Former EPA regulator attests to growing importance of private sector climate work in Duke talk

Former top environmental regulator Roger Martella spoke to the increasing importance of collaboration between business and policy for addressing environmental problems in a Monday evening conversation at Duke.

Martella served as the Environmental Protection Agency’s general counsel under President George W. Bush from 2005 to 2008, making him the leading lawyer at the federal agency with the “second-most complicated regulations in federal law,” he said. 

Now a top executive at GE Vernova, a U.S.-based energy equipment and services company, he attested to a shifting dynamic on the front lines of environmental policy in the country.

“The private sector is going to lead,” Martella said. “… The role of regulations … when it comes to environmentalism, climate change [and] energy is going to be less impactful in the future.”

Although Martella affirmed that the Trump administration has been a factor in this shift, he argued that the root causes trace back to at least the Biden years. From his perspective working in both regulatory and business spaces, Martella has seen the U.S. transition “from a system of sticks to a system of carrots” in its approach to environmental problem-solving.

He posited that for years, the federal government had employed “old tools” to tackle modern challenges. Martella referenced powerful legislation like the Clean Air Act and Clean Water Act that had proven successful in combating traditional environmental threats like pollution but whose playbook failed to meet the moment of newer threats. In his words, the U.S. struggled to gain traction because it was “not committed to making investments at scale.”

With the Inflation Reduction Act (IRA) of 2022, President Joe Biden and his team presented a new, incentives-based approach. Quipping that “the first climate change law in history is effectively tax policy,” Martella explained that the IRA worked because it was led by the private sector, incentivizing companies to innovate around climate solutions instead of trying to prod them into cleaning up their emission-intensive behavior through penalties.

“They start[ed] to pass laws that, for the first time in my career, start[ed] to move the needle on climate change, on sustainability, things like that,” Martella said.

He acknowledged that the Trump administration has rolled many of the law’s provisions back since taking office last year but countered that the gutted policies have mostly been consumer-facing. According to Martella, the elements of the IRA that are expected to be the most impactful for addressing climate change have been largely preserved.

And much like the  incentives-based theory underpinning the IRA, Martella said both the Trump and Biden administrations have always been open to pursuing public-private climate partnerships, an essential tool for climate innovation.

“The world needs speed. It needs urgency,” he said. “… Really no one can move at that pace except for the private sector.”

But advocating for those partnerships looks different when the Trump administration is at the other end of the table, Martella said. For Trump, partnerships must emphasize return on investment.

“No one in the Biden administration ever said to me, ‘What’s in it for the U.S. taxpayer? What’s in it for us?’ I never got that question — nor did I in the Bush administration, nor in the Clinton administration or the Obama administration,” Martella said. “When you go to the Trump administration, you can’t have a discussion without having the finances work out on how they’re going to earn a rate of return on the U.S. taxpayer.”

In his view, that deal-making style is not better or worse than previous administrations’ strategies, but it has prompted private actors to relearn how they approach government interactions.

“If they’re going to be a partner to you, you have to be a partner back to them,” Martella said.

To work with both of these administrations, Martella said that he has had to be “empathetic with your audience.” For the current administration, economic benefits tend to be a stronger selling point for federal officials, rather than making progress on decarbonization. 

But that does not mean Martella sees climate progress as unimportant, nor does he think climate-conscious companies should back off of green goals. Instead, they should just be mindful about how projects are marketed to stakeholders based on their unique priorities.

Monday’s talk came as the second installment in a new Nicholas Dean’s Leadership Lecture Series, a project moderator Lori Bennear, Stanback dean of Duke’s Nicholas School of the Environment, launched this year. This year’s theme is “Leading Against the Current,” and seeks to spotlight figures “at the intersection of policy, markets [and] institutions including government” to examine “how leadership actually functions when conditions are hard.”

And even though conditions are hard for Martella, he still believes progress in the climate space is possible.

“We don’t get paid to do easy things,” he said. “… You have to get away from the noise and just play the long game.”