The climate left's plans for the next two years are bad

Biden needs to stay the course on energy abundance and technology-neutral emissions reduction

A recent Slate article by Whitney Bauck on the Sunrise Movement in the post-IRA era contains, amidst heaps of praise, this sentence: “[the IRA] wasn’t based on Sunrise proposals, but took the organization’s vision for federal climate action as an engine for job creation and ran with it.”

The fact that the most important climate bill in history wasn’t based on Sunrise’s proposals is a really important point and indicative of serious underlying flaws in the climate left’s approach. But in Bauck’s telling (and, crucially, in Sunrise’s), the passage of legislation not modeled on Sunrise proposals is nonetheless a vindication of the group:

“Our goal with the Pelosi action was to raise the bar on the debate around climate right at the beginning of the congressional cycle,” said Varshini Prakash, 29, co-founder and executive director of Sunrise. “We didn’t know it would be quite so successful.”

On one hand, the IRA passed, and it’s good that it passed, and it’s good that it passed with Sunrise’s support. And they say defeat is an orphan but victory has a thousand fathers, so naturally everyone wants to take credit for the win. It’s probably even true that Sunrise contributed to the Democrats’ decision to prioritize climate change in 2021-2022 — the IRA spent a lot on zero-carbon energy and only a little on healthcare, and I do think Sunrise and related groups played a role there. I also think working-class voters have noticed that the Democratic Party has become, at an elite level, a party that cares more about climate change than about health care. This has probably hurt Democrats’ image, and they’d do well to pivot over the next two years back to caring more about health care.

And this leads me to my other hand: while it’s good to see the climate left embracing the IRA, it’s critical that the Biden administration and Democratic Party leaders continue to embrace the approach at the heart of the IRA: an abundance-oriented, technology-neutral program based on cost-effective emissions reduction strategies that are designed to minimize backlash.

This approach is a good one, and it really is different from the approach supported by the climate left. It’s one that Democrats as a whole embraced in part because of the climate activists’ issue-prioritization work but largely because Joe Manchin made them. And according to Rachel Frazin’s reporting for the Hill (“Climate activists set to pressure Biden with Congress divided”), it sounds like activists are preparing to pressure Biden to abandon this IRA approach.

That’s a bad idea that will court electoral disaster and likely result in higher emissions.

The right way forward under divided government is not to “pressure” Biden to enact politically untenable ideas — it’s to try to find some GOP-friendly ideas that could reduce emissions while trying to work to make Biden and IRA a political success so Democrats can keep governing and implementing the IRA.

The agenda that failed

In an offhand comment over Thanksgiving weekend, I mentioned that I think climate has replaced “wokeness” as the topic on which Democrats most seriously risk going off the rails.

That generated pushback from people who noted that the Inflation Reduction Act pursues an extremely sensible approach to climate and that Biden is generally pursuing smart efforts to stabilize global oil and gas prices and grow American supply. And he absolutely is — the policies Biden has come around to are very sensible. But it is also true that on his first day in office, he issued an order halting oil and gas leases and permits, which became a dogfight in the courts that Biden eventually gave up on. In the spring of 2020, Sarah Bloom Raskin wrote an op-ed supported by major climate groups calling on the Fed to deny normal emergency support to the fossil fuel sector in hopes of bankrupting the industry. The Fed obviously did not do that, but that didn’t stop Biden from nominating her for a Federal Reserve Board of Governors job — a job she did not get because of Manchin’s objections.

This has all led to our current hard-to-characterize situation in which I both defend Biden from Republicans’ claims that he is responsible for high gas prices, and also criticize Biden for having tried to do things that, had he succeeded, would in fact have contributed to higher energy prices.

And I think this is the debate we’re really having as everyone does their post-IRA credit taking. Should we be saying that Biden abandoned the climate left agenda, made tremendous progress on climate anyway, and should keep stiff-arming the groups while pursuing his successful approach? Or that Biden achieved a lot on climate, but the focus on passing a bill with Manchin meant he couldn’t use executive action to minimize domestic fossil fuel production, and now with the House in GOP hands it’s time to take the gloves off?

These are very different ideas, and I think the latter is dangerous and destructive.

I also think that while Republicans are obviously not going to do a “bipartisan climate bill,” it would be a huge mistake to rule out the potential for bipartisan cooperation leading to climate progress.

Bipartisan energy opportunities are real

On the energy front, I’m haunted by the specter of what’s happened over the past decade with homelessness in Los Angeles. In 2016, LA voters overwhelmingly passed Measure HHH, raising taxes on themselves to pay for the construction of new supportive housing to fight homelessness in the city. But the measure didn’t do anything to reduce the permitting barriers to siting affordable housing developments, so actual production fell far short of proponents’ goals. Meanwhile, overall zoning in LA massively underbuilds market-rate housing, so more and more people were becoming unhoused even before the pandemic and the Zoom Shock sent housing demand soaring.

The IRA is essentially Measure HHH for zero-carbon energy.

Much more money is now available for wind and solar energy, as well as more money for nuclear and geothermal energy, direct air capture, and CCS. There’s money for everything — but what will actually get built? There are still big questions on the regulatory side.

