Clean Energy Executives Worry Democrats Have Abandoned Them

Source: By Leslie Kaufman, Bloomberg • Posted: Monday, June 15, 2020

The party leadership says relief is coming, but within the industry, hope is beginning to wane.

U.S. House Speaker Nancy Pelosi departs from a news conference on Capitol Hill on April 21, 2020. 

U.S. House Speaker Nancy Pelosi departs from a news conference on Capitol Hill on April 21, 2020.  Photographer: Sarah Silbiger/Bloomberg

When the U.S. Congress passed a $2.2 trillion stimulus package back in late-March without a cent devoted to green industries, clean energy companies were understanding. Although they’d lost more than 100,000 jobs by that point, on their way to more than 600,000 by the end of May according to industry estimates, it made sense that lawmakers would have to address the immediate public health crisis before they could start thinking about an economic recovery.

It was when the Democratically controlled House passed another $3 trillion stimulus bill in mid-May with no major green energy provisions that the industry started to get concerned. Executives and lobbyists had learned to expect climate skepticism, even denialism from Republicans. But the brushoff from the chamber led by Nancy Pelosi, a California Democrat, stung. Many now quietly worry that the House Speaker—whose to-do list also includes addressing police violence and civil unrest, dealing with the public health consequences of Covid-19, and the looming election—will let this once in a lifetime opportunity to transition to a carbon neutral economy slip away.

As one renewable energy executive who’s been privy to negotiations with the Speaker put it: “At some point the federal government has to stop writing checks.”

Indeed, while the Trump administration has been keen to try get the economy back on its feet with more stimulus, Republican Senate Majority Leader Mitch McConnell said at the end of May that he only wanted to pass one more stimulus measure, and that it should be smaller and more targeted than the last one. The next bill may be the renewables industry’s last chance to secure government relief. But it also might be true that its best chances are already in the past.

Read More: The Senate’s Stimulus Bill Is Full of Disappointments for Climate Advocates

In 2009, with the nation in the midst of its deepest recession since the Great Depression, the U.S. Congress passed two relief bills. The first was a $700 billion lifeline for the banking industry. The second, the American Recovery and Reinvestment Act, delivered an $840 billion capital infusion into the economy at large, including $90 billion for renewable energy and other climate-friendly businesses. That investment has been credited with driving a rapid expansion in the sector, led by federal loan recipients such as Tesla Inc., and the creation of 3.4 million jobs.

“The 2009 bill was the biggest green energy bill ever at that time and really ever since. Period,” says Joel Jaeger, a researcher at the World Resources Institute who’s been tracking stimulus packages across the globe. “The U.S. was at the forefront. But today it is bringing up the rear.”

Then Democrats had both chambers of Congress and a new president focused on energy innovation. Now Democrats have only the House and a president who’s a climate change skeptic.

The CARES Act, which passed in late-March—following two other emergency funding bills for vaccine research, free testing, and emergency paid leave, among other things—not only had no direct funding for renewable industries, it allowed polluting companies such as airlines to access billions in loans with no requirements that they shrink their carbon footprint.

Fossil fuel companies especially benefited from a provision in the legislation that loosened rules on how companies deduct operating losses. Analysis by Bloomberg News show that 37 oil companies swiftly claimed at least $1.9 billion in tax breaks under the CARES Act, leading Jesse Coleman of tax watchdog group Documented to call the measure a “stealth bailout for the oil and gas industry.”

As the bill worked its way through Congress, conservative critics accused Democrats of trying to exploit the urgent need for coronavirus relief to foist an environmental agenda on a wounded country. Since then, Republicans have insinuated without evidence that legislation to constrain carbon will idle factories and slow down the economy, just like Covid-19.

Democrats’ progress on this issue is also hindered by divisions in their own ranks. Left-leaning members of the party have clashed with Pelosi on climate before: In November 2018, then Representative-Elect Alexandria Ocasio-Cortez joined a group of 150 young climate activists from the Sunshine Movement in staging a sit-in at the Speaker’s office to demand more action on climate change.

