The News: President Biden signed a new Executive Order on December 8, 2021 intended to usher in a new era of Federal sustainability. The Federal government will upgrade its vehicle fleet to electric vehicles, upgrade Federal buildings with carbon-free electricity and change how the government buys energy. In total, the plan will cut emissions by 65% by the end of the decade and help the government become carbon-neutral by 2050. Read the full executive order here.
New Executive Order Focuses on Federal Government Sustainability, Catalyzing Clean Energy Industries and Creating Jobs
Analyst Take: This sweeping Executive Order demonstrates a clear focus by the Biden administration on Federal government sustainability, catalyzing clean energy industries and creating jobs, and is what many believe to be a critical step in the fight against climate change. The Biden administration is working to leverage the buying power of the Federal government to help slash pollution from the government’s vehicles, buildings, and electricity usage. It is clear these initiatives have been launched with the intention of generating a ripple effect throughout the economy and helping to further drive other climate change initiatives and investments across the country and possibly even the world.
The Details of the Executive Order on Federal Government Sustainability
The Executive Order creates strategies to drive Federal government sustainability in a variety of areas, ranging from reducing greenhouse gas emissions to creating sustainable procurement programs. These are just a few of the details that caught my attention:
- Transitioning to a zero-emission fleet. Federal agencies will be required to fully electrify their vehicle fleets, buying zero-emission vehicles for light duty cars and trucks by 2027 and all vehicle types by 2035. This is no small undertaking, as the Federal government’s current vehicle fleet tally includes an estimated 645,000 vehicles.
- Net-Zero emission buildings. Federal agencies will be required to update their buildings and campuses with a goal of achieving net-zero emissions by 2045. They will also be required to cut greenhouse gas emissions by 50% by 2032.
- Clean procurement program. Through the “Buy Clean” initiative, agencies will be encouraged to promote sustainability through government purchasing prioritizing products created and transported with low greenhouse gas emissions.
The Ripple Effect We Might See
While the goals and initiatives outlined in the Executive Order only relate to Federal government sustainability, there could be a lasting impact on the economy — but of course that will be predicated on future leaders remaining committed to the establishment of the Federal government’s leadership on the sustainability front. That reality aside, in order to meet the demand of swapping out every vehicle in the Federal government fleet, automotive manufacturers will have to increase production. This could potentially lower the cost of vehicles, batteries, and other technologies related to EV production. It also will speed up the development of the infrastructure needed to make an EV fleet practical like building more charging stations.
Beyond infrastructure, I can also see this order spurring private investment to semiconductor development to overcome the supply chain issues caused by the chip shortage. We also might see more innovation in the development of other types of electric vehicles. Currently there are cars and trucks in the works, but we haven’t seen electric fire engines or other heavy-duty vehicles that are part of the fleet.
Positioning the Federal Government to be a Catalyst for Change
In the last few years, we’ve seen a number of companies take sustainability into their own hands, leading the charge on net-zero carbon emissions and clean energy. But the Federal government has been slow to make any major actionable goals. The U.N. Climate Summit in November ended with calls for governments, ours included, to make tougher pledges, yet to say it’s been tough to move the needle is an understatement.
But I’m choosing to remain filled with a little optimism after seeing this Executive Order. With clear goals and benchmarks, the Federal government’s commitment to investment into clean energy buildings, electric vehicles, and sustainable supply chains will help re-establish the U.S. as a leader in the fight against climate change. Hopefully, this will be a beacon for other jurisdictions and governments around the globe and will be a positive catalyst for change for our future.
Good Equals Progress provides industry research and analysis on the topics of Environmental, Social, and Governance (ESG) and Diversity, Equity, and Inclusion (DEI). These columns are for educational purposes only and should not be considered in any way investment advice.
The original version of this article was first published on Futurum Research.
Image Credit: TWI Global