Back in autumn 2019, when COVID was still just a twinkle in Satan’s eye, the world was already hurtling toward crisis. The Arctic Sea ice was historically minimal, and global temperatures historically high. “Once in a lifetime” storms were devastating the Caribbean every year, while wildfires gave the West Coast an annual taste of hell on Earth. The latest IPCC report read like extremely dry and dystopian work of hard sci-fi. The world’s most powerful nation appeared hell-bent on expediting the ecological eschaton. And Adam Tooze, the great historian of global calamities, was working on a book about how all this came to be.
Then, history intervened. Tooze turned his attention to the pandemic, embarking on an account of the COVID era’s economic upheavals. Meanwhile, in the United States, epidemiological and political crises took precedence over the climatic one.
But now, like a ne’er-do-well car-accident victim waking from a coma, America is emerging from an acute disaster, only to reenter the slow-motion catastrophe it calls normal life. Shots are in arms and a Democrat is in the White House — but the climate crisis is ever-deepening, and U.S. decarbonization efforts remain lacking.
To get caught up on where the pandemic has left global climate politics, Intelligencer turned to Tooze last week. We spoke about his criticisms of Joe Biden’s infrastructure plan, the rise of green conservatism in Europe, how California environmentalists ruined the Porsche, and whether enlightened capital will save us all, among other things.
How have the prospects for a green transition changed since the last time we spoke? What are the most promising developments, and what are the most dispiriting?
There are three big players in the climate equation: China, Europe, and the United States. And on all three fronts, broadly speaking, the momentum has been in the right direction. Xi made his momentous announcement to the United Nations in September, pledging to achieve carbon neutrality by 2060. Now, obviously everything hinges on what China will actually deliver. And, as we’ve discussed previously, China has politics, too.
In Europe, the emissions-trading system — the carbon-pricing system that the Europeans laboriously established 15 years ago — had long been a laughingstock in climate circles. They managed to introduce these emissions certificates, but these were initially too abundant to have much value. But that’s now changed. We’re now up to a price of 50 euros per ton of emissions. That’s the stuff of fantasy, when judged by the standards of America’s carbon-pricing debate.
Meanwhile, the German constitutional court slapped the German government for the inadequacy of its commitments. Basically, the court found that intergenerational equity requires the German government to speed up its decarbonization program, because otherwise, they’re backloading all of the expensive stuff, which would be at the private cost of the youthful litigants who brought the suit.
So those are the dynamic elements in the equation in Asia and Europe. On the U.S. front, of course, the single most important thing that happened is that Trump didn’t win. And we now have an administration that is committed, I believe, to addressing the climate problem, to mainstreaming that problem. This is their mantra. Climate is everywhere in their policies. And then the Democrats won a congressional majority, and they have control of the Senate, albeit by the skin of their teeth. So things could have been much worse from the U.S. side.
But they could be much better?
The situation in the U.S. isn’t heartbreaking or depressing. But the past few months have provided a grim lesson in the realities of American politics. The infrastructure-spending program launched by the Biden administration is sobering in its modesty. They are ticking all the right boxes. They appear to have all of the right labels on everything. But the scale of the investment spending is just too small to be, in and of itself, a credible commitment to a decarbonization.
If one treats them as good-faith actors, then one has to conclude that they have other things up their sleeve. And the most important thing is clearly some sort of regulatory intervention. Which will require rather contentious legislation to force decarbonization on the electricity utility system, or else administrative measures that will amount to the same thing, which will then be contested in the courts.
And the puzzle, from a European perspective, is where is carbon pricing? Where is carbon taxing in this model? And it’s nowhere! Not directly, not explicitly. There are different ways of getting to shadow carbon prices through internal administrative measures, but it’s not the same as a comprehensive carbon-pricing regime. No one has one of those, even the European system is full of holes as well. But it’s far more comprehensive than anything Biden has proposed.
And there is no credible model of a green transition that doesn’t involve carbon pricing. Maybe the Biden administration’s idea is to get there in due course, but it’s not upfront. And I think we know why. The politics of carbon taxation and pricing in the U.S. are bad, on both sides of the political spectrum. It’s not popular on the left, and it will be demonized by the right.
