← Shift Key with Robinson Meyer
Shift Key with Robinson Meyer
A New Theory About Why Biden’s Big Climate Law Failed
00:51:37
Rob looks back on the political theory behind the Inflation Reduction Act with the University of Michigan’s Alexander Gazmarian.
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- [00:00]
Robinson Meyer
This episode of Shift Key is brought
- [00:02]
Sponsor Announcer (Yale Center for Business and the Environment)
to you by the Yale center for Business and the Environment. Want to accelerate your career in energy? Explore online certificate programs from our sponsor, the Yale center for Business and the Environment. Whether you're designing, policy unlocking, financing or developing impactful projects, Yale's online clean energy programs equip you with tangible skills and powerful networks and you can continue working while learning in just five hours a week. Propel your career, expand your network and make a difference. Learn more about their 10 month financing and deploying clean energy program or their 5 month clean and Equitable Energy Development Program by checking out the show Notes or heading to cbey yale.edu to learn more listeners of Shift Key get an exclusive offer, use referral code HEATMAP26 and get your application in by the priority deadline for $500 off tuition to one of Yale's online certificate programs in clean energy. Transform your career, your and the energy landscape. Head to CBY yale.edu to learn more CBey yale edu that's CBey yale.edu.
- [01:26]
Robinson Meyer (Host, Shift Key)
Hi, I'm Robinson Meyer, the founding Executive editor of HEMAP News. You are listening to Shifsky he mass podcast about decarbonization and the shift away from fossil fuels. It is Wednesday, March 11. The inflation reduction act was the biggest climate law passed in American history, and probably the biggest climate law passed by any government ever. Although some Chinese industrial policies could give it a run for its money. When President Biden signed it into law almost three years ago, Democrats had high hopes for the statute. They imagined a country transformed with new factories, new solar farms, a new engine of the economy. And since it was enacted, the US has seen more than $819 billion in clean investment. That's public and private investment combined, according to MIT and Rhodium Group data. But of course, despite that success, the IRA didn't survive. Last summer, the Trump administration and Republicans in Congress passed the One Big Beautiful Bill Act, a giant tax cuts and spending package that repealed many of the key emissions reducing policies from the Iraq. Gone are the demand side incentives for electric vehicles as well as the long term tax credits for wind and solar energy. This has left many in the climate community asking what happened?
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Robinson Meyer
How did they go from the heights
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Robinson Meyer (Host, Shift Key)
of policy success to the depths of an ignominious repeal in just three years? Well, our guest today might have some answers and point to a way forward. Joining me on Shift Key is Alexander Gazmarian. He's an Assistant professor of Political Science at the University of Michigan and the co author with Helen Milner of the book Climate Fault Lines, the New Political Economy of a Warming World. He's also the co author of a new paper published last month in the Proceedings of the National Academy of Sciences titled why Biden Era Clean Energy Investment Policies Had Limited Political Returns. It offers a new theory for why the IRA didn't survive. Today on Shift Key, we're going to
- [03:18]
Robinson Meyer
talk about that paper.
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Robinson Meyer (Host, Shift Key)
The trade off the Democrats face between taking credit for policies and making them durable and why credibility matters so much for politicians and everyone else. It's all coming up on Shift Key.
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Robinson Meyer
Alex, welcome to Shift Key.
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Alexander Gazmarian
Hi, Rob, it's great to be here.
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Robinson Meyer
So can you just start by describing your recent study and what you found?
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Alexander Gazmarian
So as your listeners, I'm sure will be familiar, the Biden administration's Inflation Reduction act was the largest investment in clean energy in American history. And many of the reformers intended for the IRA to do more than just address climate change. They also had a political theory which was we're going to deliver these economic benefits to communities and voters will reward Democratic politicians for it. So in our paper with Nate Jensen at UT Austin and Dustin Tingley at Harvard, we wanted to see, did this actually happen? So what we did was we surveyed 5,000 people in 2024 and we asked them, one, did you see new green investments? And two, if so, who did you credit? And we took these survey responses and we linked it up with the location of projects. And so this is what we found. We found first that these investments were modestly visible, so people living closer to them were more likely to say they noticed them, but they weren't traceable. So people closer to these projects weren't more likely to connect them back to the Biden administration. In fact, they thought the governor was most responsible for these investments by much more than Biden. And if we look at the data on who's claiming credit, it's governors who are much more active in sustaining their credit claiming activities. So the takeaway was the IRA was visible, but it wasn't traceable.
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Robinson Meyer
How did you measure basically, who was claiming credit for these?
