz Theoharis put it simply when addressing attendees at our annual conference: “we have to restructure our society around the needs of the poor.” If we created this divide and allowed poverty to exist, we can restructure the economy to get rid of it. This bill, if not cut to mere scraps, could have a significant role in doing just this. 

SGI members disagree that the U.S. can’t afford the bill, and believe that the positive impact would far outweigh the monetary implications that are being argued over. This seemingly endless debate is a balancing act: weighing the impact of social safety against climate change. Paid family leave and child care, which are ways to address poverty, would make for better employees and thus be good for business. And, at this point in the game, one would think that the climate crisis should speak for itself. However, ironically, the US and 14 other countries are pledging to increase fossil fuel extraction over the next decade. 

This is all to say that the challenges the Build Back Better Plan hopes to address are not going to disappear and will only get worse. 

As investors, SGI members are engaging companies on many of these issues, stressing the importance of climate action, paid family leave, affordable drug pricing, responsible lobbying, etc. They see the importance of putting dignity to workers and individuals first and are asking companies to do the same. But we also know that these voluntary actions are not enough. It’s time for our elected officials to stand up.

SGI Joins Business Leaders In Calling For Aggressive Climate Targets

SGI Joins Business Leaders In Calling For Aggressive Climate Targets

Chris Cox

By Frank Sherman

President Biden will host 40 world leaders next week in a virtual Leaders Summit on Climate to galvanize support to tackle climate change. Having rejoined the Paris Climate Agreement on his first day in office, Biden wants to retake global leadership of this existential issue to underscore the urgency and economic benefits of stronger climate action.

Before the Leaders Summit, the Biden Administration will announce a new U.S. Nationally Determined Contribution (NDC), an emissions reduction target for 2030. Upon signing the Paris Agreement in 2015, each of the 190 participating countries submitted their initial NDC. President Obama pledged to cut U.S. emissions by 26-28% below 2005 levels by 2025. We are currently less than halfway to our original goal. Under Paris, countries are expected to submit updated commitments every five years.

Today, the We Mean Business Coalition announced that 310 businesses and investors, including Google, McDonalds, Walmart, CalSTRS……and Seventh Generation Interfaith, have signed an open letter to President Biden indicating our support for nearly doubling the emission reduction targets set by the Obama administration. This is consistent with the Intergovernmental Panel on Climate Change (IPCC) conclusion that, to have any chance of limiting temperature rise to 1.5˚C, global emissions must fall at least 50 percent by 2030. Corporate executives called the 50% reduction target “ambitious and attainable.”

For SGI, the decision to sign is fairly straight-forward. The COVID-19 pandemic and racial justice concerns may have overshadowed the climate crisis in the news much of last year, but the climate crisis will continue its march as the 21st century’s most dangerous and intractable threat. Hence, SGI members continue to engage companies to address the risks and opportunities of the warming planet.

Business leaders’ decision to break with Republicans in the post-Trump era follows similar moves on voting rights and racial justice. They risk further alienating Republicans by pressing Biden to aggressively combat climate change. But they also recognize the risks and the benefits posed by the climate crisis. In a counter argument to the fossil fuel narrative that climate action will cost jobs and raise energy costs, Patrick Flynn, vice president of sustainability for Salesforce, which signed on to the letter, said he hopes businesses will lobby Congress to support the Biden administration’s target. “We know it will create millions of jobs, we know it’s a good thing for the economy, and we know if we do it right we can do it in a way that leaves no one behind” (NYT, April 13, 2021).

These are historic times. When your grandchildren ask you someday in the future… “where were you when these decisions were being made?,” you’ll be able to tell them that you were on the right side of history.

Reflections on the 2020 Election

Reflections on the 2020 Election

Chris Cox

By Frank Sherman

Like many in this country, I was glued to the TV and cell phone last week waiting to hear the final outcome of the most contentious election in modern history. I volunteered for the first time at a polling location on the south side of Milwaukee to see Americans turned out in record numbers to vote in the midst of the worst pandemic in the last century.

Shortly after the race was called for Biden & Harris on Saturday, ICCR issued a statement saying “We have faced many obstacles and headwinds over the last four years… we must turn the page and get back to work.” Ceres said the election results are a “win for our health, our planet, our economy and our future.” The Catholic Climate Covenant added “the work begins anew to heal together and to work together to protect God’s creation.” I must admit, my heart rate lowered… until Monday morning when reality set in.