So, I think that the balance of the last nine months is positive. All three of the big blocs are moving in the right direction. But when we actually come face-to-face with the limits of what Washington can do, there’s nothing there that leads one to be particularly optimistic about the pace of decarbonization, at least in the U.S.
I’m curious about how much agency you believe the Biden administration has in setting or expanding those limits. In your recent writing, you alternate a bit between describing Washington’s political constraints as fixed, and suggesting that the White House could ease them with a different strategy. So, for example, in an essay for The New Statesman, you seem to attribute the inadequate size of the president’s program to his insistence on paying for it with corporate tax hikes, which are “bound to face howls of protest from big business.” I’m sympathetic to this analysis, but not entirely convinced by it. For one thing, Joe Manchin and a few other Senate Democrats seem to be earnestly concerned about the national debt. For another, if Biden did pursue large, unfunded climate spending —concentrated in the near term — that would seemingly inspire howls of protest from some financial quarters over inflationary risk (if the response to last month’s CPI numbers is any guide).
I agree that there is ambiguity here. It also reflects, I think, the fact that we’re all figuring out the Biden administration as we go along. I think you identify several key elements. You have the fear of inflation. You have the sectional interests pushing back. You have the working hypotheses of key political players, which is, “I can’t win in West Virginia unless I am hawkish on the deficit.” Whether Manchin could, or he couldn’t, we don’t know. But his working hypothesis is that he can’t. Then we have, as it were, all of that then reflected in the minds of the people in the Biden administration, who themselves are trying to square these different constraints.
I thought it was very striking when Larry Summers weighed in on the inflation issue. The first response of the wonks in the administration was toargue with him about the output gap. But then the message became more forthrightly political. It became, “The precise size of the output gap isn’t what we care about. We care about passing legislation that’s big, and that delivers for the following constituencies.” So there’s an element of uncertainty about their thinking.
If there’s one thing that’s absolutely clear, however, it’s that going large on climate is not obviously a vote-winning strategy. It will not obviously carry you over the crucial hurdles in the midterms in 2022. And frankly, I think that clearing those hurdles should be the all-deciding factor in Biden’s calculus. Not losing in 2022 must be the top priority. Because if they do lose, then that solidifies the Trumpian turn in the GOP. And 2024 looks even more terrifying than before.
I feel like there’s a tension between your call for Democrats to prioritize political expediency and your alarm over their climate plan’s inadequacies. In March, you praised Biden’s COVID stimulus specifically for its crass political logic, describing it as a “vigorous and well-conceived bid to break the desperate cycle of Democratic presidential victories and midterm defeats.” Of course, on the question of stimulus, for a left-liberal Keynesian like yourself, the dictates of crass politics and good policy are almost perfectly aligned: Putting cash in Americans’ bank accounts aids the macroeconomy and the president’s popularity. As you say, that’s not necessarily the case on climate.
Yes. This is a fundamental difference between the U.S. and Europe. In Germany right now, in the run-up to the election, prompted by the Supreme Court judgment, the parties are in a bidding war over carbon pricing; the Greens said it needed to be something like 63 euros by 2023. And now everyone else is saying, “Yes. Well, we don’t agree with the Greens, but it needs to be higher.” In the U.S., the dynamic is completely different. There, green policy is a concession that the left has to ring out of centrists, as though the climate were some kind of special interest.
I think American provincialism has colored my impression of global climate politics, which, in my mind, are largely defined by the Australian Labor Party’s loss to a pro–coal coalition in 2019 and the Yellow Vest backlash to Macron’s fuel tax. In other words, it looks to me like center-left parties are struggling to advance decarbonization without incurring a backlash from the nationalist right. But it sounds like I’ve been viewing the world through red-white-and-blue-colored glasses.