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Alexander Gazmarian
Yeah, so we constructed a big data set for each project. We had an army of research assistants go through and see, all right, did the company issue a statement? All right, if so, collect that statement. Did the governor, did the senator, did the House represent, you know, the, the district representative issue a statement? So first we collected this big data set to see who's issuing statements. We checked everything, social media company, press releases and so on. And so we could see, okay, how frequently are statements being issued. And then we looked at what are they saying. So we went through each of the statements and we coded who was getting credit, who is being described as showing up at the ribbon cutting or so on. And what we found was the number one claimer of credit, the number one politician making these statements was governors. So governors issue statements on two thirds of projects, clean energy, manufacturing projects, Biden administration officials, broadly defined. So not just Biden, but include Secretary Granholm and so on, only making statements on about half of projects. And then if we look at what are the companies saying, and we're really interested in the companies because the companies are much more apolitical than these other potentially partisan actors. And the companies are spreading credit widely. They're crediting the governor, the local officials, the Biden administration. And that makes sense because these companies, they're diplomats, they're not partisan actors. They have to work with a lot of different levels of government to make these projects happen.
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Robinson Meyer
I have a few questions about the study, then we're going to get into what it means. So did you track at all whether people liked the projects that were going up? And if so, did you see any distinction between say clean energy projects and clean manufacturing projects?
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Alexander Gazmarian
Yeah. So on the survey we also asked a question that said, do you think these projects are going to benefit or harm your community? And overall, majority of people across the political spectrum thought these projects were beneficial, economically beneficial. And this is actually tracks of a lot of public opinion research on clean energy projects, manufacturing projects in general. People tend to like these projects. There's a separate conversation to have about the sort of politics of siting. But if you ask people if you like these projects, they say they like them. And that actually doesn't vary much depending on where these projects are built. And the second part of your question is, are there differences based off of the type of project? So we separately analyze manufacturing projects from electricity projects, solar, wind, because you think the job creation benefits are much larger. A lot of the solar wind investments are very capital intensive, less labor intensive, more, you know, short term construction versus long term jobs. And we really didn't see much of a difference when separating out based off of the type of project.
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Robinson Meyer
It's so interesting because we do polling through Heat Map Pro to basically detect how people are feeling about wind and solar projects in their area. And one thing we found is that people can be very supportive of these projects in theory, but then far less supportive when they are actually being built near them. There's a solar project that's somewhere else in the county, they're fine with it. But if it's somewhere in their county that they know and like and is proximate to their house, they might not be as big a fan. But it sounds like, however these projects were getting cited, by and large people thought well of them.
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Alexander Gazmarian
Yeah, that's. We have no indication in our data that there was a sort of backlash to these projects. But what you point out is, you know, right, in the sense that people like a lot of these clean energy projects in the abstract, but if they want it cited next to their house, there tends to be less local support when it comes to these manufacturing projects. I think the manufacturing projects might be slightly different because they're creating many more jobs and so on, but they also raise a different set of concerns. People are worried about things like water usage, increased traffic, and so on. This is a separate problem with the potential political logic of the deliverism thesis. But despite this concern, we don't see any sign of it in our data.
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Robinson Meyer
And it doesn't also sound like there was any geographic diversity in how people felt about these two. Another thing we see in our data is like the Sun Belt is very favorable to clean energy projects, to manufacturing projects, to economic development of all types in ways that, say the Northeast is not. But it doesn't sound like you saw these regional divergences either.
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Alexander Gazmarian
So we're really interested in figuring out cause and effect. So we do a lot in our analysis to hold constant these different differences. Right, because you might be worried the political composition of voters varies across these places. So we're holding a lot of that constant. But we do look at some of these differences less so in terms of geography. But we look at differences in terms of is the survey taker Republican or Democrat? And what was remarkable is we thought maybe the Democratic survey takers might be more likely to link it back to Biden if they were closer. And we don't, we don't see that the Democratic survey takers, the independent survey takers, act a lot like the Republican survey takers next to these projects.
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Robinson Meyer
So let's talk about then what your interpretation of these results are. That's the $800 billion question. There's a number of different theories floating around about how the IRA would work and I want to talk about them. But what's your interpretation of how this paper should be thought about and what it found?
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Alexander Gazmarian
This paper tells us that we need to be clear eyed about the trade offs when designing climate policy. So when the government's channeling money through tax credits, to private companies. There are structural barriers to claiming political credit. You know, voters are going to see the company, they might see the governor, they're not going to see the policy behind the reform. But one thing I want people to take away is that that's not necessarily bad news for the energy transition. Sharing credit may actually lead to more durable climate policy. Monopolizing credit has its risks because it can make clean energy partisan when what we need is a broad bipartisan consensus. And at the same time though, sharing credit alone is still not enough because you need people on the ground, you need local organizations, unions, civic leaders that can help people in these communities understand the role of federal policy. And that was part of the piece that was missing. This organizational capacity that's ground up and not just top down messaging.
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Robinson Meyer
What's your interpretation of kind of what was missing from the IRA rollout then?
