Congressional selfies and self-congratulations inaugurated the week, but a lot of hard work remains to translate the Infrastructure Investment and Jobs Act’s (IIJA) policies into real-life results. Given that those policies are (generously) middling and that the most promising ones are underfunded, turning these into winning programs will demand energy, creativity, competence, and a strong commitment to the public interest.
Biden’s pick to oversee these efforts? Former Mayor of New Orleans Mitch Landrieu whose tenure leading the city’s government has been described as “one of talking,” not action. Particularly relevant for the law’s climate ambitions, he’s also historically been cozy with the oil and gas industry.
But even if the prospects for successful implementation were sunnier, the fact of the matter is that this administration needs to look beyond the IIJA (and Build Back Better, too, should it pass) to deliver for the American people, particularly when it comes to climate change. This administration already has the authority, thanks to laws that have long been on the books, to be doing much, much more to advance its agenda. That, ten months after taking office, it’s still not using so many of those powers, is rightly starting to inspire ire.
Recently, some of that anger has been trained on Treasury Secretary Janet Yellen. Throughout this year, we’ve noted many ways Yellen has fallen short deploying the full scope of the Treasury Department’s power to advance the public interest. Under her watch, the Department’s regulatory responsibilities have been discounted and its specific powers with regards to climate-related financial risk repeatedly brushed aside. Its performance along other metrics, like the essential task of distributing rental relief, has been dismal. The Financial Stability Oversight Council’s much-anticipated report on climate-related financial risk, developed under Yellen’s supervision, only typified these long-running concerns and generated significant blowback as a result. In an assessment released last week, Sierra Club, Public Citizen, and Americans for Financial Reform identified a whopping eighteen areas where the FSOC report fell short. Clearly, Yellen must do better.
That the Treasury Department is falling so far short of expectations makes it all the more critical that Biden’s other nominees to the agencies that make up FSOC be impeccable. That should rule out reappointing Jerome Powell, who has already acted as an obstacle to climate action on the council and at the Fed. Of course, if for some reason that’s not enough, Powell has no shortage of other disqualifications from his handling of the recent ethics scandals to his failure to once meet with a representative of labor over the last year (he found plenty of time to meet with Wall Street executives and affiliated individuals).
Unfortunately, the White House continues to demonstrate with its appointments that it is more than willing to forego significant opportunities for climate action. Most recently, Biden’s final nominee to the Federal Retirement Thrift Investment Board (FRTIB), Michael Gerber, has us worried about the prospects for divesting the nearly $800 billion in FRTIB-regulated federal employee retirement funds from dirty carbon.
As my colleagues Hannah Story Brown and Dorothy Slater detailed in a blog last week, that move could “change the global divestment conversation, and demonstrate America’s capacity to address the ‘challenge of our collective lifetime.’” Importantly, while FRTIB’s authority to account for climate risk in its investment decisions is contested, all evidence suggests that divestment would be entirely consistent with FRTIB’s well-established “duty to act in the best financial interests of the nearly six million people who participate in the TSP,” since funds that exclude fossil fuel assets consistently outperform those that contain them.
Nonetheless, it’s not at all clear that Gerber will be an ally to this divestment campaign. At present, Gerber is the official in charge of Environmental, Social, and Governance (ESG) matters at an investment firm with no dedicated ESG funds. He has prior relevant experience for the role on FRTIB after having spent six years on the board of the Pennsylvania State Employees’ Retirement fund, but that fund has lots of fossil fuel holdings. Paired with some of Biden’s other troubling FRTIB nominees, Gerber’s nomination could threaten what we once called a “slam dunk climate opportunity.”
Sadly, that was not the only troubling piece of personnel news to come out of an independent agency last week, although this time the White House was not to blame. Last Monday, Securities and Exchange Commission (SEC) Chair Gary Gensler announced a new slate of appointees to the Public Company Accounting Oversight Board (PCAOB) that included Kirkland & Ellis partner Erica Williams as chair. For the American Prospect last week, my colleague Max Moran told the story of how this new slate of officials came to be necessary and why Williams’ appointment is a disappointment. Since we’ve been considering the Biden administration’s climate record here, it’s worth noting that the PCAOB has a big role to play there too. If the current status quo, where hundreds of audits are effectively worthless and enforcement is non-existent, is allowed to continue, the SEC’s upcoming rules to measure and manage climate-related financial risk will be much, much weaker than they otherwise could be. Let’s hope Williams dramatically exceeds our expectations.
We, like others, were happy to learn last Friday that the Department of Justice (DOJ) had indicted Steve Bannon for contempt of Congress. However, almost a year after President Biden’s inauguration, the DOJ continues to defend the previous administration’s actions and undermine this president’s promises for reasons that are inscrutable to the public and which its leadership has not even attempted to explain. Consider, for example, that, thanks in large part to the Department’s passivity in litigation over Biden’s federal oil leasing ban, the administration is holding a Gulf oil lease sale today that will “lead to the production of an additional 1.1 billion barrels of oil” and has been described as a “carbon bomb.” DOJ took none of many possible actions to stop the sales, from requesting a stay of the ban during litigation to declaring the sale illegal under the National Environmental Policy Act or simply agreeing that the Center for Biological Diversity and others’ lawsuit to stop the sale is meritorious and postponing the auction pending further court rulings. Clearly, the American people and the planet need a better lawyer.
Still, we would be remiss not to note that the Justice Department is slowly moving in the right direction on some questions. Late last month, Deputy Attorney General Lisa Monaco announced a new crackdown on corporate criminality that matched an Obama-era initiative in some respects and went beyond it in others. Experts applauded the announcement but emphasized that words would need to quickly be followed up with action (something that did not occur under President Obama). To help get efforts moving, Public Citizen released a list of twenty corporate recidivists that would be worthy first targets in the DOJ’s new push. Let’s see if any do, in fact, face action in the coming weeks.
Want more? Check out some of the pieces that we have published or contributed research or thoughts to in the last week:
Gensler Punts in Fight Over Auditing Watchdog
Powell Held No Meetings With Labor, But Plenty With Wall Street, Through Biden Term
A Fossil Fuel-Aligned Investment Executive Is Biden’s Final Nominee to Manage Federal Retirement Funds
Analysis | Some progressives groups aren’t happy with Janet Yellen
Why Lael Brainard could be Biden’s Fed chair, replacing Jerome Powell
DC’s new top cop vs. Steve Bannon – POLITICO
Health tech questions await next FDA chief
Photo: “Power lines at sunset” by GarrettTT is licensed under CC BY-SA 2.0