The Polycrisis
Tim Sahay and Kate Mackenzie on how geopolitics has been driving a quiet revolution in clean tech, and how the energy transition is in turn reshaping world power.
The Polycrisis
05 | Electric World Order | The US counterrevolution
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Can the US stop the electric wave? In 2022 the US introduced its first ever set of serious climate policies. That took an unprecedented collaboration of racial justice, environment and labour interests. But oil and gas interests fought back quickly and effectively. Now the 2nd Trump administration is using sanctions, trade wars, and military power in a bid to slow the energy transition.
Guests:
Rhiana Gunn-Wright - Advisor to NY Mayor Zohran Mamdani, former climate policy program director at the Roosevelt Institute
Ted Fertik - Vice President, manufacturing and industrial policy, Blue-Green Alliance; formerly of the Working Families Party.
Hosted by energy and climate finance expert Kate Mackenzie, and Tim Sahay from the net zero industrial policy lab at Johns Hopkins University. They co-author The Polycrisis newsletter, which explores connections between energy, geopolitics, climate change, finance and industry.
- Produced by Sarah Allely
- Music composed by Russell Stapleton
- Mixed by Bethany Stewart
Contact us at: polycrisispodcast@gmail.com
Just a note to say that these interviews were recorded before Israel and US attacked Iran, which just makes this episode all the more salient and also explains why we didn't mention the war.
SPEAKER_01Welcome to the Polycrisis Podcast. The geopolitics of the energy and technology transition.
SPEAKER_02This first season, Electric World Order, tells the story of the clash between new and old energy regimes.
SPEAKER_01There's a quiet revolution in energy, and we're exploring how this shift from the old fossil world to the new electric world order is unfolding. I'm Kate McKenzie, a Sydney-based energy and climate finance expert.
SPEAKER_02And I'm Timister High. I'm at Johns Hopkins University in the US, where I co-direct the Net Zero Industrial Policy Lab.
SPEAKER_01This episode, Counter-Revolution, will discuss how US efforts to stymie the energy transition in the rest of the world are likely to fail. And we'll hear how the US briefly looked like it was going to go green. But then the backlash destroyed those efforts. We'll look at how the US has heard about renewables bringing industry and jobs and cheap electricity. But the green future is being cancelled. The second Trump administration talks about a climate cult that created a green new scam.
SPEAKER_02Yeah, Kate, Trump has pulled the US out of the Paris Agreement, and most climate policies are being revoked. Electricity bills are now rising, green factories are being mockballed, even CO2 monitoring satellites are being pulled down from space.
SPEAKER_01Okay, so how did we get here, Tim? Because a few years ago, under the Biden administration, it looked like everything was going to be different and the US was actually really going to go green. There were several big climate bills. The best known one is the Inflation Reduction Act, or the IRA. And that did a lot of spending through tax breaks, which were basically unlimited. And the tax breaks were for producers like manufacturers of batteries and EVs and solar. But they were also for consumers, like EV rebates for consumers. And you once called this bottomless mimosas.
SPEAKER_02Yeah, as long as you were doing green stuff, if you were installing solar panels, if you were buying EVs, you got a discount and the government picked up your tab at the bar.
SPEAKER_01It was all uphill though because the fossil fuel industry was always there, and as soon as the IRA was in place, they started to fight back. It's a really powerful industry in the US because since the fracking boom of late 2000s and particularly early 2010s, the US has become this huge producer of oil and gas. It's the world's biggest producer of oil, even bigger than Saudi Arabia, and in just a decade it's gone from zero gas exports to being the biggest LNG exporter in the world as well.
SPEAKER_02And the moment the US developed that green plan for the very first time, oil and gas interests were absolutely radicalized and set out to crush it. This episode we'll hear from Ted Fertig from the Blue Green Alliance about what exactly the US is trying to do now on the world stage.
SPEAKER_01First up though, Tim, you spoke to Rihanna Gunright about how it was possible to get this green legislation through in the first place. Rihanna worked on a coalition of different interest groups, which you also were involved in working on as well, to build the political pressure to get the IRA and other bills passed, right?
SPEAKER_02Yeah, and then it just fell apart really quickly. Rihanna Cahnwright is now advising the New York mayor, Zoran Mamdani, on climate. Previously, Rihanna was the climate policy director at the Roosevelt Institute, where she led think tank's work on climate policy, public investment, racial equity, all of that was in the lead up to the IRA legislation passing.
