Domestic Policy, Environment, Uncategorized

Climate Change Realism

The debate over climate change policy has historically been dominated by globalist proposals that impose a crushing socioeconomic burden on the United States and weaken us by endangering our energy reliability.  Meanwhile, China, Russia, and the developing countries of the global south would continue to prioritize strengthening their economies and national power even at the cost shamelessly increasing their carbon emissions. As I discussed in this post, the American nationalist approach of Theodore Roosevelt would balance environmental responsibility, national security, and economic fairness to achieve realistic carbon reductions as well as the necessary adaptations to the changing climate.

The (unfortunately misnamed) Inflation Reduction Act recently negotiated by Sen. Joe Manchin and Democratic Senate leadership is a step in the right direction despite its various flaws. It appropriates $380 billion over ten years to spur production and installation of clean energy technology,  as opposed to the original budget-busting $1.78 trillion of President Biden’s Build Back Better proposal. At the same time, it contains tax credits for nuclear power and clean hydrogen.  It also recognizes that oil and gas must remain part of the energy mix for now by opening up off-shore and federal lands for drilling (for an in-the-weeds analysis of the energy provisions, see this link to one law firm’s analysis).

There is, however, a cost.  To be at least deficit-neutral, it primarily relies on the following revenue and tax increases:

Authorizing Medicare to negotiate and purchase certain prescription drugs in bulk for Medicare drug plans

Creating a 15% minimum corporate income tax

Strengthening IRS enforcement efforts

Imposing a new fee on excess emissions of methane from oil and gas facilities

Tightening the loophole that taxes investment manager’s income at capital gains rates instead of ordinary income rates.

All of these are welcome changes in tax and spending policy in and of themselves. The Committee for a Responsible Federal Budget estimates the legislation will result in a small 155 billion reduction in the budget deficit over the next ten years.  

The bill could have been better in two ways.  While it imposes domestic content and prevailing wage requirements on clean energy producers, a more robust tariff to support domestic producers and prevent Chinese predatory pricing should have been added. As even the New York Times admits, the bill also allocates far too little to expanding and modernizing the transmission grid to support large scale energy projects so important to achieving energy reliability. Indeed, it seems to favor rooftop solar and other forms of distributed generation over central generation such as nuclear and gas-fired generation and wind farms that provide crucial backup generation.  The Biden Administration has promised Sen. Manchin that the permitting process for such projects will be streamlined to encourage transmission projects in future legislation. 

Nevertheless, the bill meets Roosevelt’s sobering realism expressed above by beginning the process of reducing carbon emissions here at home, but not at the price of economic dislocation or strategic weakness.  Much more needs to be done, especially in the realm of climate adaptation.  However, America would retain the leadership in environmental stewardship that TR established while refraining from sacrificing its strength.  This is the kind of national responsibility he would have enthusiastically supported.

Foreign Policy

Ukraine – The War within American Foreign Policy

Source: Adobe Stock

Joe Biden arrived in Washington promising a plethora of conflicting foreign policy goals. Much was made of a new “foreign policy for the middle class”, which appeared to be a rejection of the old liberal hegemonic model of his predecessors Bush and Obama. Yet Biden also claimed “America is back” to being an international leader throughout the world.  Climate change also was supposedly a driver, as well as the old Obama Administration “pivot toward Asia”.   These priorities have now been eclipsed by the Russian invasion of Ukraine and the Administration’s stated goal of weakening Russia. If Ukraine and Europe remain the top priority, this new priority will prevent any real progress on any other foreign policy goals.

The administration’s focus on defeating Russia in Ukraine conflicts with the rest of the world’s more pressing priority of ending the war as soon as possible.  For developing nations, the war is causing a hunger crisis that threatens their people’s lives and national stability. Russia and Ukraine supply 28% of the world’s wheat exports, 29% of barley and 15% of maize.  They are also leading exporters of potash and fertilizer, which allows other nations to grow their own food. Ukraine itself provides the calories necessary to feed 400 million people (see the recent leader in The Economist magazine “The Coming Food Catastrophe”). In response, India and other nations are embargoing the export of domestically grown wheat and other foodstuffs in a move reminiscent of protectionist measures taken during the early months of the COVID-19 pandemic.

Moreover, the call to uphold the international rule of order rings hollow with nations that experienced invasion and conquest by western nations in the past.  Whether it is China, India or other countries, they remember their colonial past and do not believe that they should sacrifice trade and other relations with Russia for a far-away conflict.  As I mentioned in this previous post, their past has made them the ultimate realists dedicated to preserving and building their own sovereignty against more direct threats. 

President Biden’s Russia-Ukraine myopia also weakens the effort to respond to more direct challenges. Japan, India, Indonesia and Southeast Asia nations are more concerned about the threat from China than Russia. They are undoubtedly wondering if the vaunted pivot to Asia has now turned 180 degrees towards Europe.  Latin America also needs our attention and is equally unconcerned about Ukraine. Indeed, Russia has threatened another Cuban missile crisis by proposing to station military assets with fellow anti-American authoritarian regimes in Cuba and Venezuela.  A policy centered on Ukraine may thus result in a direct strategic threat to the American homeland.

Washington’s obsession about Ukraine thus endangers its ability to achieve other critical foreign policy objectives. It makes it more difficult to recruit developing countries to fight climate change and protect America from real national security threats. Something will have to give. At this point, the climate change agenda is most at risk.  The only other way to accomplish all of these objectives is to paper them over with billions of American budgetary dollars.  Russia’s invasion highlights the need for increased domestic commitment on the American home front, but a spending spree of that scale currently lacks any real American public support and could endanger our own economic goals. If the Administration wants to take that road, it must prepare the American people to make significant sacrifices in taxes, spending and domestic policy.  The choices this may entail will be the subject of the next article in this series.  

Foreign Policy, New Nationalism News

New Nationalism News

August 24, 2021

This edition will focus on the Afghanistan withdrawal – both how we got here and the potential problem it creates for the clean energy industry.

The Sad History of the Afghan war over Four Presidencies

This story tells how a war with the clear objective of capturing or killing the perpetrators of the 9/11 attacks morphed into a futile nation-building exercise and then a losing quagmire.

Bush, Obama, Trump, Biden: How four presidents created today’s Afghanistan mess – CNNPolitics

What the Taliban were telling us when we listened

A US Air Force intelligence officer assigned to monitor Taliban communications in support of our troops wrote both an inspiring and sobering account of what he learned about them and Afghanistan during his tours of duty. We are all lucky to have military members with the dedication, skill and courage this author showed during his service there.

What I Learned While Eavesdropping on the Taliban – The Atlantic

The Crisis for Clean Energy

The Taliban inherit mineral wealth worth trillions of dollars. In particular, Afghanistan has been called the Saudi Arabia of lithium, an essential element of batteries and other renewable energy sources. We may have to accept the Taliban and their radical Islam in order to meet the ambitious clean energy goals of the Biden Administration.  Otherwise, China and Russia will end up controlling the lithium reserves and require us to buy from them, endangering our broader national security. 

Under the Taliban, what will happen to Afghanistan’s minerals? — Quartz (qz.com)