5 Action Steps for OMB to Lead a Clean Energy Economic Recovery

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The Office of Management and Budget (OMB) is one of — if not the most — impactful tool in the federal government’s arsenal to decarbonize our economy, jump-start job creating investment, and achieve affirmative environmental justice. OMB’s leadership must demonstrate commitment to climate and environmental justice throughout its budget and regulatory decisions. Climate leadership at the OMB, NEC, and CEA will be as central to this President’s climate legacy as the EPA and Department of Energy.

The scale of this challenge is enormous, but not without precedent. The New Deal and World War II mobilization saved America from economic ruin, transformed our country from an agricultural economy into an industrial superpower, and established strong social safety nets. That level of ambition is needed today to build a new clean energy economy that creates millions of good-paying union jobs, a pledge which President-Elect Biden campaigned and won on. This economic team now has a responsibility to prioritize climate ambition at the scale of the challenge, and as a matter of core economic, fiscal and industrial policy. And crucially, OMB must use its power over budgets and rule-making to deliver on the Biden Administration’s commitment to climate action.

As President-Elect Biden begins an all-out government mobilization to defeat the climate crisis, Evergreen Action is releasing roadmaps for key federal agencies to contribute to the effort. Last week, Evergreen released 5 action steps for the Treasury Department to deliver a clean energy economic recovery.

Today, Evergreen is releasing 5 concrete actions for the Office of Budget and Management (OMB) to lead on climate:

1. Mobilize Existing Spending Across the Federal Budget to Support Bold Climate Action
Beginning on Day One, OMB must use the full power of the federal budget to drive climate action. This includes engaging the federal government’s procurement power — approximately $500 billion annually — in a multi-agency “Buy Clean” initiative to drive climate pollution reductions in buildings, infrastructure, and supply chains. This effort will also require OMB to work with every agency to ensure a thorough examination and use of all relevant discretionary grants to preference clean energy and zero-emission technologies. It will require OMB to work across federal clean energy financing programs — from the Department of Energy’s (DOE) Loan Program Office and Department of Agriculture’s (USDA) Rural Utilities Service, to the Federal Housing Finance Agency (FHFA) — to creatively and aggressively deploy low-cost financing into climate solutions. And, it requires OMB to ensure that each agency provides technical assistance and streamlined interagency coordination wherever they touch state and local governments and tribal nations, as well as workers, communities, and domestic industries, to facilitate rapid and comprehensive decarbonization, enhancement of climate resilience, and domestic job creation.

2. Rescind Bad Climate Rules and Issue Ambitious New Climate and Clean Energy Standards

OMB, and its Office of Information & Regulatory Affairs (OIRA), play a significant role in reviewing and finalizing major federal agency regulations. From Day One, OMB should work with agencies to reverse the Trump Administration’s pro-polluter agenda and issue new, and dramatically more ambitious, standards that drive down greenhouse gas pollution, achieve environmental justice, and catalyze investment into building a clean energy economy. For example, OMB should work with the Environmental Protection Agency (EPA) to implement bold new carbon pollution standards that drive toward President-Elect Biden’s goal of 100% carbon-free energy in the power sector by 2035; withEPA and USDOT on new clean car rules that will reach 100% zero-emission new vehicle sales; with DOE on new standards for clean appliances and buildings; and with the Council on Environmental Quality (CEQ) to ensure that every federal infrastructure permitting decision applies a climate test that considers climate change and environmental justice.

3. Institute an Equity Screen to Ensure that 40% of Federal Investments are Directed Into Disadvantaged Communities

OMB should work with EPA and other federal agencies to revamp the current EJSCREEN program and create a comprehensive Equity Map that tracks the cumulative impact of environmental exposures and socio-economic inequities on communities across the country. OMB should then institute an Equity Screen that tracks how agencies are spending their climate dollars, and implementing regulatory policies, to ensure that the federal government meets President-Elect Biden’s goal of directing at least 40% of green federal investments toward labeled “disadvantaged communities,” or the impacted front line communities that have borne a historic legacy of disinvestment and environmental injustice, as identified by the Equity Map. Because “we manage what we measure,” it is vitally important that OMB establish clear metrics for tracking social equity, and for ensuring fair and well targeted new investments to rebuild communities targeting those most in need of new investment.

4. Elevate Climate Action as a Centerpiece for a New Federal Budget

OMB controls drafting of the roughly $3 trillion current federal budget, and through this process can exert extraordinary leadership to ensure that the whole of the federal government is aligned around President-Elect Biden’s mission of retooling the U.S. economy to solve the climate crisis. During the federal budget writing process, the OMB director should require each agency identify key programs and bold investment levels to advance a clean energy transition. OMB should further craft a cross-agency climate budget that allows for coordination across the federal government and overcomes bureaucratic silos to effectively meet the real needs of communities and domestic workers and industries. Through the lens of the federal budget process, all appropriate federal financing tools, technical assistance programs, and other resources should be marshaled toward attaining ambitious clean energy deployment — including in collaboration with states and local governments. The OMB director should use the Government Performance and Results Act (GPRA) as a powerful lever to effect an ongoing all-of-government commitment to climate solutions and environmental justice within federal management. GPRA establishes a clear performance planning and review process, which OMB can use to hold agency leaders accountable for strong and measurable clean energy and climate goals and objectives.

5. Account for True Climate Risks and Economic Benefits of Climate Action

The Office of Information and Regulatory Affairs (OIRA), housed within OMB, has historically held the final word on approving regulations from federal agencies. Under the Biden administration, OIRA should lay out new guidelines for determining how regulations, particularly major climate and environmental regulations, are evaluated, especially within Benefit-Cost Assessments, including through more rigorous and consistent assessment of the true costs associated with climate risk, as well as in recognizing the real economic and fiscal benefits of early climate action. This must include updating assessment of and recognition for the social cost of carbon, adjusting the discount rate for long term environmental protection, conducting new analyses regarding the true risks and costs of prolonged environment and social injustice on front line communities, and assessing the net economic benefits of reductions in carbon pollution. Setting a high bar for environmental justice and climate action depends on strong and effective use of regulatory tools. OMB is well positioned to ensure that the real benefits and costs of these measures inform decision making during rule making, to fully value the creation of long term public value through a stabilized global climate, healthy and productive communities, and the growth of new and globally competitive domestic industries.

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