By and large, climate activists have greeted the Inflation Reduction Act, which passed the Senate on Sunday, as an imperfect but undeniably big victory in the battle against global warming. They are thrilled about the roughly $370 billion it would spend to decarbonize the economy and promote green industries, even though they are frustrated by sections of the bill that will open up more federal lands to oil and gas development, which Democrats were forced to include in order to win the Senate’s all-important swing vote, Joe Manchin.
But some have reacted to the compromise with more fury. The Center for Biological Diversity described those fossil fuel provisions as a “climate suicide pact,” while Greenpeace called them a “slap in the face to the frontline communities, grassroots groups, and activists that made this legislation possible.” (It acknowledged the rest of the bill was “historic.”) On Twitter, a portion of the internet-poisoned left has already written off the legislation as a giveaway to oil and gas interests that will do little to help the climate. That chorus has been led by figures like director Adam McKay, who directed the recent climate jeremiad Don’t Look Up, and his screenwriting partner on the film, former Bernie Sanders aide David Sirota, who recently tweeted:
(Sanders himself also savaged parts of the bill from the Senate floor this weekend, before ultimately supporting it.)
Some of this rage is just kneejerk resentment toward the Democratic Party that’s endemic among the online left, with a dose of algorithm-addled clout-chasing added in for fun. But setting aside the Sirotan histrionics, I think it’s important to recognize that, with the success of the IRA, some of the most dedicated climate activists really have lost a basic philosophical battle over how best to combat climate change. It’s not surprising that some anger is spilling out as a result.
In the end, there are essentially four main ways that a country can cut back on greenhouse gas emissions:
• It can put a price on carbon, using schemes like a carbon tax or cap-and-trade system.
• It can simply force businesses and utilities to emit less via regulations.
• It can try a supply-side approach by shutting down the development of new fossil fuels, in order to increase their costs.
• Or, it can just throw money at the problem by subsidizing cheap renewables so that they take over the market.
Climate groups have tended to advocate for some mix of all these approaches. But the most hardcore corners of the movement are deeply attached to supply-side solutions; they’ve spent years on efforts to keep fossil fuels buried and stop the construction of new oil and gas infrastructure, such as the lengthly battles against the Dakota Access and Keystone XL pipelines as well as efforts to limit fracking. In the process, “keep it in the ground” has become an international rallying cry.
Meanwhile, a whole branch of climate activism is now devoted to the idea that the feds could use financial regulations to bar oil, gas, and coal companies from private capital, in order to stop them from drilling and mining.
The supply-side approach to climate advocacy has always seemed to involve a dose of moralism, a sense that fossil fuels are inherently immoral and ought to be cut off wherever possible. At the same time, it also makes rational sense from the standpoint of activists who are concerned about the ecological and health impacts of oil and gas drilling, especially for poor and minority communities, beyond their pure climate-related dimensions.
And heading into the Biden administration, the oil abolitionists appeared to be notching some significant wins. During his campaign, the president promised to halt new oil and gas leases on federal lands; once in office, he deep-sixed the Keystone pipeline, and nominated financial regulators known for being hawkish on climate.
There has always been one, extremely obvious and critical flaw with the supply-side approach to combating climate change, however: Most people absolutely hate it when gasoline and electricity prices go up, and tend to get angry at politicians who are in power when it happens. If a president says outright he’s going to keep oil and gas in the ground, there is a strong chance that Americans will vote for someone who will promise to take it out of the ground. (And who won’t do much else to deal with the impending climate catastrophe.)
The past year has been a brutal reminder of that point, as the war in Ukraine sent oil and gasoline prices skyrocketing, battering Joe Biden’s approval rating in the process.
Biden’s response to that crisis has been to try and bring every last bit of oil to market he can scrounge. He attempted to jawbone U.S. oil producers into cutting their prices and profits, while signing off on a record release of oil from the U.S. Strategic Petroleum Reserve. In a particularly telling development, the Department of Energy has also launched a plan to buy back 60 million barrels of oil at a later date; the idea is to give energy companies an incentive to drill now by ensuring there will still be demand later. Rather than slash long-term fossil fuel production, the White House is aiming to stabilize it, in order to make vacillating prices at the pump less of political liability.
All of this has marked a bit of a defeat to the supply-side school of climate activism. But with the Inflation Reduction Act, it’s facing an all-out rout. At Manchin’s insistence, the bill would restart lease sales in Alaska and the Gulf Coast that were halted by a federal judge, after Biden decided to offer them after all. More importantly, for the next decade, it would require the Interior Department to make 2 million acres of public land and 60 million acres of federal waters available for oil and gas leases each year as a condition for allowing renewables to be developed on government territory. Biden didn’t exactly follow through on his promise to make public lands off-limits to the oil and gas industry, but the IRA will make absolutely sure no president tries it for the next decade. Meanwhile, in return for Manchin’s vote, Democrats have promised to introduce a permitting reform bill that will make it harder to stop the development of both renewables and fossil fuel infrastructure.
Groups like the Center for Biological Diversity have warned that these lease sales will effectively lock in oil production on federal land for years to come. Analysts have concluded that offering additional leases is unlikely to make a major difference in U.S. oil drilling, most of which happens on privately owned land, and is easily a worthwhile price to pay for the rest of the bill, which would amount to the biggest climate investment in American history. Multiple forecasts have concluded the legislation could roughly double the speed at which the U.S. is reducing its carbon emissions, bringing us reasonably close to the commitments the government made under the Paris climate accords. According to a preliminary study by the think tank Energy Innovation, for each ton of emissions added by its oil and gas provisions, the rest of the bill cuts 24.
For the most part, the bill achieves those reductions by subsidizing clean energy and transport—or, as I put before, throwing money at the problem. This, in the end, has turned out to be the core of Manchin’s approach to fighting climate change; rather than make fossil fuels more expensive, his philosophy has been to make zero-carbon power much, much cheaper, while allowing oil and gas to flow.
In some ways, this is as much a rebuke to Washington’s technocratic class as it is to climate activists; the biggest names in economics, for instance, have in recent years all rallied around carbon taxes as the most cost-effective and efficient ways to combat climate change, even as they’ve fallen out of public favor. It also has some obvious downsides of its own; subsidizing solar and wind costs money, whereas something like a carbon tax and dividend scheme—where revenue raised by the levy is sent back to taxpayers—is basically free.
But what Manchinism has going for it, perhaps above all else, is political palatability. The Inflation Reduction Act hasn’t aroused much opposition from industry, because it offers mostly carrots and few sticks. (Exxon’s CEO is perfectly happy with the legislation, as are most power companies.) And it’s been difficult for Republicans to attack, because the legislation doesn’t ask voters to make sacrifices. Instead, it does things like lower electricity costs by pouring money into renewables, giving Democrats a kitchen-table win to brag about at a moment of high inflation. For better or worse, it’s a lot easier to sell that sort of climate bill than it is to convince people that they should pay more to fill up their SUV.