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Alexander Gazmarian
This is actually something people who listen to this podcast will remember from past discussions. But on the tax incentive side, there was not much mobilization on the community level helping provide information to community members about the role of the Inflation Reduction Act. Let me give you an example, which actually was part of the reason that I got interested in this study. Back in 2023, I drove out to Weirton, West Virginia, which is the site of a new form energy battery plant. You know, this is an old steel mill town. It's incredibly symbolic. It's like out of the ashes of this steel mill you have this battery plant rising. And I was interested in going to this town because it's the sort of prototypical example of IRA investment in a red state. Two reactions I had from going there, talking to people on the street, talking to local officials was nobody knew the IRA had a role to play. In fact, I pressed local politician on who do you think is responsible for this project? And they laughed and they said, I think Baby Dog is responsible for this project. I said what is Baby Dog? And said that's the name of Jim Justice, Governor justice, then Governor Justice's dog, who he would actually even take around to all these sort of ribbon cutting public engagement ceremonies. The dog had its own little seat and it just sort of demonstrative of these local and state politicians are very good at claiming credit. And I think there is a misconception. It's not always credit where credit's not due. In fact, the state government provided its own set of tax incentive policies that helped form Energy Locate there. You know, these companies are trying to decide where to locate across the entire United States. And there's a suite of state and local policy incentives along with federal incentives. So this is just to illustrate. If local elected officials can't tie it back to Biden, people on the street aren't going to tie it back to Biden. Is just unrealistic to expect there to be political returns.
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Robinson Meyer
How much do you think governors actually do deserve credit here? Because one thing we observed was that, like, yeah, a lot of the benefits of the IRA were going to Georgia, we're going to Texas, we're going to Arizona, and then we're going to the kind of Middle south region that was eventually kind of abortively dubbed the Battery Belt. Right. And part of that was because, yes, labor is cheaper in those places. Yes, you know, they're right to work states. Yes, land is cheaper. But another part of it that I feel like was overlooked sometimes was that it was actually, it was a state capacity story. And it was that those states, Tennessee, Arkansas, Kentucky, Georgia, had very aggressive departments of commerce or state economic development boards that were quite proactive about getting new projects to come to their state in a way that I think places that maybe hoped to benefit from the IRA but then ultimately maybe did not, as much like Michigan, let's say, did not take the same, you know, entrepreneurial approach to the policy. I mean, it sounds like this is kind of what you're saying, but maybe they're right to attribute some of this to their state government, because actually it's their state that is the reason they're getting this clean energy factory and not another neighboring state.
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Alexander Gazmarian
I think that's right. The governors and state and local officials play an incredibly important role in attracting these investments. And so long as you're operating within this tax credit framework, tax credits, they're an incentive that can push a company to make an investment that might not already would have. There are certain elements of the IRA that tried to channel these to certain geographies, energy communities and so on. But the state government is trying to attract this investment and say, you should come to this state rather than going to this other state, and they're going to give a generous set of tax abatement policies, other types of incentives and inducements to get them to come there. So by nature of how the tax policy is set up, it's going to have a role for state and local actors. And I can't quantify that they're responsible for 50% of the investment per se, but their role is legitimate. So this is not just a case of people claiming credit where credit isn't due. This is a reasonable thing for governors to actually attend these ribbon cutting ceremonies. Insane. They played a role.
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Robinson Meyer
Maybe this came up in your field work. Maybe this came up in the survey. When we try to think about the ira, how much of an effect is it that the President could not speak or really struggled to communicate some of the more maybe complex ideas that he needed to in order to like sell these projects to the American people?
- [15:50]
Alexander Gazmarian
So the first thing I would say is just looking at the data. And of course we don't have access to the internal White House deliberations, but if we look at the data, Presidential messaging is at its highest immediately after the IRA's passage and it falls over time, whereas governors sustain their messaging. But I think an important takeaway from this paper and the question you're asking essentially is, well, what would a more vigorous messaging strategy would have meant in these areas where they got projects? I think a top down messaging strategy would not have been as effective without bottom up organization. And in fact, a top down messaging strategy could have backfired in several ways. Most notably, it could have polarized projects locally because this is happening in red and purple states. If you tie Biden's name to it, they might be less willing to go along with these projects. And ultimately, if we care about rapid decarbonization, which I think we should care about, that this might actually make it more difficult to build a broad bipartisan coalition. Whereas if you have organizational sort of investments with your local unions or your civic organizations, those are much more trusted actors who could help people connect the dots between federal policy and what's happening, these investments in their community. So at the end of the day, there's huge structural disadvantage. Regardless of whether the Biden administration wanted to more actively message or not. They were. It had structural problems in that governors can more easily claim credit for projects in their state. They're on the ground, they can visit more of these projects, they can message more. Companies are spreading the credit more broadly because they have to work with a lot of people. So I think that just given the setup, this policy design of tax credits, there are structural barriers to getting credit, even if you're a more vigorous messenger, unless you're investing in some sort of bottom up organizational capacity.
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Robinson Meyer
That's so interesting because I feel like one of the things that did happen was that a lot of money was spent to get churches, schools and civic organizations to install rooftop solar, to install batteries, to electrify the rest of whatever building stock they owned. In some ways, more money was spent on that than I think to like message the policies per Se and yet it doesn't seem like that was successful either.
