We’re Heading Toward a Very American Climate Tragedy
If Democrats fail to pass a climate policy, they will all but guarantee that the world will warm a dangerous degree and that the U.S. will surrender its technological advantage to China.
I try to avoid despair when writing about climate change. Having covered the topic for five years, I’ve learned that a game of telephone shapes what eventually enters circulation. Case in point: Last week, scientists presented satellite data showing that a floating piece of ice off the coast of Antarctica was beginning to splinter. That is concerning and surprising, but not catastrophic. Yet by the end of the journalistic rinse cycle, the concern had become a threat that the entire ice sheet was on the verge of collapse. And we don’t know that yet.
So: I try to avoid despair. But sometimes despair is the right emotion.
The United States is on the verge of a massive, history-rewriting failure. On Sunday, Senator Joe Manchin, the Democrats’ linchpin vote, told Fox News that he couldn’t vote for the Build Back Better Act, the vehicle for much of President Joe Biden’s legislative climate policy.
If that decision holds, then Manchin has virtually sealed the planet’s fate: The world is all but guaranteed to warm by more than 1.5 degrees Celsius above its preindustrial temperature by 2040. But it will also be a tragedy for the United States, which will all but surrender its technological advantage to China. In fact, I am concerned that by passing only the bipartisan infrastructure bill, and not a follow-up climate bill, Manchin and other Democrats are essentially subsidizing Chinese industrial supremacy.
If Build Back Better fails, it will be a catastrophe for the Democratic Party too. Biden has argued that only his moderation, his experience, and his institutionalism can relieve the country’s crises. Congressional Democrats followed by electing Nancy Pelosi and Chuck Schumer, geriatric pragmatists, to lead the House and the Senate, respectively. If this trio of moderates cannot deliver the goods—if they cannot, despite their decades of yammering, actually succeed in passing what is an aspirational but still insufficient climate law—then the center-left’s case for itself will collapse. The left will argue, more convincingly than ever, that only radicalism and political rupture constitute a sane response to the climate crisis.
Some pundits still think of climate policy in the way that it was first sketched in the 1990s: as a service to the world, as fundamentally the right thing to do. A country that adopted climate policy, the idea went, paid a voluntary cost for other countries’ benefit. But this view is incomplete, and it is dangerously out of sync with the events of the past few years. We now know that countries that develop a technology first tend to benefit the most. By acting early, countries help their domestic green-technology sectors—which is to say, their next-generation energy industries—develop a competitive advantage. As the domestic market for green technology grows, the companies serving it improve their products over time, learning to make their gadgets more quickly, cheaply, and efficiently. Then they sell their cheap, superior goods to the world.
And China, which Manchin highlights as America’s main global adversary, does not think this way. The country is no climate hero: Last year, its carbon pollution exceeded every wealthy country’s emissions combined. But its leadership has seized on new energy technology anyway, for reasons largely unrelated to climate change. Because of its dependence on Middle Eastern oil and American natural gas, the Chinese government has tried to develop as many energy resources inside its borders as it can. Its years of toxic air pollution have given it a political need, too, to develop as much low-emissions energy as possible.
All of these things—the world’s interest, the country’s self-interest—add up to one conclusion: Something has to pass. Some version of a climate bill. Any version of it.
What is so frustrating is that the largest disputes over the bill aren’t about climate policy. Instead, they’re about the dozens of social policies in the Build Back Better package. Manchin wants Democratic leaders to pick which of those programs to extend indefinitely. (Because of the Senate procedure used to pass the Build Back Better bill, it must not affect the size of the budget 10 years from now.) Yet so far, Schumer and Pelosi have refused. They have instead phased these programs out over the next decade in the hopes that a future Congress will renew them. Manchin has fumed at this approach, because he says that extending all the programs indefinitely will swell the budget by $4.5 trillion, which is smaller than his own top-line $1.8 trillion figure.
