TRANSITION

What Obama's climate czar can do for Biden

If Brian Deese's résumé ended when President Obama left office, it would be hard to imagine there would be much opposition among climate activists to his likely new role in the incoming Biden administration.

While serving under Obama, Deese represented the White House during the 2015 Paris climate summit and helped forge consensus for the regulation of greenhouse gas tailpipe emissions. He also worked on a stimulus bill that steered $90 billion to clean energy.

It's what came next that could complicate President-elect Joe Biden's plans to tap Deese, 42, as director of the White House National Economic Council.

After the Obama years, Deese took his talents to the financial giant BlackRock Inc., which controls more than $7 trillion in assets — including those in the fossil fuel sector.

The career change has raised suspicions with some climate activists, who say they are worried that Deese's work with BlackRock could compromise efforts to force Wall Street to do more about climate change.

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"For us, it's not about the individuals, it's not necessarily about Brian Deese's record or any other BlackRock executives' particular record on this. It's whether or not they're willing to use the full power of the next administration to regulate financial markets around what is necessary" to curb global warming, said Diana Best, a senior finance campaigner with BlackRock's Big Problem campaign.

The criticism comes amid recent promises by BlackRock to overhaul its investment strategy to account for climate-related risks. Observers say Deese, who served as BlackRock's head of sustainable investing, had a hand in that change in approach.

Even so, his likely ascension to director of the National Economic Council — which multiple news outlets reported this week — has set off another round of debate in progressive circles about Biden's commitment to aggressively tackle climate change.

"If Biden wants to show he's committed to bold climate action & wants to be responsive to the communities most impacted by the causes & impacts of the climate crisis, Deese is the absolute WRONG choice," Moira Birss, who directs climate finance at Amazon Watch, wrote on Twitter.

Others disagree.

"It's not like somebody who has been at an oil and gas company who has lied about climate. He's been in government, he's shown his stripes as a climate advocate, and now he's got a couple years ... of experience in how to move federal financial systems," said Mindy Lubber, the CEO of Ceres, an environmental nonprofit.

"He's proven to be a formidable force for change on climate, and that's what we're looking for," Lubber added.

White House years

Those who worked with Deese during his eight years as an Obama administration official say his expertise on climate change policy makes him a unique pick to head the National Economic Council.

"What I think is so promising about this appointment from the climate perspective is that you will have someone at the head of the National Economic Council that understands climate change, understands what the levers are that need to be pulled," said John Morton, a former White House climate adviser who is now a partner at the Pollination Group, a climate advisory and investment firm. "The more people that there are like that in government in any department, the more likely you are to have a successful and cohesive climate policy."

Former colleagues from the Obama administration praised Deese as a problem solver adept at working with a range of stakeholders. He started as a 30-year-old transition team member tasked with managing the 2009 auto industry bailout effort and rose to replace former White House chief of staff John Podesta as the White House's top climate official.

"Whether it's on autos, whether it's on the Paris Agreement or whether it's in his job at BlackRock, I think he understands that we're going to have to engage everybody in our society," said Joe Aldy, a former White House official on climate and energy under Obama who worked with Deese on the auto bailout. "We're all going to have to be moving in the same direction if we're going to be up to the challenge of combating climate change."

Deese hadn't yet finished law school when he was tapped to lead Obama's task force aimed at shoring up an insolvent automotive industry — an issue he hadn't worked on previously. But Aldy, who also worked on the bailout in his position at the White House, said Deese learned quickly and showed an ability to "get things done."

Aldy credits the bailout effort with helping to pave the way for the Obama administration's first-of-their-kind greenhouse gas rules for vehicle emissions.

Finalized at the end of the first term, the rules were made possible by an agreement among the federal government, California, industry, environmentalists and labor over fuel economy that Aldy said was partly a product of the rescue plan and which served environmental goals while also addressing the needs of auto manufacturers.

As an Obama-Biden transition team member and later as a White House staffer, Deese worked on Obama's massive economic stimulus bill that directed $90 billion to the clean energy industry.

And in 2015, 10 months before a landmark summit in Paris that aimed to deliver a global deal on climate change, Deese took over for Podesta as the top climate official at the White House. Obama had made delivering the Paris deal a centerpiece of his second-term foreign policy, so Deese devoted much of the year to making that happen.

"I was talking to Brian all the time," said Todd Stern, special envoy for climate change in Obama's State Department. He remembers attending meetings on Paris convened by Deese about twice a week throughout 2015. The White House climate lead attended Paris, and although the State Department led negotiations for the U.S., Deese played an active role.

"He was very involved in all aspects of thinking through strategy and thinking through what the state of play is, and talking through next moves and certainly being the main link back to the White House," said Stern.

Morton, who took over the climate adviser role early the following year, said Deese also managed the Obama administration's effort to ensure Paris would enter into force in 2016 — years earlier than is typical for a complex environmental accord. For that to happen, at least 55 countries totaling 55% of the world's emissions needed to join Paris.

"It was a massive diplomatic push that was led by the White House and the State Department and others, but Brian was kind of the ringmaster in many ways behind that," said Morton.

The fact that the deal took effect on Nov. 4, 2016, with the U.S. as a party meant that President Trump could not withdraw the U.S. for four additional years.

