The Biden administration will propose a rule this week requiring large federal contractors to develop carbon reduction targets and disclose their greenhouse gas emissions, leveraging the federal government’s purchasing power to combat climate change in the private sector and bolster vulnerable supply chains.
The proposed rule would require companies that do more than $7.5 million annually in business with the government to set carbon reduction goals that line up with the Paris Climate Accord, which seeks to limit global warming by reducing emissions.
Larger companies would also be required to disclose a range of greenhouse gas emissions, including emissions from vehicle fleets and energy usage.
The White House said the move would make the United States the first national government to require its major suppliers to set emissions reduction goals in line with the Paris agreement. The US federal government represents the largest buyer of goods and services in the world, purchasing over $630 billion last fiscal year, according to the White House.
The rule could cover roughly 85% of emissions associated with the federal supply chain, the White House said. That’s more than twice the emissions generated from operating the 300,000 buildings and 600,000 vehicles the federal government owns outright.
Requiring those companies the government does business with to set carbon reduction goals would make for a significant use of its weight.
“Ignoring climate impacts, and the big clean energy opportunity in front of us, is risky business. Today, the President is using the unparalleled buying power of the federal government to accelerate the pace with which we will get more actionable climate risk data and analysis into the market,” Biden’s National Climate Adviser Ali Zaidi said in a statement.
The rules would be different for companies of different sizes, and wouldn’t apply to contractors with less than $7.5 million in annual contracts.
Larger companies would be required to disclose escalating types of greenhouse gas emissions, depending on the size of the company’s contracts with the government.
At the COP27 summit, Biden is expected to highlight the proposed rule along with other steps his administration has taken to combat climate change. That includes the largest US investment toward the effort contained in the Inflation Reduction Act.
White House officials have underscored how different the situation is from last year’s climate meeting in Scotland, when Biden arrived with his climate agenda stalled.
Still, hope is not high among participants at this week’s summit that significant new steps toward limiting global warming will emerge. High energy costs and a looming global recession have made taking significant climate action politically difficult.
Still, administration officials said the proposed rule would amount to a major step forward.
“On week one, President Biden charged us to make the federal government climate-ready and resilient. Requiring major federal suppliers to disclose emissions and risks strengthens our supply chain and brings us closer to reaching our net-zero emissions goals,” said Council on Environmental Quality Chair Brenda Mallory.