The first thing an American has to do when evaluating European climate politics is to abandon the notion that green policy is a “center-left” concern. It just isn’t anymore. In Europe, what you have is simply a recognition that this is (a) a huge problem and (b) an opportunity. Of all the different problems facing Europe right now, decarbonization is not the most serious. If you look at the projections, the digital transformation of the labor market is going to be much more disruptive. In other words, the ordinary functioning of technological transformation and creative destruction is far more threatening to your average person than any imaginative, halfway-decent climate program, because decarbonization actually offers blue-collar jobs — lots of them — flexible, complicated blue-collar jobs, which require situational knowledge, deep experience, and are not easily performed by robots.
This is one of the really shocking things I learned by reading the most recent McKinsey study on decarbonization. They say, “Look, yes, there will be some churn — some people will have to retrain — but decarbonization will add more jobs on the whole.” And then they just add as an afterthought, “In fact, all of this pales by comparison with our base scenario for digitalization, which projects labor market disruptions five or six times larger.”
So, climate is the easy problem. The other ones are far more challenging. And I think the European conservatives understand this. Climate looks to them like an opportunity for industrial policy. It’s a way of breaking out of a series of European impasses. And they do perceive it as a way of winning back votes that might otherwise drift towards various brands of populism.
That’s the story in Europe. Decarbonization is just hegemonic common sense. And it’s perceived as a win-win. When it comes to the details, of course, European business interests are just as recalcitrant as everyone else, and they need to be strong-armed in the same ways. When it comes to the details of emissions policy, the German government defends the interest of the German auto industry. But the German auto industry has itself tipped; it sees electric vehicles as the future. So much of European business is all about accelerating green transition and gaining an edge in that area, since the E.U. is terrified by its uncompetitiveness in IT. It’s hopelessly outclassed in the platform economy world, and has only limited elements of a chip supply chain. But on electric vehicles, it might be able to compete.
I would agree, though, that America isn’t exceptional. There is a faction of white-settler-colonial states with “carboniferous” forms of capitalism: Canada, Australia, the United States. Once upon a time, you would have included the U.K. itself, which was, of course, the mothership of the coal-based global economy. But Thatcher won a struggle against the entrenched labor movement within the mining industry. And that had very dramatic and unexpected consequences for political economy in the U.K., which is now a global leader in a kind of corporate, center-right, green-modernizing vision.
“A corporate, green-modernizing vision” sounds like a reasonable description of Biden’s climate agenda, too.
Yes. I actually think that the “Tesla model” is tacit in the administration’s thinking. What they’re gambling on is that some technological breakthroughs will make decarbonization sexy, cheap, attractive, conforming to the American dream. There’ll be an electric Ford F-150. That sort of green politics could actually have some appeal in red states, which have bright futures as green-energy hubs. This is why I find the limits of the investment program so disappointing. You could go large on that strategy, and try to win Missouri or Texas, which materially, should be there for the taking on a green-energy ticket. Texas stands to profit enormously from wind and solar. And a lot of their oil and gas is cheap anyways, so they’ll be in a situation akin to Saudi Arabia. The last oil and gas pumped in the United States will be pumped in Texas. So they win both ways.
Although, the Texas GOP’s response to February’s power crisis seems inconsistent with the idea that the state’s objective material interest in wind power has much bearing on what’s politically viable there.
Yes, they really are pursuing a punitive anti-green agenda. And that deepens the puzzle of the GOP — like, what is their game? And it does lead to the profoundly pessimistic conclusion that they’re bunkering themselves into a minority position from which they can rule through gamesmanship and legal manipulation. But I don’t see the Democrats really challenging the Texas GOP’s position. If you’re going to do a watering-can model — and try to shift state-level politics by delivering green pork to everyone — the program isn’t large enough.
Instead, they seem to have ended up settling on this depressingly familiar, Democratic-centrist theodicy in which enlightened business is going to get you there. You just push. You have the federal government push. You have state governments in enlightened places like California and New York move things in the right direction. And then the Bloombergs and the BlackRocks take it from there. Which is straight Clintonism really.