SPEAKER_00I think there's a couple of reasons. One is because climate as an issue, and particularly framing climate as an issue with economic benefits. It'll create jobs, it'll create these new industries, etc. That framing was there. Another big part of it was COVID and the recession, which opened up a new conversation, both about government spending. There's just a real hunger in the US, both for new industries, but new industries tied to manufacturing. The US still loves the public, especially, largely still really loves that era of factory jobs when we were really a manufacturing hub. Um people might not have loved the actual jobs, but the security of the organization. And so the idea that clean energy was something that actually required new industries, that required new things to be built. Um that I think was really quite key in being able to land that message about jobs. Although climate does also mean shutting things down, right? Both things are true, but I think there was just a lot of yeah, a lot of hunger for what is the next engine of American growth gonna be, and something that is not just financialization, something that everyday people could actually see themselves getting jobs in.
SPEAKER_02Yeah, and just talking about everyday people again, like how how did climate become something seen as for well-being of people and for development and not just industry and jobs?
SPEAKER_00I think um a lot of the groundwork for climate being seen as something about wellness, I think was already happening. A lot of the language around climate was about saving the planet, even if people were largely talking about animals and like sort of natural landscapes, there was still a sense that this is tied to this is about the health of the earth, and then in turn our health. So I think some of that language was there. The idea I think that was really new and wasn't really new because it was already happening in environmental justice work, but was sort of new to mainstream narratives and discourse about climate and just to people in general, was the idea that you can address climate in ways that in turn addresses other issues, right?
SPEAKER_02Yeah, I mean, and I think some one of the reasons why it was very surprising for especially people outside the US was you know, the US is just seen as being this fossil fuel-dominated, powerful country with huge amounts of inequality, with a terrible, crappy welfare system. And so this idea of the Green New Deal was obviously a huge political effort to make it mainstream to get a bill passed, but in the end it ended up being quite fleeting. It's hard to achieve and fleeting. So, what was that fossil fuel sort of backlash? And why do you think it ended up being such a fleeting phase?
SPEAKER_00I thought it was really interesting how you describe the US, because that's true. Um, but I do think a lot of Americans actually do not see the US as what it is in lots of ways, which is a petrostate. Right? And the fossil fuel industry here has its hooks in so much. They're huge political donors. They, especially in southern states where the fossil fuel extraction or plastics, right, which are also very tied up in fossil fuels or processing, etc., they have very, very strong locks on state government too. And I think a lot of people also don't realize how much um to what extent American laws have been built to facilitate fossil fuel industries and to protect them and to subsidize them, right? And so I say all of that to say we used to talk about it uh when we first started working on the Green New Deal. We always knew that a fossil fuel backlash was inevitable, right? Like it they make far too much money and have far too much power that it wasn't going to happen. I think part of why it was fleeting, though, is that that recognition was and still is something that a lot of backers of the IRA did not want to address or grapple with, right? Like even it's one of the things that I think I regret the most from our work on the Green New Deal, and it carried over to the Biden administration. There was a lot of focus on clean energy supply and not very much focus or even a desire to discuss what that meant for fossil fuels. What does it mean in terms of windown? What does it mean in terms of how do we steward these industries responsibly, knowing that like this is a product we really cannot continue to engage with? Um, and there's no appetite for that. There was no appetite, right? There was a lot of real politics that was just they're too big to not engage, they have to lead this in some way. And so I think a lot of the fleetingness was that the IRA in lots of ways still attempted to treat fossil fuel companies as though they were allies, even though um, which prevented the coalition supporting the IRA, prevented the bill itself, in all the ways prevented us from doing anything to really prepare or address fossil fuel black backlash once it was happening. I think the other reason that it was so fleeting is because the Green New Deal was, I mean, political from the time it came out, but was taken, but right took it as such a flashpoint that I think a lot of people got nervous about climate being and clean energy and climate policy being swept up in quote unquote culture wars, right? And there was a real desire, even with the IRA, to make it kind of a political, um, but in a way that just was not, didn't face the fact that like it was already part of the culture wars. Climate has been part of the culture wars on the right for decades, right? Um, this is not new. It is tying fossil fuels to American identity, to visions of white masculinity, all of it has been going on for a very, very long time. And so when the backlash came hot and heavy, especially with Trump in office for a second term, it was just there was no legwork, there was no groundwork, right? There was no there was no answer, largely because a lot of folks didn't want to, didn't want to or didn't think we had any hope of taking on fossil fuel. So there was nothing.
