As gas prices rise, the climate movement is in shambles

Climate policy beats a hasty retreat. Here's how it might regroup.

Image by andreas160578 from Pixabay

In the late 2010s, and even into the early 2020s, climate change wonks had high hopes for the next Democratic administration. They believed that they would get substantial policy gains, especially under a Democratic trifecta. Some famously called for a “Green New Deal.”

In early 2021, it seemed like they had gotten their wish⁠. Democrats did win the House, the Senate, and the Presidency. But the need to address COVID-19 came first, and then the Build Back Better agenda, which was to contain a climate component, floundered as it failed to rally the support of some key moderate senators. The bipartisan infrastructure deal included some funding for a network of electric vehicle charging stations, but overall climate wins were meager in 2021.

Then in 2022, the Russian invasion of Ukraine sent energy prices—including gasoline prices—sky-high. That has left the climate movement in shambles.

Developments at all levels of government across the country have shown that the climate movement lacks the popular support to directly attack fossil fuel consumption or even fossil fuel production. Politicians everywhere⁠—even Democratic ones⁠—are moving policy in the precise opposite direction that climate wonks would like.

The climate movement will have to reassess its position, acknowledge at least internally that it is an elite-led cause, and work on providing better alternatives to fossil fuel usage rather than attacking fossil fuels directly.

The motorists’ revolt

The most obvious domestic political consequence of the Ukraine war has been that car users are hopping mad. And sufficiently motivated motorists are a potent political force.

For example, take gas taxes. The ideal solution to carbon emissions, according to most economists, is to tax them. Carbon taxes generate revenue, and you can size them to the estimated harms of emissions. That lets market participants decide how to reduce their emissions most efficiently, rather than mandating specific emissions-reduction technologies by fiat. For a sense of how unified economists are in their love of carbon taxes, take a look at the periodic questions asked of the elite economists on Chicago Booth’s Initiative on Global Markets experts panel. They absolutely love them.

But carbon taxes are unpopular with the general public⁠—especially once it becomes clear that they mean higher gas prices. Some climate advocates, like Dave Roberts of the Volts newsletter, are skeptical of analysis that doesn’t consider political feasibility. Rep. Alexandria Ocasio-Cortez said in 2019 that a carbon tax “could be part of a solution” but is “inadequate as the whole answer.”

“Part of a solution” seems about right. And while no state has an outright carbon tax, many have gas taxes that have some of the same virtues. They are a useful source of revenue, and also double as a kind of congestion tax or user fee on roads.

The last month, though, has made their limits clear. High gas prices create extraordinary pressure to suspend or reduce gas taxes. Liberal states like Connecticut and Maryland (not to mention center-right Georgia) have suspended their gas taxes. More states might follow, given the sheer magnitude of public opinion; tax suspensions poll at +46 in New York.  Even the Sunrise Movement appeared to call for lower gas prices.

Pushing gas prices higher was always a Sisyphean battle for those interested in climate math, but they are unmistakably seeing the boulder roll back downhill.

Another long-run goal for climate activists where they are losing ground is the idea of getting people to use cars less. The extremes of this movement are terrible at politics and strike annoying tones (see, for example, this Gizmodo article titled “Why Cities Should Ban Cars, According to Science.”) But there are also some more pragmatic elements that work on issues like pedestrian safety or adding bus lanes, who really are working to reduce car usage at the margin and encourage other transportation forms in the place of private autos. Their goal might not be to convince the family of four to give up their minivan—but perhaps to make it attractive for a single 30-year-old to live car-free.

However, all anti-car activists⁠—annoying and otherwise⁠—would oppose Gov. Gavin Newsom’s (D-CA) ridiculous proposal for a $400 per car subsidy (up to a maximum of two cars) to help defray gas prices. This applies to people of all incomes and all types of car (even electric) but not to users of alternative means of transit. It’s essentially a universal basic income, except you’re disqualified if you’ve failed to buy a car. The proposal is by no means a done deal, and Newsom is open to negotiation, but it shows how politicians are under deep pressure to embrace car users, not environmentalists. When push comes to shove, it is clear which coalition has the muscle to get its way.

