Clean sweep paves way for “lasting legacy” on US sustainability and diversity for Biden, including escalation on renewables.
With the US Senate now controlled by the Democrats, following yesterday’s victories for Raphael Warnock and Jon Ossoff in the re-run Georgia senatorial elections, President-elect Joe Biden is in a much stronger position to fund US climate action when he assumes the Presidency, say experts. The Democrats haven’t simultaneously controlled the Senate, House of Representatives and the White House since 2009.
“Biden campaigned to take the US back into the Paris Climate Agreement, but this action would have largely been symbolic without policy, something the Republican party have not shown signs of ceding ground on,” said Randeep Somel, Manager of the M&G Asset Management Climate Solutions Fund.
“The Democrats have been in agreement on climate policy so this should be one of the key opportunities for the Biden Presidency, and a meaningful way for him to leave a lasting legacy,” he continued.
Law firm Dechert’s Financial Services Group has noted that the Biden administration should look to “seek to influence future actions on ESG and diversity matters through the appointment of key positions”. So far, Biden has appointed the likes of John Kerry as his Climate Envoy and Brian Deese (former BlackRock executive responsible for sustainable investing strategies) to lead the National Economic Council, suggesting climate will prove to be a priority throughout the next presidential term.
Biden has pledged to include US$2 trillion of federal government spending to the climate budget, something “that will be more likely now Democratic spending plans won’t be blocked by Senate Republicans,” Somel said.
He added this should “significantly escalate the use of renewable energy for electricity generation”, as well as encouraging the adoption of electric vehicles.
Prior to the democratic win of the Senate, Biden’s pick for treasury secretary, Janet Yellen, advocated for the introduction of a carbon tax in order to both accelerate the US transition to net-zero emissions and raise further climate funds. The Principles for Responsible Investment’s (PRI) Head of US Policy, Heather Slavkin Corzo, has also recommended a carbon price is introduced.
“These election results represent a huge opportunity for climate–focused sustainability companies as the full force of the US government gets behind net–zero,” Somel said.
The narrow Democratic win, which means both major US parties have 50 seats in the Senate, with Vice President-elect Kamala Harris able to cast a deciding vote, was followed by pro-Trump riots on Wednesday, as violent crowds stormed the Capitol.