SPEAKER_02Yeah, that's that's great. Thanks so much, Rihanna, for coming on to the Poly Crisis Podcast.
SPEAKER_00Thanks for having me.
SPEAKER_01So, Tim, we've just heard about how this very new type of political collaboration was needed and came together to get climate legislation through in the US in 2022. And then that meant that the government started actually seriously funding some clean energy deployment and manufacturing. But it didn't last very long, did it?
SPEAKER_02Yeah, and that was despite our best efforts. We tried to put green factories in Republican states and districts so that they wouldn't kill the bill. We tried to put green investments in cities so that Democrats would see the benefits of climate action. So, you know, we tr we tried our best, but but I think we completely underestimated our opponents who were radicalized and just kill the bill. So the actual politics behind it was partly aimed at combating China. That is critical to getting enough votes in Congress, and that is part of the bargaining between the Democrats and Republicans to force companies to make an America to invest at home. Someone who's written about how the US was trying to use climate policy to solve multiple problems, including its quest to dominate China, is Ted Fertig. Ted was at the Working Families Party, building a multicultural coalition for climate, jobs, justice, and care. And he is now vice president for industry and manufacturing at the Blue-Green Alliance of Labor Unions and Environmentalists.
SPEAKER_01Yeah, I spoke to Ted a bit more about how containing China was a big part of what the Biden administration was trying to solve for with its climate legislation. And how then the Trump administration came along and they see fossil fuels as central to US power and their leverage over the rest of the world. Hi, Ted.
SPEAKER_03Hi, Kate.
SPEAKER_01So the US is kind of a petrostate, right? But it's not that dependent on its oil and gas revenues. It has plenty of other sources of revenue. What would you say makes it different from other petrostates?
SPEAKER_03Well, the US is a gigantic and incredibly complex economy. Um, and so any attempt to reduce it to a single thing um risks really missing critical aspects of what makes it work as an economy. I think, you know, the extent to which the US can be classified as a petrostate is, you know, that we are the world's largest oil and gas producer, and we've set pretty astronomical records in both of those areas. And we have a political system that uh is extremely responsive to the perspectives and interests of uh of those industries and the actors in those industries. And lately we seem to have an alignment between the interests of some of those industries uh and the deeply ideological orientation towards energy policy and climate policy uh on the part of the current administration and and its allies in Congress. And I think that's created a configuration where we can act like a petrostate, even though, certainly, in my view, the the medium-term interests and the long-term interests of the United States are not served by uh by by imitating uh the genuine petrostates of the world when it comes to our climate and energy policy.
SPEAKER_01Can you explain to us how the IRA, what what were the kind of because this was a big deal in terms of US energy policy domestically, what were the different factors that were driving that? You know, it was it i it was a mix of domestic um and international concerns. And one of the things that's come through in your writing and and and other people's is the role of China in particular or the the administration's view of China at the time.
SPEAKER_03So my view has for some time been that there's there's three, whatever you want to call them. I I tend to call them mega trends, though. There's China, uh, there's the crises roiling the advanced democratic societies, whatever you want to call that, secular stagnation, populism, uh, but the the the apparent breakdown in the normal functioning of democratic capitalist politics in countries across the advanced capitalist world that was especially pronounced across the 2010s and in the United States manifested more than anything else in the election of Donald Trump in 2016. And then climate itself, which functions in a lot of different ways to influence how policymakers think, but you know, functions as a source of uh as a galvanizing, as a motivating, mobilizing force for many people who are genuinely concerned about their own future and the future uh of their children and grandchildren and people around the world to restrict carbon emissions. So climate itself functions in a lot of ways to drive climate policymaking. And I don't ever want to be understood as saying that that that just the sort of brute fact of climate change doesn't matter because I do I think it does. But those other factors matter um equally, in my view. And what they what putting it in those terms helps to frame, I think, is an understanding of what it was that policy was attempting to solve. And it was attempting to solve multiple things at once. It was attempting to make a dent in climate change. It was attempting to restrict, address a set of social and domestic social and political crises, perceived crises, right? And if you think about the COVID moment, it felt like acute crisis, right? Um and it was also meant to address uh a set of geopolitical challenges that were mostly tied up with the rise of China, which have a variety of dimensions to them. They have a technological dimension, they have a strategic competition dimension. Um, and I think certainly in the in the Biden administration, there was a there was a dimension of it about global leadership, right? Um, the question of, you know, who is which countries are able to present themselves on the world stage as being um able to address the challenges that everyone has identified as the core challenges that the world faces. Um and I think the perception that the US was um and had been a climate laggard, that the US was, you know, uh completely constrained by its uh fossil fuel industries and carbon-intensive sectors from from acting constructively on the climate problem on the world stage.