The cover article of The Wall Street Journal stated that the election looks like it may yield a “dream scenario for business: a moderate Democratic president whose more aggressive plans can’t pass the Senate, but who eschews the unpredictability that has often marked the Trump administration”. As COVID infections and hospitalizations hit new records this week, and unemployment and food bank lines grow ever bigger, the stark realities facing the next Administration…and us…came back into focus.

So what can we take away from this election? Analyst Bruce Mehlman states that, although President Trump lost for failing to competently manage the pandemic and for sowing excessive chaos and division, House Democrats lost because voters feared too-aggressive ‘socialist’ policies from the Left. We learned that the electorate is not monolithic….and the 72 million Trump voters are not all white nationalists. Many fear that globalization and technology threaten their jobs; their voices aren’t heard by the coastal elitist; and they fundamentally disagree with some policies offered by the Left (e.g. defunding the police, decriminalizing the border, ending fossil fuels, higher taxes).

Our nation remains closely and bitterly divided. Both parties face internal battles over future direction and leadership. Biden is viewed as a transitional leader, hired to manage COVID and bring back civility to our politics. A divided Congress will limit his options. He’s already dismissed      Healthcare For All, the Green New Deal, and a Wealth Tax from the progressive wing of his party. He will now have to rely on executive orders and his regulatory authority to even execute his more moderate agenda.

But there are reasons for hope. Biden is a legislator with a history of finding common ground with Congressional opponents. He is an institutionalist with respect for the people, processes, and      protocol that make government work. The business community recognizes the growing expectations of their stakeholders, asking for them to stand for a higher purpose and to speak out for more inclusive and equitable public policy. The global investor community is demanding corporations to address their environmental and social impacts that haven’t yet appeared on their quarterly earnings statement.

I don’t expect the GOP to suddenly take a knee, like the guards in the Wizard of Oz, to say “All hail Dorothy. The wicked witch is dead!”; no more than I expect Senator Bernie Sanders to invite Senator Mitch McConnell over for Thanksgiving dinner. But as we approach the holiday season, we all can learn from the words of that great and powerful Wizard: “A heart is not judged by how much you love; but by how much you are loved by others.”

A USDA Christmas

A USDA Christmas

Natalie Wasek

It’s hard to think about fall and winter holidays without thinking of food. Thanksgiving turkeys, Christmas roasts and cookies, and plenty of latkes and chocolate gelt are on everyone’s minds for the last two months of the year.

On December 4th, the USDA changed the Supplemental Nutritional On December 4th, the USDA approved changes to the Supplemental Nutritional Assistance Program (SNAP). Despite receiving thousands of negative comments, they proceeded with the first three proposed changes to the SNAP, all of which are expected to go into effect before the next presidential election.

Starting April 1, 2020, SNAP benefits will be cut for roughly 700,000 individuals, by reducing waivers and introducing new work requirements for able bodied adults without dependents. NPR Stated, “SNAP statutes already limit adults to three months of benefits in a three-year period unless they meet the 20 hours per week [work] requirement, but many states currently waive that requirement in high unemployment areas.” This rule change will make it more difficult to get this waiver. This initial change is expected to ‘save’ over $5 billion over the course of five years. 

The other two proposed rule changes would:

  • Close a “loophole that allows people with incomes up to 200 percent of the poverty level — about $50,000 for a family of four — to receive food stamps” and “prevent households with more than $2,250 in assets, or $3,500 for a household with a disabled adult, from receiving food stamps.”
  • Cut close to $4.5 billion “from the program over five years, trimming monthly benefits by as much as $75 for one in five struggling families on nutrition assistance.

If all of these proposed rule changes go into effect, approximately 3.7 million fewer people and 2.1 million fewer households would have received SNAP in an average month (Urban Institute).

According to the USDA website, SNAP provides nutrition benefits to supplement the food budget of needy families so they can purchase healthy food and move towards self-sufficiency. These changes are proposed in order to ‘cut costs and help individuals achieve this idea of self-sufficiency’. However, access to SNAP allows individuals to support themselves and provide nutritious food for their families. Many believe these changes affect not only the individual’s ability to pay for other necessities, but will add stress to local food pantries and other non profits (Lohud, Dec 10, 2019). These changes will lead to an increase of food insecurity, devaluing of life, and challenge the idea that dignity belongs to every human being. “In this case, the result is more hunger and hardship for the members of low-income families who are doing their best to make sure everyone is cared for” (The Atlantic, Dec 10, 2019).

As we gather around Christmas dinner with our families, let us pause for those among us who go without.