Right now, geothermal projects on federally owned land face higher regulatory barriers than oil and gas projects, which environmental groups argue shows that fossil fuel projects should face even higher barriers. I think that’s a political and economic dead end, but it’s hardly out of the question that Republicans would agree to a bill that lowers the regulatory burdens on geothermal power. By the same token, the Nuclear Energy Modernization Act directing the Nuclear Regulatory Commission to create a feasible regulatory pathway for advanced nuclear reactors passed with overwhelming bipartisan support. The problem is the NRC hasn’t really implemented it. This is in part because the staff doesn’t really believe that Congress wants them to move decisively on this, and in part because it’s not clear the politically appointed commissioners see it as their job to make decisive changes. But if NEMA passed, it’s obviously possible that new, tougher federal legislation could pass or even that a bipartisan coalition could hold some hearings and bring some heat to bear on the NRC.

There are also purely executive things Biden could do that would reduce CO2 emissions but that environmental groups probably wouldn’t like — like pressing the EPA to either issue permits for Title VI carbon storage wells or else hand jurisdiction over this topic to the states in a wider range of cases.

All of this is to say that actual interest in emissions-reducing policy is only semi-aligned with what the green groups support and Republicans oppose. IRA is spending-oriented (so Republicans don’t like it) but technology-neutral in a way that the climate groups aren’t. As we move into the implementation/regulation phase, Biden has the option of sticking with technological neutrality and achieving maximal decarbonization in a bipartisan way. If that’s what people mean by pressuring Biden on climate, then I’m all for it. What I suspect, though, is that they mean the opposite — pressuring him to do minimal action on everything that isn’t wind/solar while returning to the goal of kneecapping the fossil fuel industry.

Biden should try to win re-election

Where climate activists unquestionably made a difference was on getting Democrats to prioritize the climate issue. At the same time, I think it’s very clear that when gasoline prices were soaring last spring, the public wasn’t saying “this is great news, the rising prices are putting us closer to our climate goals.” And as I’ve said many times, it’s incredibly telling that the proximate European response to Russia shutting off natural gas shipments is that emissions went up as Europe burned more coal and wood.

This is just to say that it’s not a coincidence that part of IRA’s viability is that it was rhetorically reframed around bringing down energy costs. Meanwhile, the Biden administration took big steps with the Strategic Petroleum Reserve to bring down energy costs. The large reduction in gasoline prices this fall was very helpful to Democrats in the midterms.

And I think that rather than pressuring Biden to do things that raise the price of energy and make it more likely that Ron DeSantis becomes president, climate hawks should show some appreciation for the fact that Biden prioritized climate change over health care or preschool or child poverty and try to help him win the damn election. If inflation stays way too high, it’s going to be hard for Biden to win. If inflation is brought down by a recession, that’s also going to make it hard for Biden to win. But if energy supplies keep getting more abundant then we could translate full employment into strong wage growth, and Biden has a good story to tell.

But in that light, it’s really important for everyone to take the economics seriously. Back in 2013, Paul Krugman wrote a great column in support of some proposed Obama administration climate regulations noting the important interplay between these rules and the macroeconomic situation (emphasis mine):

Yes, new rules on carbon emissions would increase the costs of electricity generation. Power companies would probably close some old coal-fired plants, turning to more expensive lower-emission alternatives — to some extent renewables like wind, but mainly natural gas. Furthermore, they would be forced to invest in new capacity to replace the old sources.

All of this would, indeed, lead to somewhat higher electricity bills — although not nearly as high as the usual suspects claim. It’s kind of funny, actually: right-wingers love to praise the power of free markets and declare that the private sector can deal with any problem, but then turn around and insist that the private sector will just throw up its hands in despair and collapse in the face of new environmental rules. The actual lesson of history — for example, from efforts to protect the ozone layer and reduce acid rain — is that business can generally reduce emissions much more cheaply than you think, as long as regulation is flexible to allow innovative solutions.

Still, there will be some cost. Won’t this destroy jobs? Actually, no.

It’s always important to remember that what ails the U.S. economy right now isn’t lack of productive capacity, but lack of demand. The housing bust, the overhang of household debt and ill-timed cuts in public spending have created a situation in which nobody wants to spend; and because your spending is my income and my spending is your income, this leads to a depressed economy over all.

It was a great column, and I think Krugman was absolutely right. In the depressed economic circumstances of 10 years ago, forcing the early retirement of existing fossil fuel infrastructure raised consumer prices a little bit but didn’t harm the overall macroeconomic situation. If anything, it helped by forcing a faster pace of investment.

Obama, announcing the plan, said he wanted to “remind folks there’s no contradiction between a sound environment and strong economic growth.”

Krugman in his column said, rightly, that “normally, one would be tempted to dismiss this as the sound of someone waving away the need for hard choices” but that in the particular economic circumstances of the time, there really was a macroeconomic free lunch available.

Unfortunately, I think that what a lot of progressives took away from Krugman’s writing during the Great Recession wasn’t the actual doctrine of Keynesian economics but the idea that hand-waving is okay. Right now, though, the economy in fact is constrained by a lack of productivity capacity (as Janet Yellen has explained), so the win-wins are in measures that increase capacity while reducing emissions (building more interregional electricity transmission lines, for example) while capacity-reducing measures genuinely do have economic costs. Now just because something is costly doesn’t mean you shouldn’t do it — the public health benefits of reducing air pollution are large and worth bearing some cost for — but there are limits to how much cost it makes sense to ask people to bear. And in political terms, that’s the kind of thing you want to roll out in the fifth year of your administration, not the third or fourth.

Of course, environmental groups are going to advocate for prioritizing environmental concerns. But it doesn’t really make sense for Biden to give in at this point. And the wise course for advocates is to be relatively forgiving, acknowledging that Biden has already done an enormous amount on climate and needs to cover some other bases.