Pelosi has given mixed messages on where climate ranks on her list of legislative priorities. After the sit-in she praised the young activists for their leadership and added that the climate crisis “threatens the health, economic security and futures of all our communities.” Yet she took a much less amiable tone on May 11 of this year, during a call her office organized with roughly 100 clean tech leaders. Jigar Shah, cofounder of clean energy investment company Generate Capital and an outspoken detractor of Democrats’ hesitance on climate change, says they were told that there probably wasn’t any support coming until the fall, and maybe not until after the election.

“She was very clear that none of our stuff is being prioritized,” he says. Shah speculates that Pelosi is steering away from clean energy because she’s worried about tarring vulnerable members in swing states by association with the politically fractious Green New Deal, a non-binding resolution put forward in February 2019 by Ocasio-Cortez and Massachusetts Senator Ed Markey that set a goal of shifting the U.S. to 100% “clean, renewable, and zero-emission energy” within 10 years. Most of the 100 or so Democrats who supported the resolution are from overwhelmingly Democratic districts and are therefore assumed to be safe at the ballot box.

“If you read the $3 trillion bill, it’s built around the constituents of the Democratic challengers for Republican seats,” Shah says. “I get it, and it’s totally savvy on the Speaker’s side. But our industry is on its back and needs support, and it would be a travesty to wait until November.”

Those close to the Democratic leader insist that Pelosi isn’t afraid to be painted green, but rather wants to stay focused on addressing the immediate effects of the pandemic by supporting state and local governments and heath care workers. Representatives from the Speaker’s office declined to comment on the record, but a senior Democratic aide says an upcoming infrastructure bill will have strong support for green and resilient infrastructure, and also points out that clean energy businesses are eligible for loan programs under the CARES Act.

John Rowley, a Democratic consultant working on a pair of tight congressional races, says voters aren’t paying enough attention yet to fall races for campaign staff to know whether the environment will be a big concern. But he doubts that association with green legislation will hurt anyone.

“Republicans have not won a race on Green New Deal,” he says. “There is a big difference from Fox News talking points and persuadable voter values. Just because the extreme right wing can make the tenuous connection doesn’t not believe voters will find it credible.”

The lack of any green targets in U.S. stimulus legislation stands in stark contrast to other countries. The European Commission wants member states to make sure the €750 billion economic recovery package is spent in initiatives that don’t harm the bloc’s ambition to become carbon neutral by 2050. In Canada, coronavirus loan recipients have to report their climate-related financial risk annually. Even countries with much smaller economies such as Pakistan are investing in green initiatives such as planting trees.

Meanwhile, many renewable energy executives and their allies in Congress continue to believe relief is coming soon. “It is disappointing it was left out this last round,” admits Rep. Jared Huffman, Democrat of California. “But I think there is an assumption this goes into the infrastructure piece which will still come later.”

Members have made various bids to spur the House into action. In early June, Peter DeFazio, Democrat of Oregon, introduced a $494 billion transportation bill to tackle a backlog of repairs on bridges and mass transit and to build climate change-resilient infrastructure. Around the same time, a couple dozen representatives and senators including Huffman signed a public letter asking Democratic leadership in both houses to take swift action on climate change. Senator Minority Leader Chuck Schumer said he supports including assistance for clean energy in future stimulus bills.

Sean McElwee, co-founder of progressive finance think tank Data for Progress, thinks such a bill isn’t necessarily dead until November and insists Pelosi is measuring the national mood closely.

“Voters are still in a ‘tackle the corona virus’ mode and less into a ‘rebuild the country’ type mode,” he says. He’s confident that if—or when—the mood shifts, renewable energy will be part of the conversation. “We have some optimism,” he adds. “Once we see evidence of change, then we will litigate the case.”