- [18:08]
Alexander Gazmarian
The IRA is, as you know and your listeners know, is a huge bill and it has this sort of set of grant based programs that has the set of tax credits and the actual organizing around it during the implementation phase focused a lot more on the grant based provisions. And a lot of those groups, if you're focusing on the question of, well, would this affect election outcomes, you know, a lot of those groups are probably already going to vote for Democratic policymakers and are not sort of representative of these, you know, switchable voters or voters who could be, you know, might not have voted, but then to get mobilized. So to the extent, you know, just as a question of are there voters who could be converted or mobilized, it's the voters in the red and purple states where these manufacturing projects are going. So if that was your goal, then you would want to allocate more organizational capacity there.
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Robinson Meyer
That does sound like you're hitting on a deeper issue with all of this though, which is that the voters who care about climate change are at this point already Democrats. And so if you want to tell people you're doing something good for climate change, then they're already Democrats. And you can't change how they're going to vote because they're already in your column if you're a, you know, presumably a Democratic policymaker trying to enact like a positive feedback loop of decarbonization policy. And yet if you want to reach these independent voters or these Republican voters and you talk about climate change, then you, and you talk about the, all the good work you're doing as a Democrat, then you're kind of polarizing those voters against projects that otherwise you'd actually like them to support in order to keep the project or the underlying policy around.
- [19:41]
Alexander Gazmarian
No, exactly. And the other thing I was going to say about the form energy plant is exactly about this. When I was talking to people about the plant and seeing how they understood it, they don't understand it as a climate project. They don't understand it as a clean energy project even. They say our grid is growing and our grid needs storage. And we need that whether or not the power is being generated from coal or we need that whether the power is being generated from the sun or the wind. And that actually in my mind is a perfect example of you don't need to talk about saving the planet or talk about the climate when you can just talk about these are good technologies that we need for the economy to be competitive or for the realities of our electric grid. And that resonates a lot more in these red and purple states.
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Robinson Meyer
Biden used to talk about. When I hear climate, I talk about jobs. And the message from the White House and the message from Democratic lawmakers about how this policy was going to work is that people would flock to these projects. They'd be very successful. That would create a groundswell of support for them and make the underlying policy enduring in a way that, like previous climate policy has not been. And I think Democratic policymakers, in doing that, were, like, hearkening back to their experience with the Affordable Care act in the late 2000 teens, where the Affordable Care act was not popular at all. And then Trump tried to repeal it. People discovered all the way it was benefiting their lives. And then ultimately, Trump was only able to repeal certain aspects of it in ways that, like, may have fatally damaged the underlying economic structure of the law in the long term. But ultimately, a lot of the benefits of the law for ordinary Americans were sustained. And I think Democrats took away from that story that, like, yes, you can do a big policy by reconciliation and it might be unpopular, but, like, ultimately, people will rally to the law once it's threatened. And of course, like, that then didn't happen when the Trump administration went to go repeal the law last year. And so one question here is, like, when you were detecting whether people noticed these projects, did you detect any difference or did you have any mechanism to observe, like, planned investment, of which there were tens of billions of dollars versus real investment that was actually boots on the ground, so to speak, factories actually employing people? Because I think one thing we've seen at heatmap is like, yeah, the Form Energy project is amazing. You know, it's a factory. It's actually working. It's in West Virginia. It's employing people. They just got this big data center deal with goog that's like a real company seemingly doing real work. But there were a lot of, like, other EV factories that were supposed to be built across, especially the Southeast, that, like, maybe bought land and maybe began work on a factory, but never employed people and never actually created the positive benefits that you would then expect to see voters or workers rally to protect when the underlying policy is threatened.
- [22:34]
Alexander Gazmarian
So we checked whether there are differences by operational status, facilities where it was just an announcement versus ones that actually had jobs created. And there are some slight differences, but nothing that changes the overall conclusion. People still didn't trace it back to Biden. And I think the Obamacare analogy I've always found interesting because I think it's misplaced. And here's why I think it's misplaced is that Obamacare is this much more direct, tangible benefit to individuals. Right. You go onto healthcare.gov, you find your plan and so on. And this is building off of this broader political.
- [23:13]
Robinson Meyer
Yeah, and it was really pre existing conditions what created the durability of Obamacare was not even the fact that you could buy plans and maybe they were subsidized and people really liked the healthcare.gov experience. I don't think that people like loved the marketplace per se. What people absolutely rallied to prot was the fact they couldn't be denied insurance coverage for having pre existing conditions. And it was the creation of that individual right within the insurance market that actually was what became the rallying flag of the campaign that ultimately I think saved many of the aspects of Obamacare.
- [23:49]
Alexander Gazmarian
No, exactly. And that's also the lesson from when political scientists have studied this process they call policy feedback. When you have this clearly just designated beneficiary, be it older people who are eligible for Medicare right Social Security benefits, pre existing conditions, it's much clearer for you to be able to connect the dots back to the federal government. Whereas with the tax credit based approach. Tax credits may be a sensible policy instrument for incentivizing investment, but they're very challenging to connect back the dots given all the other factors in between. Even if you're an individual directly employed at one of these facilities, it still requires a lot of extra political knowledge to understand what's happening given the message environment. We have the messages from the governors, from the local politicians and so on.