BlackRock

When Obama left the White House, Deese did too. He went on to become the head of sustainable investing at BlackRock.

According to Dan Firger, the managing director of Great Circle Capital Advisors, during Deese's time on Wall Street, he has served as a "close adviser" to BlackRock CEO Larry Fink and has had "access to the senior-most decisionmakers across the firm."

In a previous role with Bloomberg Philanthropies, Firger worked closely with BlackRock on projects such as the Task Force on Climate-Related Financial Disclosures, which Deese oversaw.

Some climate activists have taken issue with Deese as Biden's likely pick, in large part due to his current job at the Wall Street behemoth, which in recent years has come under fire for its fossil fuel investments. Green groups and progressives also have accused the wealth giant of failing to use its unmatched shareholder power to force planet-warming companies in a greener direction.

On the heels of multiple advocacy campaigns and countless protests, BlackRock earlier this year changed its tune on the issue, when Fink in January released two widely circulated letters that said global warming would force a "fundamental reshaping of finance."

The CEO said his firm would act on climate by overhauling its investment strategy to account for climate-related risks. That included a commitment to divest from some thermal coal producers, offering clients additional sustainable investment options and voting against companies' top brass when they have not made sufficient progress on climate issues.

BlackRock did not respond to questions about Deese's climate goals and accomplishments during his time with the firm, or the extent to which he has driven its recent commitments to addressing the long-term financial threats posed by climate change.

But sources say that as the head of sustainable investing, Deese likely played a pivotal role in BlackRock's shifting stance.

Lubber underscored in an interview that the $7 trillion investment firm's public focus on the issue has skyrocketed during Deese's tenure. And "to have the CEO and chairman of BlackRock talking about climate as a material financial risk that needs to be included in portfolio analysis," she added, is a major sign of progress.

Firger agreed, noting that Deese helped drive BlackRock's internal agenda and participation in international climate efforts including the Task Force on Climate-Related Financial Disclosures and the Climate Finance Partnership.

The Wall Street giant appears to be "waking up to the fact that climate change threatens the health of the overall global economy and that there are things BlackRock can do and should do to accelerate the pace of change in terms of decarbonization," Firger said.

"My view," Firger added, "is that Brian was very central to the strategic pivot of BlackRock to sort of focus on climate and climate risk and climate solutions investing. He deserves not all the credit but a lot of the credit for helping move that firm along."

Some progressive groups, on the other hand, have said Biden should avoid hiring Wall Street executives and former Obama officials who they think did not do enough on climate last time.

The Sunrise Movement's New York City chapter, for instance, last week planned a protest outside the New York BlackRock headquarters amid news that Deese might be tapped. According to the group's Twitter account, its main aim was to "send a clear message to Biden: no hires with terrible climate records!"

Many in climate finance circles nonetheless remain adamant that Deese's work with BlackRock does not make him a bad candidate for the spot he will likely fill. In fact, Deese's supporters say his time on Wall Street makes him more qualified.

"Both the U.S. government as a bureaucracy and BlackRock as a firm are more supertankers than they are Ferraris, and it takes a very particular kind of skill set to steer those institutions and make change," Firger said. "It seems like Brian has done a fair bit of both now, and that bodes well for where he's going to be sitting at the NEC if the rumors are correct."

Deese as NEC director

As Biden's national economic adviser, Deese would have a hand in driving a variety of administration priorities, from coronavirus recovery and stimulus legislation to infrastructure spending to climate and energy legislation.

With Neera Tanden, Biden's pick to lead the White House Office of Management and Budget, and Janet Yellen, his nominee for Treasury secretary, Deese will help carry out the new administration's economic agenda.

Aldy noted that Yellen, too, has been vocal on the economic threat posed by climate change.

"You have the two leading voices on the economic team in terms of coordinating policy who actually know this issue better; I would propose ... they understand the policy and the politics better than any of their predecessors," he said.

Aldy said the Biden administration's hopes of enacting an economic recovery bill with substantial clean energy investments, like the Obama package in 2009, would depend on whether Republicans retain control of the Senate after January's runoff elections in Georgia. If recovery packages remain small, he said, the new administration and Democrats would have to prioritize emergency funding and assistance to states. But he added that there was much the executive branch could do through procurement and other avenues to reduce global emissions.

Stern said he expected Deese and the NEC to play a role in helping to shape the next U.S. commitment to Paris, which Biden has promised to rejoin "on day one" of his presidency. That package would include legislative and regulatory steps the U.S. can take to reduce emissions between now and 2030.

The Biden transition team has signaled it still plans to appoint a high-ranking White House adviser to oversee domestic climate policy and to serve as a counterpart to former Secretary of State John Kerry, who has been tapped to lead climate diplomacy for the White House. Deese won't fill that role, but Morton said it was particularly encouraging to see the incoming administration choosing people with climate expertise to fill other functions.

"The White House has had climate czars before, but unless and until climate considerations are kind of mainstreamed throughout the building, throughout the West Wing, and throughout the agencies and departments, the policy will never be quite as effective as it could be," he said.

Twitter: @chemnipotEmail: jchemnick@eenews.net

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