The Inflation Reduction Act (IRA), which dedicated $370 billion to investments in clean energy projects, was the biggest climate legislation in American history when it was signed into law just two years ago. And yet climate policy has been curiously absent from this year’s presidential campaign. Vice President Kamala Harris seems to go out of her way to avoid mentioning the law. And former President Donald Trump talks about cutting much of the spending—but only vaguely.
Has the IRA forged a new political coalition in favor of climate policy in the United States? Will Trump face resistance from Republicans in repealing the law? And why do climate activists support the law despite its compromises?
Those are a few of the questions that came up in my recent conversation with Foreign Policy economics columnist Adam Tooze on the podcast we co-host, Ones and Tooze. What follows is an excerpt, edited for length and clarity. For the full conversation, look for Ones and Tooze wherever you get your podcasts. And check out Adam’s Substack newsletter.
This conversation draws on themes in Cameron Abadi’s new book, Climate Radicals, on sale Sept. 10.
Cameron Abadi: Is the absence of climate policy from the campaign itself kind of a political achievement? Has the Inflation Reduction Act forged a new coalition in the United States in support of climate legislation, at least tacitly, across lines that were previously polarized?
Adam Tooze: It’s really curious, isn’t it? And I think the answer, as far as I see it, is in the name and in that word “tacit” that you evoked. Because though this is the biggest piece of climate legislation in U.S. history, and though Biden in his exit letter brags about this as being the biggest in world history, which one could argue about, in any case, it’s clearly a major climate measure. But what do they call it? They didn’t call it a piece of climate legislation. And this is significant because when U.S. legislators want to advertise what they’re doing, they’re not shy about big names, right?
But instead of, as it were, announcing this boldly as a great spending package, they announced it as an inflation reduction act. They dressed it up as supply-side policy to reduce energy costs and to raise taxes to balance that. And I think, in this way, the climate does feature in this election because it’s about the cost of living. And, in Trump’s words, how the disastrous Biden energy policy has driven up costs. And that essentially is dog whistle for anti-green mobilization in the United States. You know, crazy harebrained leftist socialist energy policies making life unaffordable. And the Democrats’ answer is, in fact, that they’ve done no such thing and have done everything possible, in fact, to keep petrol prices down. Which is true, and under [President Joe] Biden and Harris, the U.S. has become the largest oil producer the world has ever seen. And I think all of this adds up to the fact that there’s absolutely no consensus in the U.S. on climate policy, in the sense of policy, in the strong sense of the word. In other words, a balancing of different priorities and different instruments, which involves real trade-offs. In fact, what there is from both camps is an unwavering commitment to keep the cost of energy down for Americans as far as possible. And there is a new and fragile coalition around subsidizing green, so long as that generates jobs and doesn’t include buying Chinese things. And there is also a totally loose budget constraint, which means that, unlike in Germany, for instance, when you provide subsidies for green energy, you have to raise electricity tariffs to somebody else to pay for them.
CA: Will Trump end up facing resistance from Republicans on his attempt to repeal the law? A lot of the spending involved in the law has actually been in red states. And this month, 18 House Republicans signed onto a letter asking Speaker of the House [Mike] Johnson to spare all that spending from repeal in a future administration. So how does the politics of this work out in the Republican Party right now?
AT: I think it’s extremely unpredictable, because on the one hand, there is that simple, rational material logic that you would think would apply. And it’s interesting to hear about that initiative from the House. But on the other hand, you have the example of Texas, which is in many respects the quintessential example of a conservative red state that for decades, ever since the governorship of George [W.] Bush, has been a supporter of renewable energy on quite a large scale. It had a huge wind boom in the 2000s, and it’s now installed a vast amount of solar. There was a moment earlier this year where, believe it or not, 70 percent of Texas electricity was generated by renewables. This is Texas. Oil-state Texas, right? So the green electricity revolution is happening in a state like Texas. And yet, nevertheless, even at the moment where this breakthrough is happening, the Republicans in the state house in Texas are actually trying to stunt renewable development and curb it and provide subsidies to gas generators. And so, you know, one shouldn’t overestimate the force of the materialist logic within the Republican coalition. It’s there. It’s present. The theory of change behind the Inflation Reduction Act was definitely to play on that and to mobilize it.
And what is striking, and you referred to it further up, is that both the American Petroleum Institute and the Chamber of Commerce, both are notorious conservative lobby groups on behalf of American business and both of them have come out in support of retaining the IRA. They’re not constrained by the same inner logics of the Republican Party as, say, the Texas GOP may be. And what’s really interesting is that they’re defending the IRA, not necessarily for its green ambition, but because of everything the IRA was loaded with when it passed. It was always a portmanteau piece of legislation, as all big pieces of legislation in Congress are, and it included very attractive subsidies for hydrogen as a substitute for gas and coal and oil as a possible new energy source—which, if it is made through renewable electricity and hydrolysis, can of course actually be a green option, but that’s the more expensive route—and carbon capture.