- [24:36]
Robinson Meyer
This week's episode of Shift Key is
- [24:38]
Sponsor Announcer (Yale Center for Business and the Environment)
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- [25:54]
Robinson Meyer
That's awesome.
- [25:55]
Sponsor Announcer (Yale Center for Business and the Environment)
Head to cbey yale.edu to learn more. Check out the show notes cbey Yale.
- [26:02]
Robinson Meyer
Edu.
- [26:03]
Sponsor Announcer (Yale Center for Business and the Environment)
That's cbey Yale.
- [26:06]
Robinson Meyer
Edu. Democratic lawmaker definitely talked up this theory that we're going to build this policy and and then the public is going to rally to protect it. But before the IRA passed, the mechanism that was discussed was a little different. I wrote the story for the Atlantic in 2021, 2022 that talked about this idea of a green spiral and the idea basically that by enacting pro decarbonization policy, you get companies more invested in decarbonization and that then drives another round of policy, you know, and ultimately there is backlash. But it is the previous investment that makes corporate action and ultimately policy sticky. And that theory was like, very dependent on this political scientist Nina Kelsey's work at gw and she studies the Montreal Protocol, which was, as many listeners will know, the big UN treaty to solve the ozone problem. And ultimately, in this very famous example, the US Was a big opponent of doing any kind of international multilateral work on reducing the production of chemicals that were damaging the ozone layer, until what she describes as basically US companies realized that they were about to get out competed producing these rapidly commoditizing chemicals and refrigerants and such that were damaging the ozone layer. And they realized that by selling replacement chemicals, they would both have a monopoly on those replacement chemicals and also would have a whole new market, which is all the buyers of the existing chemicals would have to come back to them and buy new refrigerants. And this mechanism where, you know, corporates rallied to, to assist and ultimately then protect global environmental policy, led to a kind of ratchet over time of US Chemical companies supporting treaties to protect the ozone layer and ultimately fighting for more aggressive treaties to the point that, you know, through the first Trump administration, through the Biden administration, the Senate was ratifying amendments to the Montreal Protocol and also enacting equivalent law around the Montreal Protocol, like under Trump. And it was because these policies that were notionally environmental policies had like, huge corporate support. But in her theory, it wasn't the public that was rallying to this. It was that companies were like doing investment and then they worked to protect their investment. So I guess my two part question here is I totally agree with you that Democrats talked about this theory that the public would rally around these policies. But if we are going to adopt a more realistic view, was that the wrong theory to invest in number one and number two, like what can your study tell us about the success or failure of that theory?
- [28:51]
Alexander Gazmarian
Voters struggle to connect the dots, but companies are much better at connecting the dots. You know, companies have lobbyists who tell them about what's happening in D.C. it's much easier for companies and much more realistic to expect companies to act in their self interest and lobby to protect their interests than voters. If you have two theories of policy feedback effects, one theory is this firm centric theory. You're going to build these green interest groups. They're going to act in their self interest. As they get stronger, they'll have more influence, they'll keep growing and growing and it'll expand and then maybe there'll be a counterweight to the fossil fuel interest. So that's more the firm feedback theory, this green spiral as you call it and then the voter theory, which you heard a lot of people sort of optimistically saying this is going to lead to more support for Democrats and then if you have Democrats win then that will protect the policy from repeal in theory. I think our findings say that the firm feedback theory is much more likely to operate. We're not specifically looking at firm lobbying activities to the extent that we look at firms, though we do show that they are rather diplomatic in how they talk about federal legislation. They're still spreading credit, but what they're doing behind the scenes lobbying is another question much harder to observe. But we did see a set of trade coalitions lobby to defend specific provisions of the inflation reduction Act. The auto industry is interesting because they worked much harder on 45x the tax credit advanced manufacturing than it, it seems that they did for the EV consumer side tax credit, which is curious given the importance of the demand poll. But I would say, you know, there's, you can think of these theories separately, firms and voters, but there are important interconnections or interdependencies in the theories. So if a firm is going to a Republican member of Congress and saying we need this incentive, if that member of Congress doesn't think voters in their district are going to understand the consequences of their vote on let's say the Republican omnibus budget bill, then they might be less willing to stick their neck out and go against what the party leadership is saying. These two theories are interdependent. And so you can't just say, write off voters and say they're not relevant. It's still important to invest in that ground up organizational capacity to help them connect federal policy to their livelihoods.
