The GOP's new wedge issue

From: POLITICO's The Long Game - Tuesday Nov 23,2021 05:03 pm
Nov 23, 2021 View in browser
 
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By Lorraine Woellert, Ben Lefebvre and Ryan Heath

THE BIG IDEA

Wind turbines near Milford, Utah.

Wind turbines near Milford, Utah. | George Frey/Getty Images

THE GOP’S NEXT WEDGE ISSUE — The Republican Party has been branded as a collective of climate deniers and avoiders. It has only itself to blame, but that thinking is starting to shift. Can the change stick in today’s supercharged political environment?

As more businesses, scientists and voters sound the alarm on climate change, a band of Republicans in Congress have come to the table with a message that they’re on board with solutions that are technology-agnostic (think carbon capture), fiscally responsible, and strong on national security. With Democrats, they could help the U.S. deliver on pledges made by President Joe Biden at the U.N. climate summit in Glasgow.

But just as the GOP’s clean-energy champions find their footing, the party’s culture warriors, led by climate change skeptic Donald Trump, are prepping for midterm primary battles that could trip up the effort right out of the gate.

The discord is a symptom of the GOP’s splintered constituencies: Culture warriors who vote in primaries versus chamber-of-commerce types who once were the party’s backbone.

Wind farms, solar installments and green energy are big business, but anything smacking of environmentalism can set off the hippie-punching reflexes of a sizable piece of the primary base, said Mark Jones, a fellow at the Baker Institute at Rice University in Houston.

“Renewables have become a wedge issue, just like mask-wearing and abortion,” Jones said.

Rep. John Curtis (R-Utah), who launched the Conservative Climate Caucus in June, said 2021 has been a tipping point for many Republican lawmakers.

“This is a crisis coming at us at 100 miles an hour,” Curtis told us. “Our silence has been interpreted as not caring.”

Republicans helped pass the Energy Act of 2020, which extended tax breaks for renewables and aims to slash hydrofluorocarbons. The measure won praise from business groups, including the U.S. Chamber, but “none of us went home and bragged in our town hall meetings about what we had just done,” Curtis said.

Translation: Clean-energy Republicans are afraid of their own base.

“It’s almost like a mistress you keep hidden,” said a former Senate aide who requested anonymity to protect relationships on the Hill. “You don’t trot her out and show her off, especially when you talk to the more conservative audiences.”

As business groups have shifted on climate, they need Republicans at the table to pass “consistent, durable policy” that can withstand shifting political winds, said Marty Durbin, president of the U.S. Chamber of Commerce's Global Energy Institute.

“We’ve got to have enough of both sides to have a governing coalition,” Durbin said. “We’ve had too many wave elections in my opinion.”

We’ll leave you with this: A poll from the Chicago Council on Global Affairs found climate change to be one of the country’s most polarizing foreign policy issues. Only 16 percent of Republicans consider it a critical threat, compared to 82 percent of Democrats, according to the August survey. The 66-point difference is the largest gap since the council began asking the question in 2008.

The gap widened because Democrats moved, said Dina Smeltz, a senior fellow at the council. Rank-and-file Republican opinions haven’t changed in years.

“It’s always been a low priority for them,” Smeltz said. So for GOP lawmakers, “there’s no incentive for them to do anything about climate change if their constituents don’t care about it.”

YOU TELL US

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Have a safe and warm holiday, and thanks to Shayna Greene and Jordan Wolman for pitching in this week.

 

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WASHINGTON WATCH

Federal Reserve Chairman Jerome Powell at the White House.

After months of drama, Biden stayed the course. | Susan Walsh/AP Photo

RECKLESS AND FECKLESS — Ouch. Climate activists are NOT happy that Biden has reappointed Jerome Powell to a second term leading the Fed.

Biden has doubled down on “reckless Wall Street deregulation and dangerous dawdling on climate-related threats to the financial system,” said David Arkush, managing director of Public Citizen's Climate Program. “As the 2008 financial crisis showed, fecklessness by financial regulators doesn’t appear terribly dangerous until catastrophe suddenly materializes.”