And it may be the best of the bad deals. It may be the only game in town. It’s got obvious risks and obvious limits. But if [National Economic Council director] Brian Deese believes that corporate America will deliver in the end, then the plan makes sense to me: Everyone can agree on Amazon, so maybe everyone can, in the end, agree on cheap solar power, too. You don’t need to be liberal or conservative. It doesn’t matter what you are, just take the cheap energy.
In a column last year, you gave some credence to the logic of that position: A swift green transition is bad for oil giants like Exxon, but such firms comprise a tiny fraction of the portfolios of major institutional investors. For BlackRock and Vanguard, climate change poses a far greater threat to the long-term performance of their holdings than the swift collapse of the carbon economy. So corporate America has a pecuniary incentive to promote a rapid transition. Doing so would maximize shareholder value. Should we take any comfort in the rough alignment between the long-term interests of human civilization and those of the capitalist class?
This is the fundamental problem in critical social theory going all the way back to the classic period of the 19th century: Who or what is the agent of history? How capable is that agent of rationally pursuing its own interests, or the general interest? And do the two align?
This isn’t the first time these questions have been posed in existential terms. They were previously asked, with regard to the problem of war, in the classic analyses of imperialism offered by Lenin, Bukharin, Trotsky, and Luxembourg, in the period around World War One. That was essentially the problem they were wrangling over: Does the logic of capital lead you to war? Or does it, in fact, lead you to some sort of hyperimperialism that will permanently ensure hegemony?
The problem recurs during the Cold War with the existential threat of nuclear exchange. What’s vexing there is the difficulty of explaining precisely what the rational business interest in nuclear arms could be (beyond the peculiar interests of the military-industrial complex).
To clarify: The problem is how to reconcile the idea of capital as a rational agent of history with events like World War One — which resulted in a catastrophic destruction of wealth — or a nuclear-arms race that threatened all capitalists with annihilation, for the benefit of a small subset of arms manufacturers. Is that right?
And those precedents suggest that enlightened capital isn’t in the driver’s seat; that entrenched interests and interstate competition are more powerful forces?
That’s got to be the fear. What’s so momentous and fascinating about this moment though — in a horrible, morbid kind of way — is that climate change poses this question directly: It’s the ordinary business of capitalist economics that has put humanity at existential risk. The question isn’t complexly mediated, as it was during the Cold War, by the remote connections between the interests of American capital, European capital, and the terrifying threat of mutually assured destruction. Now, the connection is absolutely direct. The question poses itself in a form that goes all the way down to people’s lifestyles. And it’s as large a question as we could possibly face.
What does history tell us? It certainly doesn’t tell us to trust in the agency of enlightened capital. It’s conceivable that, by way of various types of technological fixes (which have previously settled all Malthusian questions), there is, in fact, a way out of this. It’s conceivable that the technological system will provide some easy answer — carbon capture or some other cheap technology we’re not even aware of yet.
But this is what really drives me to distraction: If the plan is “technology will save us,” then show me your technological effort. You would have thought this was the easiest of all possible easy wins. You would simply say to yourself, “Right, okay, we’re going to gamble on the silver bullet. Let’s try hard at the silver bullet.” Then the administration comes out with their grand reveal and it’s $35 billion over eight years. It’s less than Americans spend on dog treats per annum.
Your essay on Biden’s climate plan ends with the assertion, “America is in fact fundamentally [politically] constrained. If the leadership the US aspires to in climate matters is to amount to anything, it should start by recognising that.” In concrete policy terms, what would recognizing our own fundamental constraints involve?
Stop intimidating the Europeans over carbon border adjustment.
That’s Europe’s plan to impose some kind of tax on imports from nations that have no carbon-pricing system?
Yes. When Kerry made his first visit to Europe as envoy for climate, everyone was so excited about an American official traveling to Europe, a non-Trump official. And the single message that Kerry left the Europeans with is, “We’re not down with carbon border adjustment. And we would rather that you backed away from it.”
And from the European point of view, that’s perplexing. Because if you’re serious about carbon pricing, at some point, you’ve got to talk about carbon border adjustment, because otherwise (a) you lose jobs, (b) you lose investment, and (c) you don’t solve the environmental problem, because the dirty stuff just gets relocated somewhere else.