- [31:16]
Robinson Meyer
And I think in some ways the experience during the one big Beautiful Bill act like confirms this observation and I think also maybe affirms the more firm centric view, because what we saw is that once there was a legislative package that was attached to a president who was popular within his own party at the time of enactment, then it was very hard for individual lawmakers to. To rebel on that package. Right. Ultimately there was going to be a majority for that package in some form in the Republican House and Senate caucus. But that didn't keep individual senators or individual, you know, House lawmakers from fighting as they did. The Republican Senate caucus did actually preserve the tax credit for energy storage in the one big beautiful bill act. Yet the IRA created this whole set of tax credits for solar and wind and nuclear, and Republicans actually kept those all around except for wind and solar, and actually even then structured the wind and solar tax credit so that they will repeal and they will repeal during the Trump administration. I think you could argue the repeal was structured in a way that, while it is damaging, was not meant to damage projects where investment decisions had already been made. And that suggests that, like, lawmakers will find it very difficult to challenge a president or a legislative package on an issue that is highly salient and highly polarized, but they will work in the background to make that legislative package less damaging to the material interests of their voters.
- [32:52]
Alexander Gazmarian
I think that's right. One thing I would say differently is that if you think about the things that survived, they're much more bipartisan in the sense of geothermal, nuclear and so on. So I think the big question is, well, how do we make wind, solar, these other technologies more bipartisan? And I think it's entirely possible because if you look at some of the states that have a lot of wind and solar, these are red states, partly because of geography, partly also because of the set of permitting laws that they have set up there, it's quite possible that a sharing the credit strategy can create buy in from across the aisle potentially in the future. Because you have Republican governors like Kemp in Georgia with EV investments, the state senators there too, although in this case they're Democrats for now, but then you also have in other states significant EV battery investments and so on. That there are material interests that firms will lobby to to end. And to the extent that those are about competing with China and less about saving the planet, that can be easier to separate it out from this partisan culture war over the environment.
- [34:05]
Robinson Meyer
It seems like there's two different theories of what future climate action could look like that are emerging. And one of them is relatively firm, centric and elite driven and focused on depolarizing climate and focused on let's talk about economic development, let's not talk about climate. That in fact we didn't really talk about it in this conversation, but that maybe one of the things the IRA revealed is that there isn't this groundswell of public support for decarbonization and a lot of the voters who do care are maybe already democratic. And then there's a second theory that says no, no, no, the issue with the IRA is that it didn't go far enough with using the public. And the only way to create a groundswell of decarbonization, which is what you have to do by given the science, et cetera, is to actually go in there with public entities and have the president empower public entities. That might be polarizing, but they're going to be so clear and unmistakable that they will create this positive feedback that the IRA failed to do. What did the process of the research and writing here tell you about which theory is maybe more likely to hold water going forward?
- [35:13]
Alexander Gazmarian
The paper would say the latter strategy would be much more visible, right, and traceable, and most importantly to the federal government. Now of course, that might be unpopular for another set of reasons, given the beliefs that Americans have about government ownership. That said, there are government owned utilities. The US Government recently has taken a stake in Intel. I'm not going to advocate this particular policy stance. And you could also see potential downsides in a more clear government role in the at least think about electricity markets. As electric rates are starting to go up, you could inadvertently tie yourself to this bad price increase. I think there's a lot of different trade offs in these strategies. What the paper does say is a more general principle is that policymakers need to be cognizant of these trade offs when they're calibrating well, how much political credit do I want to get in the next election versus do I want to prioritize a more economically efficient policy? And so long as policymakers are pursuing this tax credit based approach, they're structurally unlikely to get credit. And if that's the case, then maybe they can afford to pursue a more efficient policy or they need to adopt a different political logic, which could be this more firm centric approach to policy feedback.
- [36:32]
Robinson Meyer
One of the bizarre experiences of covering the Biden administration was that the big reconciliation bill, the big legislative landmark package that came out of the Biden administration was this set of tax credits and $100 billion of direct spending as well. And as a climate reporter, I always felt like there was a disconnect happening because he wasn't getting credit for it from a lot of even environmental groups. They would talk about it, but it didn't seem like their constituents were especially moved by the fact that Democrats had just used their one big reconciliation shot of the administration on climate. And it was a place where a tremendous amount of money was getting spent, but it was having no clear effect on the ground truth politics. It sounds like maybe another lesson of the paper is industrial development or this kind of decarbonization. Voter centric theory just cannot sustain the coalition that maybe decarbonization advocates would like it to.
- [37:31]
Alexander Gazmarian
There's a few different audiences in the way that the Biden administration tried to use the bill that they're trying to speak to. And this may just be a product. You have a lot of cooks in the kitchen. They want to achieve different things. Right. So one thing you could say, and one theory is, okay, we've got this big climate bill. We think that young voters, the base likes climate, so this will help turn them out. Right. And it's unclear whether that happened because maybe the base was going to turn out no matter what. That's a really hard counterfactual test.
- [38:01]
Robinson Meyer
But they lost young voters.
- [38:04]
Alexander Gazmarian
Well, I mean, this is, this is a, just a broader problem of, you know, you have a single election and people like to read different narratives into what the election outcome might be. And maybe Occam's Razor says the simplest reason the election outcome was the way it was is inflation was high.
- [38:19]
Robinson Meyer
Yeah.
