With two key tips, Biden weaves climate into business and regulation

WASHINGTON — This week President Biden announced that Lael Brainard, the vice chairman of the Federal Reserve known for spearheading the financial risks of climate change, would become his chief economic adviser.

Her appointment follows that of Richard Revesz, an environmental advocate and academic known for defending climate regulations who last month became head of the White House’s top regulatory office – a place historically viewed as the place where environmental controls die.

The appointments to two of the most powerful posts in the White House underscore how Mr. Biden has taken a “whole-of-government” approach to climate change, appointing people with climate policy backgrounds to senior positions across federal agencies. It also illustrates his intention to take executive action to address global warming in the last two years of this term.

“This is a new thing we’ve seen from the Biden White House as they put climate at the center of their economic recovery and regulatory agenda,” said Jamal Raad, executive director of climate advocacy group Evergreen Action. “To put people in positions of power who are not traditionally climate positions, who deeply understand the climate crisis and the need to respond to it.”

The White House did not respond to requests to interview Ms. Brainard or Mr. Revesz.

The timing of her appointment is not accidental. While Congressional Democrats passed the country’s first major climate bill last year, the Republicans’ mid-term takeover of the House of Representatives means new environmental legislation is unlikely to be enacted during the remainder of Mr. Biden’s first term. That leaves Mr. Biden with executive power to push through the rest of his climate agenda.

This will entail oversight of about $370 billion in new spending on climate and clean energy programs envisaged by last year’s Inflation Reduction Act. It will also mean writing new climate regulations aimed at reducing emissions from cars, trucks, power plants and oil and gas wells.

In some ways, Ms. Brainard’s appointment as chair of the White House’s National Economic Council, where she is expected to play a key role in implementing the Inflation Reduction Act, is a continuation of how Mr. Biden sees climate change as central to the economic policy. Her predecessor on the council, Brian Deese, was previously a senior climate adviser to former President Barack Obama.

However, Mr. Revesz’s appointment to his new post is landmark. The Office of Internal and Regulatory Affairs, an obscure but powerful agency within the White House, is tasked with reviewing all proposed federal regulations, balancing the requirements of protecting health, safety and the environment against the costs to industry. In his new role, Mr. Revesz will be the effective gatekeeper for all new federal regulations – including all new climate regulations, many of which he has supported throughout his career.

This is exactly what opponents of Mr. Biden’s climate agenda fear.

“This is bad news for people who want to take action against the Biden administration,” said Jonathan Adler, a law professor at Case Western Reserve University.

Frank Macchiarola, senior vice president for policy and regulatory affairs at the American Petroleum Institute, which advocates for oil and gas companies, said he fears Mr. Revesz “will approach this through the lens of an attorney, like he did in his previous work.” has done, and not as an objective regulator.”

Mr. Revesz, who grew up in Argentina and is known as Ricky to everyone from his law students to his legal opponents, came to the White House from his role as environmental law professor and dean emeritus at New York University Law School. He is also a co-founder of an NYU-affiliated think tank, the Institute for Political Integrity, known for its innovative approach to analyzing the costs and benefits of environmental regulations. He played a key behind-the-scenes role in legal challenges to President Donald J. Trump’s dismantling of the clean air and clean water rules.

Historically, such regulatory cost-benefit analyzes have been based on the current economic costs of polluting industries. However, Mr Revesz has argued that regulations – particularly those related to climate change – should also take into account the cost of pollution to future generations. This approach can be used to justify strict climate regulation.

Mr. Revesz, 64, is possibly the first head of the White House regulator imbued with both the country’s leading scientific assessment of climate change and its strong legal authority to defend environmental regulations.

When the Trump administration, despite its eagerness to roll back environmental regulations, was forced to National Climate Balance 2018, In a comprehensive report by 13 federal agencies detailing the devastating effects of climate change on the country’s economy, Mr. Revesz recognized the document’s legal implications.

“This report is used extensively in court,” he said in an interview at the time. “I can imagine a lawyer for the Trump administration being asked by a federal judge, ‘How can the federal government recognize the seriousness of the problem and then override the rules that protect the American people from the problem?'”

This expertise later put Mr. Revesz on Mr. Biden’s shortlist to lead the Environmental Protection Agency and his transition team for the agency.

In some ways, Mr. Revesz’s background is at odds with the regulatory agency mission he now heads, established in 1970 by President Richard Nixon to serve as EPA oversight. In the past, the agency has obstructed economic regulation, for political or other reasons.

“This office has always been about: You have to do less because of the economic cost,” said Richard Lazarus, a Harvard environmental law professor who worked with Mr. Revesz on the Biden transition team. “Ricky might be the first to say, ‘You need to do more.'”

While Ms. Brainard’s new assignment is less explicit about launching climate policy, her background is expected to inform her leadership of the National Economic Council.

During her tenure at the Federal Reserve, Ms. Brainard, 61, caused a stir when she urged regulators to ensure the financial institutions they oversee consider the financial hazards posed by extreme weather, wildfires, drought, destruction and climate-driven migration change.

In 2019 Mrs. Brainard spoke about “Why Climate Change Matters for Monetary Policy and Financial Stability” at the Fed system’s first-ever climate conference. Hosted by the Federal Reserve Bank of San Francisco, the event was a turning point for an impartial central bank that had been reluctant to speak on the often politicized issue of climate. Ms. Brainard’s speech was considered a particularly big deal given her prominent position.

“This 2019 event where she was the keynote speaker was really the first time leadership had spoken about it,” Sarah Dougherty, a former employee of the Federal Reserve Bank of Atlanta and now with the Natural Resources Defense Counsel, told Advocacy . “It wasn’t hidden, it wasn’t subtle, it wasn’t about ‘the weather.'”

Since then, the Fed has started developing climate stress scenarios for the banks it oversees. In 2020, it added detailed climate risks to its twice-yearly Financial Stability Report.

“She was instrumental in building on that 2019 speech,” said Glenn Rudebusch, a former San Francisco Fed economist who helped organize the event.

People who have watched her in her current role said that Ms. Brainard, an economist by training, would bring to the White House a deep knowledge and appreciation of the real-world implications of climate policy.

“She was able to bring a lot of insight,” said Ms. Dougherty.