CA: The IRA included all sorts of compromises that we’ve discussed here, and even by its own accounting, fails to achieve the climate goals the administration sets out. And yet leftist climate activists in the United States generally supported the IRA. They came out and advocated for it. The biggest climate groups did. Some dissented. But for the most part, there’s been support for it. And that sort of contrasts, in my observation, with climate activists elsewhere in the world who tend to be more strident in their demands and more liable to punish policymakers when they fail to meet the goals that they set. So what do you think accounts for America’s climate activist scene and their posture toward climate policy here?
AT: I think there are three things. The first is the most, you know, just obvious, which is realpolitik. Like, I don’t think you were in the U.S., Cam, for the shock of 2020, but it was chaos here. And it was such an incredible relief to have a competent Democrat-led administration and a majority in Congress. There was a bona fide and very real euphoria, and for obvious reasons, because the alternatives were horrifying and the stakes were incredibly high. And the Biden people were actually committed to making a third attempt after [former President Bill] Clinton’s failure, after [former President Barack] Obama’s failure to pass legislation. And they did. And that’s the fundamental reason. And it’s a hugely important reason. And it’s one I preached again and again to European audiences: Do the big legislative act. Even if the majority is wafer-thin, get that majority, because it gives you, in democratic systems, this huge bonus of legitimacy, which cannot be exaggerated in its significance. And so that’s the fundamental reason. And I get it. Like, it’s very powerful.
The second reason is more surreptitious, in fact, and interesting, which is that part of the reason the Biden people got buy-in is that they were very, very clever, and not just clever, genuinely inclusive in the way in which they incorporated climate activists into the drafting of the legislation. The legislative process in the U.S. is incredibly porous anyway, right? The IRA wasn’t made really by the White House. It was made by teams of people attached to key congressional figures, with advice from the White House and a bunch of think tanks—no one really wanted to ask too carefully about which piece of info and which model was coming from where—that crafted this legislation. And there was a transfusion of talent, of expertise, especially from the [Sen. Elizabeth] Warren camp into the Biden administration and an openness on the part of key figures in the Biden administration and around [Senate Majority Leader] Chuck Schumer, for instance, to the input from the climate community, which meant that this was a collective project, including all of the compromises.
And what’s really interesting about this—I wrote about it at the time but was kind of almost warned off from speaking about it too openly because it was so sensitive—is that in the negotiations in Congress with people like Schumer and [Sen. Kyrsten] Sinema, there was a double game going on, which was, OK, what does [Sen. Joe] Manchin in particular need? So what is it we have to give the right wing of the Democratic Party? And on the other hand, what does the climate model tell us that we need to actually achieve the ambitious goals, further reductions by 2030, let alone net-zero by 2050? And negotiation like this is driven by what professional negotiators call constructive ambiguity. It’s like any other deal. You need one side of the bargain to believe they’re getting what they want and our side of the bargain to know that we’re going to get what we want, too. And that relies to a considerable extent on opacity. And so what was going on in the background behind the Inflation Reduction Act is that every concession that was being made to Manchin was being costed out in real terms on the best available climate models, with at least three separate groups of climate models in on this in real time calculating through, “If we give this, if we hold on to this tax break, we think our model [works].” And on the basis of that, in the end, the concessions that were made still left the climate expert community thinking this was a huge step forward and a big step in the right direction and potentially open-ended to even more benefits. Because this is, as Tim Sahay put it, who was one of the key figures in all of this, it was bottomless mimosas. Basically, we were opening a bar for happy hour and saying, “Come drink as much subsidy as you can whilst the happy hour continues.”
The third element, and I hope my American friends will forgive me for saying this, but that is a deep-down patriotism and exceptionalism also on the left in the United States. There is a deeply baked-in belief that if only America can get its act together, the expertise it has mobilized is formidable and second to none in the entire world. So point one and point two ticked with the IRA, and then you get to go back to the exceptionalist narrative of America Saves the World. And what a relief that is, right? Because that then takes you to the kind of bedrock assumptions of the American republic and the project of the American republic, and everything it has meant for radicals, for progressives in this country for centuries, back to the founding. And that, I think, is a very long answer to this question of why it is that the American climate community and the left were, I agree with you, surprisingly uncritical.
The post The Complicated Legacy of Biden’s Climate Legislation appeared first on Foreign Policy.