- [38:20]
Alexander Gazmarian
And then, so that's one theory of voting. Other theory of voting is what our paper looks at, which is the direct beneficiaries of these policies. And that given the current sort of organizational capacity, seems like it's unlikely to have a political reward. And, you know, this gets back to Some Climate Politics 101. In the general public, there are not climate voters. Most people are voting based off of economic circumstances. So if you can convince people that you're going to be the party that's best for prices or that is best for their material economic circumstances and the way they understand that that's what's going to matter at the End of the day. So framing policy along those lines seems like it's the most effective approach. And I think part of the challenge is that you saw people making these messages, right? There is a lot of messaging around the ira. It said we needed to compete with China, this industrial reshoring activity that we're doing. But there is toggling between different messages because on the one hand people are saying this is the Democratic climate bill, on the other hand, people are saying this bipartisan revitalization of our supply chains and so on. And so it's not very surprising given that, you know, people were providing different messages to different audiences, that not a single thing cut through.
- [39:37]
Robinson Meyer
There's a line at the end of the paper that says, quote, green spending channeled through private firms alone is unlikely to build ground up coalitions for climate policy, unquote. And I guess one follow up to that would be maybe public sector spending could build ground up coalitions. But my takeaway broadly from our conversation, and you should tell me if you disagree, but my takeaway broadly from our conversation is maybe industrial development, period as a goal is just too difficult, requires too much actual bipartisan coordination, and also happens on such long timelines and with such diffuse beneficiaries that it will never quite build up a ground up coalition in the same way. Or at least if it were to build a ground up coalition, it would come more from the sense of workers participants that political support for that economic transformation was organic, that politicians wanted to keep it happening, rather than that politicians had helped create the transformation at the beginning.
- [40:43]
Alexander Gazmarian
I think that's right. What I would say is that the type of investment matters. Right. So think about something like the auto industry. The US Auto industry is going to be in big trouble unless it's able to figure out what to do with EVs.
- [41:00]
Robinson Meyer
Yeah.
- [41:00]
Alexander Gazmarian
The US auto industry is also a place where you actually have some local organizational capacity through groups like the United Auto Workers, to help communicate to workers what these policies, where they're coming from and what they mean for workers. So the set of investments that could help the auto industry compete can both be framed in terms of we need this to make sure China doesn't eat our lunch. And it's also an area where these policies might actually break through to workers. And it might be easier to connect the dots because you have these local intermediaries to help explain what's going on, where they're coming from. And you know, you see this in some other work I've done, I surveying local union leaders in the UAW and you see that they say we need the 45x tax credit. And these local leaders are saying that they can explain to their members on the shop floor this is what this policy means. But in other contexts you don't have those sort of pre existing trusted messengers on the ground that can help communicate these policy benefits. The takeaway is not that investments through firms are, you know, ill advised sort of politically. They might actually for one be just efficient economically. Right. So the tax credit approach is not broken in that sense. We just need to recalibrate our expectations about when they actually could affect politics. And a lot of that's going to depend on local organizational capacity to help the message cut through.
- [42:31]
Robinson Meyer
I want to believe that theory that unions are going to be essential to messaging some of this and that having representation and having organizational structures to communicate these messages to rank and file is really important. And yet I guess I'm struck by the fact that the Biden administration did more to help the IBEW and the U, especially the UAW than a presidential administration had done in a long time. And I agree with you to be clear that the the big three, the US headquartered automakers are really screwed unless they can figure out electric vehicles. And yet it is the UAW that has cheered on the Trump administration repeal of various emissions policies and the Trump administration repeal of these various decarbonization policies because their interests are actually aligned with the big three. And they want the big three to sell more big profitable SUVs because that means, you know, more profit for them too. That creates a bigger pie for them too. And meanwhile it's the non unionized global automakers who have their manufacturing operations in the Southeast that have been the most proactive about taking on the energy transition and building a wide range of EVs and I guess here I'm thinking specifically of Kia and Hyundai who have their own reasons to be competitive. I want to believe that unions are helpful here. Do you think we got evidence of it during the Biden administration or the Trump administration? Or is it just that those voters are like for cultural reasons, for economic reasons, don't see themselves as aligned with voters who want decarbonization policy anymore.
