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The Insider

A bipartisan think tank is pushing lawmakers to develop new policies that would encourage voluntary greenhouse gas cuts from farmers and forests, while the Departments of Energy and Labor weigh approaches to bolster or limit sustainable practices in a variety of sectors.

Inside EPA’s Environment Next features exclusive coverage of policy proposals that would help transform environmental protection by boosting new technologies and business methods that would reduce GHG and other pollutants.

Environment Next is a free service to our subscribers featuring wide-ranging looks at coming developments for environmental protection and policy, including interviews, in-depth reporting and profiles of key figures, companies and other groups that are reshaping regulation and private governance on air, water, waste and climate change. The features offer a new way of reporting about the shift from command-and-control regulation to innovative, market-based measures and other efforts, including voluntary programs and government action outside EPA’s purview.

This week, we looked at the Bipartisan Policy Center’s (BPC) latest sustainability initiative, focused on incentives for the agriculture and forest-management sectors to cut their greenhouse gas emissions:

BPC Unveils Broad GHG Incentive Plan For Agriculture, Forest Sectors
The Bipartisan Policy Center (BPC) is launching a new initiative to create incentives for forest managers and farmers to use their land for greenhouse gas cuts and carbon sequestration, tapping into a growing interest in the two sectors as key contributors to achieving worldwide net-zero GHG emissions by 2050.

BPC announced its Energy Project’s “Building a Bipartisan Agenda for Farm and Forest Carbon Solutions” initiative during a July 30 webinar, where the group touted support from sitting lawmakers including Rep. Greg Walden (R-OR), the ranking member on the House Energy and Commerce Committee.

Walden said the initiative will focus on market-based approaches rather than top-down federal policies, and cited a U.N. Intergovernmental Panel on Climate Change report that said properly managed forests are the best options for carbon mitigation. Farmers and ranchers have techniques for promoting carbon neutrality and a vested interest in sustainably managed land, he said.

And BPC paired the launch with its release of a new synthesis report, “Natural Carbon Solutions [NCS] in U.S. Farms and Forests: Building a Policy Agenda for Congressional Action,” which defines NCS as “actions aimed at increasing carbon storage and/or avoiding greenhouse gas emissions from forests, wetlands, grasslands, and agricultural lands."

Meanwhile, a variety of industry sectors are at odds over the future of environmental, social and governance (ESG) funds, and a Labor Department proposal that would set up new procedures for retirement fund managers to invest in them:

Finance, Renewables Firms Clash With Other Industries On ESG Rule
Clean energy firms and investment companies are opposing the Labor Department’s (DOL) proposal that would raise new procedural hurdles to investing retirement accounts in environmental, social and governance (ESG)-focused funds, arguing the plan would hamstring sustainable investments with no clear benefits to retirees.

In letters filed ahead of DOL’s July 30 comment deadline on its Employee Retirement Income Security Act (ERISA) rule, financial firms generally agreed with sustainability proponents that the rule is unnecessary or counterproductive, while Republicans and other industry groups, including fossil-fuel companies, backed the plan, with both sides setting out potential arguments for future litigation.

“Any regulation addressing ESG needs to foster fiduciaries’ prudent and loyal fiduciary decision-making, which includes encouraging evaluation of pecuniary ESG factors. The proposed rule falls short of that goal, and in the process actually poses a risk of harm to participants and beneficiaries,” reads a July 30 comment letter from the investment-management giant T. Rowe Price.

The June 23 proposal would set up new procedures for financial managers to justify their decisions to invest retirement accounts subject to ERISA in funds that prioritize ESG sustainability. The rule says those procedures would ensure that the investments rest on “a prudent assessment of [ESG’s] impact on risk and return,” rather than a “disproportionally weighted” approach that prioritizes sustainability over all other factors.

But opponents say DOL’s plan appears based on a misreading of how investment firms apply sustainability principles, and could end up hurting companies with high ESG scores in the marketplace -- effectively favoring entities that cause more pollution, just as sustainable firms have been outperforming their rivals amid the coronavirus pandemic.

The Department of Energy is facing litigation over its sustainability policies, from environmentalists and Democratic attorneys general who say it is unlawfully failing to update appliance efficiency standards:

States, Environmentalists Vow To Sue DOE Over Appliance Standards
Democratic attorneys general (AGs) and a coalition of six environmental and community groups are threatening to sue the Department of Energy (DOE) for failing to review and update as many as 26 energy efficiency standards for appliances such as clothes dryers and freezers, saying the updates could cut U.S. utility bills at least $22 billion by 2035.

Each group of litigants sent DOE Secretary Dan Brouillette a notice of intent (NOI) on Aug. 10 where they threatened to sue if the department within 60 days does not meet Energy Policy and Conservation Act (EPCA) mandatory deadlines to update the various appliance and equipment standards.

“To ensure DOE’s standards continue to achieve the maximum improvement in energy efficiency that is technologically feasible and economically justified, EPCA requires DOE to review and update the energy conservation standards for each product according to deadlines prescribed in the Act. DOE under the Trump Administration has repeatedly and systemically failed to comply with these basic and important duties,” reads the citizen groups’ NOI.

DOE has also unveiled a new report that identifies several barriers in state renewable-energy policies to adopting greater use of hydropower as a competitor to wind, solar and other low- or zero-carbon fuels:

Study Finds Barriers To Hydropower In State Renewable Plans
A new report prepared for the Department of Energy (DOE) says many states’ energy policies are blocking the inclusion of hydropower in renewable portfolio standards (RPS) and energy storage programs -- even as some states are waging legal battles to expand the use of hydropower in order to help fight climate change.

The Aug. 3 report, “The Role of Hydropower in State Clean Energy Policy,” was crafted for DOE’s Pacific Northwest National Laboratory (PNNL) by the Clean Energy States Alliance (CESA) -- a national organization of mostly state agencies that works with state leaders, federal agencies, industry representatives, and others to develop clean energy programs and inclusive renewable energy markets.

While all state RPSs currently allow some form of hydropower as an eligible resource, the report says, “most states have placed limits on size, in-service date, and/or technology” that limit their use of the power source. CESA sets out options for policy changes that could help those states integrate hydropower into their renewable-energy plans.

Those options include explicitly adding hydropower as an eligible power source for statutory mandates to achieve zero-carbon energy generation and using green-energy procurement programs to buy from hydropower sources specifically, CESA says.