You know, in his first speech as secretary of State, Anthony Blinken had this mind-blowing line. He said, “Like it or not, the world does not organize itself.” And then proceeds from there to explain that if America does not organize the world system there are two possibilities: chaos, or something worse than chaos, which is “Someone else takes our place.” Of course, the idea that the world waits for America to organize it on climate policy could hardly be more remote from the truth.
The world, in fact, has to consistently organize around the problems that America has contributed, and which America’s political system prevents it from seriously addressing. So people of goodwill who are pursuing climate policy in America should start by recognizing that, when it comes to international negotiations, they must not project America’s hobbled, stunted discourse about climate onto everyone else, and constrain other people’s choices.
The carbon border adjustment will barely touch American exports to Europe because America doesn’t export carbon-intensive products to Europe. It shouldn’t be an issue. It’s a complete red herring. Sure, it doesn’t suit America’s agenda, and it is out of step with the way in which America wants to pursue the carbon problem. But America doesn’t actually have a coherent approach to decarbonization, and it should stop pretending that it does. America should understand the game that other people need to play. Other people have constraints, too. And we can’t be in a situation where the profound constraints on America’s scope for action become the limit on what everyone else can do.
Speaking of “everyone else,” our conversation has focused on the U.S. and Europe. But the bulk of emissions over the next century will come from the developing world. That’s where the game will be won or lost. So how can the U.S. and Europe doing their part solve the problem of industrialization in the global South?
It can’t. If there’s any realm in which the provincialization of the West is already manifestly, fatally, existentially, irrevocably true, it’s here. This is why the Green New Deal analogy is so problematic, because the New Deal ushers in World War II, FDR, D-Day, and the Marshall Plan — American triumphalism. And from the beginning of that conversation, I’ve been saying, “You do know, don’t you, that America didn’t win World War II?” The Soviets did. So, to me, the hidden historical assumption is that somebody else will come up with the T-34 of climate change. Somebody else has got to do the ground game. Somebody else has got to do the big work.
This is why I’m so allergic to the pomposity of American leadership pretensions. It’s totally anachronistic. It’s not just disgusting and inappropriate, it’s not just a crime. It’s a mistake. It’s just a misunderstanding of the balance of the world.
So, what can the U.S. can constructively do? Well, it can lead from behind. I think the U.S. could do really valuable work in saying to the Canadians and the Australians and the Brazilians, “Look, we’re all backsliders. We’re all terrible. But if we can do it, you can do it too.” I think nothing more ambitious than that, and that would be huge. A second dimension is technology. Again, this is where, as it were, the screaming inadequacy of the technology budget is just mind-blowing. This should be the preeminent domain in which America expects to lead.
The third dimension is market power. America has considerable sway over the world economy still. It still has the world’s largest economy in terms of dollar-exchange rates. It won’t be for long. But still, it’s very big, and a huge importer. California in the 1970s totally changed the game for global auto manufacturers. I mean, as a European, it was horrifying to watch because, all of a sudden, our beautiful European cars sprouted catalytic converters and ghastly bumper bars to save California children from being killed. It ruined the look of a Porsche. It was just horrible, hideous. But that was when California was leading the world in renewable technology, in smog and anti-smoking measures. So America can play a huge leadership role. Rather than arguing about carbon border adjustments, Europe and America ought to be agreeing to ban the import of internal combustion-engine vehicles.
Finally, a fourth dimension is finance. America is the hub still of the global dollar-backed financial system. Using financial regulation to green American finance — which is behind the global curve — would be huge. Some of America’s big players, like BlackRock, are already involved in the European efforts to green finance. But greening J.P. Morgan would be a huge gift to the world, in the same way that Beijing greening One Belt, One Road would be. So, there are several fronts where you can really hope for U.S. leadership.
But the fundamental thing that all progressives in the West have got to come to terms with is this: Internationalism is not an option. It’s not a favor we do for other people. It’s a favor they do for us. We’re lucky. We could do everything right, and without them, we’d still be completely doomed. We are in the position of the no-longer fully empowered.