EPA Rolls Back Auto Fuel Efficiency Standards

EPA Rolls Back Auto Fuel Efficiency Standards

Chris Cox

By Frank Sherman

Yesterday, the EPA announced a long awaited rollback of federal fuel economy standards for cars and light-duty trucks in the U.S. (Vox, Aug 2, 2018). (See a previous blog post about it here.) The proposal, released Thursday morning by the EPA and the US Department of Transportation, called the Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule freezes the fuel economy standard for model years 2021-2026. The rule also revokes California’s waiver to set its own rules under the Clean Air Act, a waiver also followed by 13 other states and the District of Columbia, representing approximately 35% of the vehicle market.

The transportation sector has taken over from electric power generation as the largest greenhouse gas emitter in the United States. This short-sighted move not only undermines one of the most significant steps the U.S. has taken to address climate change, but also hurts the global competitiveness of the U.S. auto industry at a time when the world is demanding cleaner, more efficient vehicles. The Union of Concerned Scientists estimated that this rollback would add 570 million metric tons of greenhouse gas emissions by 2030, equivalent to 140 typical coal-fired power plants for a year. The Environmental Defense Fund (EDF) found that the proposal would result in nearly 200 billion gallons of cumulative additional gasoline consumption by 2040. According to Margo Oge, former head of the EPA’s Office of Transportation and Air Quality, the fuel savings alone through 2025 would add up to $1.7 trillion. Ceres estimated the proposal would result in the loss of $20 billion in sales by auto parts suppliers between 2021 and 2025.

The EPA argues that the proposed changes would save money and lives. The agency reported that the prior standards would cost $500 billion over the next 50 years. They claim that people will continue to drive older, less safe cars to avoid the cost of air pollution equipment installed in new cars. “More realistic standards can save lives while continuing to improve the environment,” said EPA Acting Administrator Andrew Wheeler in a statement.

But many question the EPA’s rational. “At first glance, this proposal completely misrepresents costs and savings. It also relies on bizarre assumptions about consumer behavior to make its case on safety,” said California Air Resources Board Chair Mary D. Nichols in a statement. The existing CAFE fuel standards would add an additional $2,340 to the overall ownership costs of a new vehicle or an additional $468 per year over five years. Given that air pollution from vehicles is responsible for 30,000 premature deaths annually, it stands to reason that the lives saved by improving efficiency and reducing air pollution outweigh the lives saved by potential car buyers on the margins upgrading to safer cars.

California plans to fight back. “The Trump Administration has launched a brazen attack, no matter how it is cloaked, on our nation’s Clean Car Standards,” wrote California Attorney General Xavier Becerra in a statement. “The California Department of Justice will use every legal tool at its disposal to defend today’s national standards and reaffirm the facts and science behind them.”

A 60-day comment period will begin once the proposal is published in the Federal Register. Ceres will be organizing investor comments during that time. Buckle your seat belts…

Fuel Economy Standards Under Threat

Fuel Economy Standards Under Threat

Chris Cox

The Environmental Protection Agency faces an April 1 deadline to decide whether Obama-era corporate average fuel economy standards for cars and light trucks from 2022 to 2025 are attainable or should be revised. The earlier conclusion issued by the Obama EPA that no changes to the 2025 standards are needed has already been abandoned by Administrator Scott Pruitt. He also dismissed the possibility of setting standards beyond 2025. “Being predictive about what’s going to be taking place out in 2030 is really hard,” Pruitt said. “I think it creates problems when you do that too aggressively. That’s not something we’re terribly focused on right now.”

In the meantime, Pruitt signaled a showdown with California who has a waiver from the federal law allowing it to set its own air pollution requirements. California set more stringent CAFE targets for both 2025 and 2030. “California is not the arbiter of these issues. California regulates greenhouse gas emissions at the state level, but that shouldn’t and can’t dictate to the rest of the country what these levels are going to be.”

The transportation sector has taken over from electrical power generation as the leading emitter of greenhouse gases (GHG) in the U.S. SGI joined many investors within the Ceres Investor Network earlier this year to send letters to the EPA and members of Congress, as well as to GM and Ford, in support of strong Corporate Average Fuel Economy (CAFE) standards. More recently, SGI signed on to letters addressed to GM and Ford urging them to call out the Alliance of Automobile Manufacturers to end its lobbying and public advocacy that questions climate science. The Alliance efforts to roll back the CAFE standards are in opposition to the auto industry’s support of actions to reduce GHG emissions. The letter also urges Ford and GM to publicly express opposition to changes to the CAFE standards that would lead to increases in GHG emissions.

SGI members continue to advocate that business and our government leaders take immediate action to avert climate change.