- [44:12]
Alexander Gazmarian
The UAW is an interesting organization because if you look at their 2019 white paper, they come out in support of the set of industrial policies that ultimately look a lot like what's in the inflation Reduction Act. We want to incentivize EV plants, battery plants that use union labor. We want to co locate these next to existing engine plants, things like this right because they have a set of workers who are worried about what the EV transition means for their members. At the same time, the UAW is managing different internal disagreements about how to approach this issue. So this is something that show in other work is that the workers within these big three auto plants and represented by the UAW are not all in the same place. They do different things. Some of them make pistons which will be harmed by the EV transition. Others are in final assembly or less harmed. And when I sort of interviewed their leaders, you can see that they have different preferences about how to approach the EV transition depending on if their workers are harmed or not. So the national UAW is in somewhat of a tricky spot because it has to sort of negotiate across these different interests of their members. And at least when it came to industrial policy, they, they came down at the IRA initially the set of policies will be good. Now they're in a different situation because of tariffs and all these other things. And they are probably trying to extract the best deal they can from the Trump administration for their members. And that might mean short term profits. I mean, look at Stellantis's recent financial report. It was not great. And the union members didn't get their profit sharing checks. So I think they're under some financial pressure and there's a lot of short term thinking that's happening rather than long term thinking, which is just understandable given their situation. I think that local organizational capacity, be it unions, civic leaders, different civic organizations can make a difference. But they need to believe that these policies are going to credibly deliver benefits to the community. They're putting their neck out when they're saying these policies will be good because if they turn out to be repealed or not deliver the benefits, then that's bad for their reputation. So I do think that these groups could make a difference in communicating the policies. But these groups also have members who have a diverse set of political views. So to the extent that these policies are perceived as partisan, it's just going to make it harder for these local messengers to communicate the benefits. This all goes back to sharing the credit, mainstreaming clean energy, making it bipartisan. That will make the life of local organizers much easier in explaining the benefits of these policies and tying them back to the federal government.
- [46:51]
Robinson Meyer
This is the tension at the heart of the whole project, is that it would be great if this were bipartisan. The less this is polarized, the better. And yet, if only Democrats are committed to decarbonization and it's a major priority for them, then how on Earth, do you both get them to advance policies that accomplish these goals when they're in power, while also not polarizing this issue further? It just seems like that is the question that so many of us are dealing with right now who want to see things improve on this issue. And frankly, I do think it's a new problem because up until 2015, climate change had been one of many environmental issues the Democrats wanted to handle. I think it was only in the post2015-2016 moment that this became the supreme environmental issue that they structured all their environmental policy around. And that has actually contributed to its further polarization.
- [47:48]
Alexander Gazmarian
I think that it's possible to design a set of justifications that don't mention climate change that advance these policies like we were talking about. Big three automakers are in trouble if they don't catch up with EVs and you can see bipartisan justification for why to compete with China we need to invest in our auto industry in the same way that China is invested in their industry. And so I think there are arguments like that. And you could think about the same analogous for solar and wind, as we see electricity demand increasing, we need a strategy that encourages affordable, cheap energy to be deployed. And for solar and wind that in many locations that's what it is.
- [48:33]
Robinson Meyer
Grouping all this policy under the headline of economic development may actually make it both more durable and less polarizing and also let you do more cut more emissions in the long term. I think the issue is that, and this is that frankly there's a lot of people who understandably hear that reframe and go, oh, but that means you're actually not going to do anything on climate anymore. Or like that actually means you're giving up on climate. And I think that it's walking that line between depolarizing this issue, framing it as competitiveness policy or economic development policy, while not creating a kind of left flank backlash that says, oh, Democrats don't actually care about climate change anymore. They used to during Biden, they don't even care about that anymore is very tricky. Now you could decide the left flank doesn't matter electorally at all. And maybe that's where we're heading. But if I was a senator from a very blue state, that's what I would worry about.
- [49:34]
Alexander Gazmarian
If you look at the Biden era, policies that survived CHIPS act. Yeah, bipartisan infrastructure law, and these are policies that are framed in this way and you know, it's not automatic. 20 years ago that you might have seen bipartisan alignment on massive industrial policy building semiconductors in the U.S. there have been people who actually would have preferred said free trade is fine, we can just import these chips. So I think we just need to get to the point where we view clean energy technology without saying the words. Clean energy is a horse and buggy moment, right? We're just moving from one old technology to a newer technology that has a host of other benefits in a global economy and that are justified on reasons unrelated to sort of save the planet. We just need to build the economy of the future and being consistent in that messaging. There's a whole other issue how to navigate the Democratic base politics. But what we can at least say from this paper is that the economic benefits that are going to specific communities aren't turning out people to vote. They're not changing their opinions, at least in ways that would then lead them to vote.
- [50:45]
Robinson Meyer
Well, I think that's a great place to leave it. And this has been a great discussion. And thanks so much for joining us on Shipkeep.
- [50:50]
Alexander Gazmarian
Thank you, Rob. It's been a great time.
- [50:57]
Robinson Meyer (Host, Shift Key)
Thanks so much for listening. That will do it for Shift Key this week. We'll be back next week with I think two episodes. I do have to say one thing before I go though, which is I'm not working this week. We actually pre recorded this conversation last week. I'm very happy it's out. And so who knows what will happen this week. And if something crazy happens this week, then we won't cover it on Shift Key. At least we won't cover it till next week. Until then though, Shift Key, the production
- [51:21]
Robinson Meyer
of Heat Map News. Our editors are Gillian Goodman and Nico Orchella.
- [51:24]
Robinson Meyer (Host, Shift Key)
Multimedia and editing and audio engineering is
- [51:26]
Robinson Meyer
by Jacob Lambert and by Nick Woodbury.
- [51:28]
Robinson Meyer (Host, Shift Key)
Our music is by Adam Karmalau. Thanks so much for listening.
- [51:30]
Robinson Meyer
See you next week.