That’s just a taste of the vitriol, which came fast and furious yesterday. It’s the latest evidence that central banks these days are bigger than monetary policy. Powell & Co. are being asked to address climate change and inequality, among other issues.

Liberal Democrats, Sen. Elizabeth Warren and Rep. Alexandria Ocasio-Cortez among them, want Powell to more aggressively push banks to prepare for climate risk.

To be fair , the Fed has moved on climate change in the past year, naming it a potential threat to the stability of the financial system. The central bank under Powell also joined a global network of central banks collaborating on how to approach the problem.

The Fed chief also has won praise from progressives for keeping interest rates at rock-bottom levels, a policy that benefits lower-income workers, even amid signs of inflation. It’s a historic shift that has long led liberal wish lists.

Monday’s outcry won’t prevent Powell’s confirmation, as our Victoria Guida reports. He has strong relationships with members of Congress on both sides of the aisle.

Sustainable Finance

GREENING CAPITAL — Even securities regulators are fretting about greenwashing. The International Organization of Securities Commissions, in a report Tuesday, called for more scrutiny of ESG raters and data providers.

IOSCO has a long list of worries . The industry isn’t aligned on definitions, what to measure, or how to measure. Conflicts of interest aren’t always apparent or disclosed. Large public companies tend to get more attention than private and smaller players. Asia-Pacific-based companies get less coverage than those in Europe and the Americas.

The largely unregulated industry raises concerns about risk to investors and markets. Mistakes could lead to “greenwashing or misallocation of assets” and, ultimately, a lack of market trust in ESG.

Keep this in mind: ESG data providers have rapidly consolidated, lining up under a handful of global players, including Morningstar, S&P Global, and Moody’s Corp. The market could reach $1 billion this year and notch annual growth of 20 percent in the near term.

BOSTON JOINS HARVARD — No, seriously. Boston Mayor Michelle Wu on Monday signed a measure to divest city funds from fossil fuels, adding Beantown to a growing list of U.S. cities. It’s Wu’s first bill-signing since being sworn into office after running on a Green New Deal platform.

The ordinance prohibits public investment in companies that derive more than 15 percent of their revenue from fossil fuels or fossil fuel products. In Boston, that amounts to roughly $65 million in city investments. The Boston Globe has the full story , and you can catch up on the big picture here.

HOW DO THEY SLEEP AT NIGHT? ― Climate disasters are top of mind for insurers these days. BlackRock’s annual survey of the industry found that 95 percent of respondents said climate risk will have a significant impact on how they construct their portfolios in the next two years. That figure has doubled since a 2015 survey. And 42 percent said they had rejected an investment opportunity because of ESG concerns, up from 32 percent last year.

AROUND THE WORLD

WATER FOR SOLAR― The U.S., United Arab Emirates, Jordan and Israel on Monday signed a regional water-for-solar deal. The UAE agreed to finance a solar project in Jordan that will export 600 megawatts of power to Israel. In exchange, Israel will consider the export of up to 200 million cubic meters of freshwater, the country’s energy ministry said.

White House climate envoy John Kerry was at the signing ceremony in Dubai.

WHAT WE'RE CLICKING

Elk crossing Granite Creek in Bridger-Teton National Forest.

Migratory elk in the Bridger-Teton National Forest. | Gregory Nickerson/Wyoming Migration Initiative, University of Wyoming via AP

— Every spring, millions of elk, pronghorn, and other animals journey from their winter grounds to more lush summer habitat. But their ancient routes these days can cross roads and highways, a lose-lose for motorists and wildlife. The bipartisan infrastructure bill is coming to the rescue. Pew has more.

NASA will slam a spacecraft into an asteroid in a pioneering attempt to nudge the rock off course. The yearlong mission set to begin Nov. 24 is raising a question: whose job is it to defend the planet against space rocks? POLITICO’s Bryan Bender looks for the truth out there.

 

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