SPEAKER_01So having seen these different policy directions playing out and and being you know very involved in in helping some of it come into place, what do you think is in it for the administration that the US has now in terms of exerting influence to uh to maintain kind of fossil fuel consumption in other countries? Because you know, this is a feature of some of these deals that are being struck with other countries, is that you know, the countries will buy more US LNG or or other energy exports. And similarly with cars, you know, with the car manufacturing industries in Canada and Mexico, the the administration's being pretty um assertive in terms of you know wanting to maintain um internal combustion engine car use, right, domestically, but also but also in a way that then of course affects the the car industries of of those near neighbours who are really really bound up with the US. What do you think is behind this attempt to impose this kind of I don't know new wave of like fossil fuel hegemony on the rest of the world? Is that is that like a is that a coherent kind of approach or is this just a side effect of of other things?
SPEAKER_03No, I think it's very central to what they're what they're trying to do. Um and and and there's at least two dimensions or or two levels on which I would try to answer that question. So so the first, maybe more straightforwardly, is that they clearly see fossil fuels as a core element of US power, full stop. And so US production of um oil and gas, you know, and even in their um in their minds coal too, but let's let's bracket that for a second. But but US production of oil and gas, and I think you know it's probably fair to say the US ability to uh control the disposition of uh fossil production within its imperial remit, uh let's say, uh is just clearly something that the Trump people see as a uh as a source of strategic power and leverage on the world stage. Um in in a straightforward way, if uh if other countries are dependent on US energy imports for the basic functioning of their economy, um, that gives the US an extraordinary amount of leverage um in any geopolitical context that that may arise. Um so so I think they see that very straightforwardly as um as a vector of US global power. Probably LNG is the you know, where the where the strategic wedge is is is most powerful. Um but I think they they they also feel that they have some ability to influence where people are buying their oil um and that that is a source of power. And so I think if you if you look at something like the way that they blew up the um international maritime deal around uh carbon pricing and uh uh you know a kind of pathway towards a low or zero carbon future for the global shipping industry, what what they were signaling was that uh the US will will use its political power, its geopolitical heft to um impede decarbonization efforts anywhere that the US has the ability to prevent them. And that goes hand in hand with forcing oil and gas imports down the throats of the US's the countries that feel uh some kind of geopolitical or security dependence on the US right in line with uh though the ability that the US perceives to um force those company countries to accept much higher tariffs um you know in exchange for any kind of market access at all. So so so I do think that's that's something that's playing out domestically and it's playing out globally. And it it and the more that they can convince actors around the world that decarbonization is never going to happen, you know, the less there's any political pressure within the US itself around decarbonization and uh you know the more that those fossil assets that they so prize you know retain their value um and retain their their value as a source of political power on the world stage.
SPEAKER_01So just quickly your is is your sense are you saying that part of this is also about projecting fossil fuel dominance and persuading the rest of the world that that this is the way things are going to continue to be?
SPEAKER_03Yeah I mean and if you think about it there's a sort of there's an elementary rationality to it which is that if you're convinced that oil and gas are um a key vector of US power on the world stage, a world that doesn't need oil and gas is one in which US oil and gas production is going to yield a lower quotient of power over time you know the more that that dictates outcomes in in world politics.
SPEAKER_02Okay thanks so much Ted thank you so Kate what do you think of Ted's idea that the current US administration is trying to project fossil fuel hegemony on the world?
SPEAKER_01Look I absolutely agree and I think Ted and I had this idea around the same time maintaining the fossil fuel system helps the US because the US is big in fossil fuels so they want everyone to believe that that system will last forever.
SPEAKER_02Yeah where do we go if no one wants American oil and America has now lost years in the global green race. Maybe we just see a kind of reversal of what happened after the IRA passed. US allies and competitors will just get those jobs and industries while the US you know just boils in its own oil.
SPEAKER_01You've been listening to the first season of the Polycrisis I'm Kate McKenzie.
SPEAKER_02And I'm Tim Stahoy we publish a newsletter about the political economy of climate change amongst other things. You can sign up for that and find out more about us at thepolycrisis.com or in our show notes.
SPEAKER_01Our producer is Sarah Allerly Russell Stapleton composed our fabulous music Bethany Stewart is our sound engineer and Sarah Allerly is our executive producer as well