Anti-producer politics have stalled

One potential way for the climate movement to get around the tough politics of taxing fossil fuel consumers is to go after producers instead. And this certainly seemed like a tack Democrats were interested in taking back in 2020.

For example, in a March 2020 debate exchange between then-candidate Joe Biden and Sen. Bernie Sanders (I-VT), Biden forcefully declared: “Number one, no more subsidies for fossil fuel industry. No more drilling on federal lands. No more drilling, including offshore. No ability for the oil industry to continue to drill.” This was then hastily clarified to say no new permits on federal lands, rather than an immediate hard stop.

But by March 2022, there was an unmistakable shift in rhetoric. Today’s Biden White House touts oil production, claims its policies aren’t holding that production back, and even urges companies to make more use of the permits they have:

U.S. oil and gas production is approaching record highs, while thousands of drilling permits on federal lands go unused. Federal policies are not limiting the production of oil and gas. To the contrary, the Biden Administration has been clear that in the short-term, supply must keep up with demand, at home and around the world while we make the shift to a secure clean energy future.  We are one of the world’s largest producers with a strong domestic oil and gas industry. Natural gas production has never been higher, and crude oil production is expected to hit a new high next year.

This statement is extraordinarily far from where 2010s climate Democrats hoped to be by now. Consider this 2014 essay from MSNBC’s Chris Hayes, which argues that climate activists will need to persuade people to leave tens of trillions of dollars worth of oil in the ground.

Eight years later, Democrats are saying take it out faster instead.

And it’s not just rhetoric; it’s also personnel. In 2020, when the first COVID-19 shutdowns had dramatically reduced demand for fossil fuels (and other goods and services), a former Fed official named Sarah Bloom Raskin argued that policymakers should use that crisis as an opportunity of sorts, to pivot away from fossil fuels. If the relief efforts of the Fed and legislators excluded fossil fuels, it would encourage companies to give up on “stranded oil and gas assets that society no longer needs.” Then, presumably, post-COVID-19 we could work on creating more green energy.

This January, President Biden nominated Raskin to be vice chair for supervision at the Federal Reserve—a position that could enable her to put some of these ideas into practice.

This was a fight that at least some Democrats were eager to take on, at least in theory. But other Democrats in the Senate were skeptical. With gas prices rising and a tough vote ahead, Raskin softened her stance in her February confirmation hearing.

Her back-pedaling didn’t save her nomination. After Russia invaded Ukraine, gas prices reached all-time highs, and Sen. Joe Manchin (D-WV), the critical 50th vote for Democrats, announced he would not support her.

“Her previous public statements have failed to satisfactorily address my concerns about the critical importance of financing an all-of-the-above energy policy,” Manchin explained. Raskin withdrew her name from consideration.

What can be done

Some of the climate movement’s most straightforward proposals fail resoundingly when put to a vote.

But the climate movement also has some strengths. The sympathies of elite economists for the carbon tax, for example, are indicative of something broader: the sympathies of high-level policymakers in general. Even when politicians are incentivized to pretend otherwise for the sake of the polls, they often do understand externalities, and they’re staffed up with policy geeks who would like to address them.

This candid assessment of political strengths and weaknesses is sorely lacking. Slow Boring’s Matt Yglesias describes the situation well. The climate movement is full of people who prefer to think of themselves as a grassroots army working against a small cabal of elites, and they need to realize they have this mostly backward.

I think, for ideological reasons, it’s difficult to acknowledge. Left-wing people prefer narratives where the public has the more virtuous side of the argument. But they should embrace the assets they do have⁠—the smart, motivated policy nerds⁠—even if those people aren’t as “grassroots” as the aesthetic commands.

When it comes to specific policy recommendations, I would suggest making the fossil fuel coalition smaller before attacking it directly. And the way you do that is by making its direct alternatives better: subsidizing new technologies that might reduce fossil fuel usage and fast-tracking permitting for green power. As you slice away groups of fossil fuel producers and users, the number of people who would object to more aggressive policies begins to fall.