In October 2020, Covington public policy experts Sebastian Vos and Gary Guzy were invited to the 2020 CleanEquity Monaco sustainable technology conference to discuss the policy outlook in the EU and US, and likely impacts on efforts to decarbonize carbon-intensive sectors of the economy. The event was presented globally on EarthX TV. Covington’s London-based emerging companies, corporate partner Simon Amies introduced the panel discussion and Washington-based environmental and public policy associate Lindsay Brewer moderated. A link to the full discussion (including some content not presented at the conference) is available here and Monaco news media coverage of the presentation is available here.
Policy Context and Outlook
Messrs. Vos and Guzy discussed the significant role that the European Green Deal and the US presidential election are likely to have on efforts to limit greenhouse gas emissions (GHG) in the EU and US, including government investments in low-carbon technology and deployment.
- The European Commission’s proposal for a 55% reduction in EU GHG emissions by 2030 compared to 1990 levels is likely to affect the EU’s entire green regulatory program and disproportionately impact carbon-intensive sectors. Given the European Green Deal’s sweeping scope — covering topics such as renewable energies, energy systems, emissions trading, a price for carbon and carbon border adjustment, taxation, tariff levies, environmental financing, environmental disclosures for companies, and funding — companies stand to benefit from getting involved in shaping these important programs.
- In the United States, a second Trump administration would likely result in a continuation of several of the initiatives launched in the last four years, including consummating the withdrawal from the Paris Climate Accord and defending actions to roll back major carbon reduction initiatives undertaken during the Obama administration. A Biden-Harris administration would likely take ambitious steps to limit GHG emissions, including reestablishing the United States as a global leader on climate issues, ending regulatory rollbacks instituted by the Trump administration, investing in new technology, focusing on environmental justice, and possibly developing a “Climate Cabinet” to lead the administration’s work on climate.
Political Leverage Points
In the EU, businesses can impact pending policy changes through technical engagement with European institutions. Companies may find success in coming together within and across industries to develop positions on the European Green Deal. Covington has participated in efforts of this sort, including the World Economic Forum’s CEO Action Group on the European Green Deal.
In the United States, a new Biden administration would likely be open to public input on priorities for the First Day and first 100 days, along with the administration’s longer-term legislative proposals. There will be many opportunities for trade associations and other NGOs as well as bespoke groups of aligned corporate interests to influence policy formation.
Investor Opportunities and Risks
EU policymakers have expressed support for a range of technologies in development, including clean hydrogen, batteries, building renovation, off-shore wind, and energy system integration. Investors should be aware of the role that governments are taking to identify and promote winning technologies and business models.
A Biden-Harris administration will likely focus on continuing support for renewable energy as well as electric charging infrastructure, enhancing energy storage, enhanced transmission to facilitate grid modernization, and negative emissions technologies.
Environmental Issues of Interest Beyond Decarbonization
Plastics, circular economy principles, climate resilience, and environmental footprints of products and services, and water equity for frontline communities are areas of likely focus in the EU and US. Leaders in the EU, Member States, the White House and the US Congress will all play a role in shaping environmental policies on these issues as well.