We now know that, last week, Manchin proposed a package of exactly that size that includes more than $500 billion in climate spending, according to The Washington Post. The White House was considering how to respond when, according to The Hill, a tiff broke out over whether Biden could put Manchin’s name in a press release, of all things. (I don’t get that part either.) But if, like me, you believe that Biden must pass climate policy during this particular moment in time—when we can detect climate change but still act on it before it becomes irreversible—then it’s almost self-evident that Democrats should have taken this deal, and should do their best to get it back on the table, if it’s not already. If you believe what Democrats say about climate change, then virtually any social policy, including the child tax credit, is worth sacrificing so that decarbonization can become law.
There is an instinct among some progressives that Biden should cut his losses here and jump to executive action. This is horrible advice. It might do something, but it would not be enough. Models from the Princeton ZERO Lab show that Biden’s goal of cutting U.S. carbon pollution in half by 2030 (compared with its all-time high) will be far easier if Congress passes climate legislation.
Any deal that Democrats can reach will strengthen their ability to pass climate-focused rules later—because when the federal government uses its power to make things cheaper … they’re cheaper. This matters for federal rule-making because, since Ronald Reagan’s presidency, every new federal regulation has had to pass a cost-benefit analysis; that is, a federal agency must show that a proposed rule’s estimated costs, as measured in dollars, are smaller than its estimated benefits, in dollars. If the federal government is planning to spend money to subsidize climate-friendly technology, that lowers the estimated costs of adopting a more aggressive rule. So if Congress subsidizes the cost of electric home-heating appliances, then the Department of Energy will be able to pass more stringent efficiency rules for them. If it subsidizes electric-vehicle purchases, then the Environmental Protection Agency’s tailpipe-pollution rules can get more stringent.
Because of the bipartisan infrastructure bill, the U.S. is about to go on a research-spending spree. (Manchin gestures to this in his argument against Build Back Better, and on the facts at least, he’s right.) R&D is fantastic, and conventional economists are correct to frame it as a public good, a blessing to society that the government can and should fund. But pure research gets us only so far. And if the United States is not careful—if it does not create a market for the new ideas that it generates—then every new technology that its R&D discovers will slip through its fingers.
America used to be good at both developing new ideas and converting them into products. The car, the airplane, the computer—in the 20th century, Americans invented key technologies underpinning these and then successfully commercialized them.
The United States is an innovation leader: The world envies our classrooms, universities, and national labs; our government scientists and publicly funded professors develop the ideas, materials, and approaches that dictate the frontier of knowledge. But it is not actually a technological leader. (Is there a single appliance in your house that you can say, with any certainty, rolled off an American assembly line and improves your life? Not your computer or cellphone. Not your microwave.) This is because it cannot translate its ideas into products. It cannot convert its world-class research into marketable goods that will actually sell. As I’ve written, U.S.-funded research at U.S. labs produced the first solar panel, in the 1950s. But the U.S. government declined to develop a market for solar technology, and by the 1980s it was Japanese firms, not American firms, that had successfully brought solar panels to market.
As Nikos Tsafos, the James Schlesinger Chair of Energy and Geopolitics at the Center for Strategic and International Studies, recently wrote, the U.S. fails to develop markets for its innovations. This is what happened with solar panels. It is what is happening now with semiconductors. And it is what will happen to the breakthrough innovations that the bipartisan infrastructure bill creates.
How to avoid that fate? We need, first, federal agencies that know that their job is to seed new innovations into the public sector. But we also need public policy that guarantees demand for new technologies. We need the type of tax credits, purchase guarantees, and subsidies funded in the Build Back Better bill to help assure entrepreneurs that a market exists for any new innovations that they would translate into products. We need policies like Manchin’s 48C tax credit, which incentivizes companies to place advanced-energy factories in rural areas. These are all policies funded in the Build Back Better bill. The country is as close as it’s been in decades to patching up its innovation-to-market pipeline. Democrats must seal it. It’s time to pass a bill or destroy the party trying.