• Home
  • Memo to Climate Skeptics: You’re Losing, Change Strategies

Memo to Climate Skeptics: You’re Losing, Change Strategies

William L. Kovacs

December 2023

Memo to Climate Skeptics: You’re Losing, Change Strategies

(Part I of III parts)

As 90,000 corporate and environmental elites land their private planes in Dubai to be exquisitely wined and dined at the UN Climate Conference (“COP 28”) from November 30 to December 12, 2023, they will be demanding more reductions in fossil fuels and trillions more dollars for whatever controls they want to impose on humanity. Their newest demand is no more cows, no more meat. This is on top of restrictions on thousands of products. Twenty-eight years of COP parties demonstrate the persistence of the movement to shut down human progress. Those opposing this insanity argue the facts, science, and common sense. These are useless arguments in a world where tweets, influencers, money, and misinformation rule. It is time to challenge this brave new world of hypocrites at its source of power.

The Progressive Left is winning the climate war it should be losing.

Those skeptical (“climate skeptics”) of the Progressive Left’s claim that the world is coming to an end due to manmade greenhouse gas emissions are a dwindling group. They are fighting the good fight with few supporters and little financial assistance. To prevail, the skeptics need to gain visible support from common-sense citizens who are unwittingly impacted by the increased costs of green technology. To achieve this feat, climate skeptics should move away from their current lobbying strategy that relies on well-documented science and technology briefing papers that discuss the technical inadequacies of the green agenda and focus on the adverse economic and community impacts of the Biden administration’s policies.

The transition from regulatory oppression to costly giveaways.

The Progressive Left’s change in its climate lobbying strategy between the Obama and Biden administrations illustrates why the Progressive Left is winning the climate fight to limit fossil fuels to “stop the rise of the oceans.”  While both administrations initiated aggressive attacks on the use of fossil fuels, their strategies are radically different. Obama went the traditional route of complex legislation to regulate most industries in the economy. The Biden administration gives away lots of money, which makes all the difference.

The climate skeptics in 2008-2016 organized the business community and used data in eye-catching, easy to understand charts to illustrate the complexity, costs and burdens of Obama’s legislative and regulatory agenda on business and citizens. By explaining how business, jobs, citizens, and communities were adversely impacted, the skeptics defeated Obama’s major proposals in Congress, even in years when Democrats controlled both Houses of Congress.

The Biden administration changed strategies in 2021. It recognized giving away taxpayer money is a proven path to the heart of the business community. Giving away money for a “public purpose” is also unreviewable by the courts. As such, it is easier for spending legislation to pass. Moreover, it also avoids a regulatory conflict with industry, as happened to Obama’s Clean Power Plan. Using giveaways, Biden enacted the Inflation Reduction Act (“IRA”) to build more green technology than can be absorbed by the grid or afforded by consumers. Additionally, by placing such a massive amount of green technology into the economy, Biden makes reversing his policies very difficult.

Beginning in 2021, climate skeptics challenged Biden’s climate agenda by developing excellent policy papers explaining the technological flaws in achieving zero emissions with green technology. Unfortunately, for the climate skeptics, business prefers subsidies over well-reasoned technical reports that might upset their gravy train., Moreover, most common-sense citizens do not read technical policy papers, nor are they persuaded by them.

American business is Congress’ Pavlov’s dog, and tax credits are its treats.

With a massive national debt approaching $34 trillion and annual combined deficits and interest payments approaching $2 trillion, Congress fails to understand how it is wasting the taxpayer’s money. Worse, when it spends by enacting tax expenditures, it has no control over how much is wasted.

Tax expenditures are defined by law as “revenue losses attributable to provisions of the Federal Tax laws which allow a special exclusion, exemption, or deduction from gross income or which provide a special credit, a preferential rate of tax, or a deferral of tax liabilities.” When Congress enacts these expenditures, it creates public policy by changing behavior, i.e., rewarding corporations that do what the government wants done. It transforms American businesses from defenders of competitive markets into the government’s Pavlov dog. The government offers a treat, and business gets rewarded if it does what Congress wants done.

Unlike policy determinations that must be authorized and subsequently funded by Congress, tax expenditures are not viewed as direct spending programs since Congress places them outside of the budget process. As such, they are an unlimited charge on the federal treasury since anyone who conforms to the government’s desires gets credits that reduce their income tax. For example, taxpayers purchasing an electric vehicle can receive up to $7,500 in credits to reduce their federal income taxes.

Additionally, the IRA includes a $ 400 billion loan guarantee fund that allows green energy developers to secure lower interest rates on loans that the federal government guarantees in case of default. These unfunded liabilities are also off budget.

The cost of dog treats is expensive.

The IRA gives tax credits for activities legislatively deemed to reduce emissions causing climate change. Those activities include battery storage, energy efficiency, residential green energy, hydrogen, carbon capture, solar and wind generation, and electric vehicles. The Congressional Budget Office (“CBO”) initially estimated these tax credits would cost the treasury $391 billion between 2022 and 2031.

The IRA tax credits for anything “green” incentivized more pigs to show up at the trough than CBO estimated. Within months after the program started, Goldman Sachs raised its estimated cost of the credits to $1.2 trillion for the same period. The original forecast missed the cost of the credits for electric vehicles by $379 billion; energy manufacturing, $156 billion; renewable electricity production, $82 billion; energy efficiency, $42 billion; hydrogen, $36 billion; biofuels, $34 billion; and carbon capture, $31 billion.

These federal tax credits create few jobs. “Total [cost for each green job created] range from $ 2 to $ 7 million per job.” Unfortunately, the jobs created will have an average annual wage of $45,000. Where have all the billions gone? Into corporate pockets everywhere!

Tax credits are only one type of government gift. The tax code is stuffed with over 2000 subsidy [gift] programs. Companies that receive the gifts are given a competitive advantage over non-recipients in the market. Farming is an excellent example. The federal government distributes $30 billion a year in subsidies to the farm industry. “The largest 15 percent of the farm businesses receive 85 percent of the total farm subsidies.”

The Center on Budget and Policy Priorities estimates that in 2019, IRS tax expenditures carried a value of $1.3 trillion for the recipients. Additionally, the IRA tax credit adds another $1.2 trillion. None of these $2.5 trillion tax credits is part of the appropriations process. No wonder Congress cannot control spending. These same companies also received $3.5 trillion in subsidies in 2020 from state and local governments.

As long as green technology is infused with unlimited tax credits, businesses will take the credits until the government stops giving them or the project suffers losses the government will not cover. It is up to the skeptics to educate the public on these costs.

William L. Kovacs has served as senior vice president for the U.S. Chamber of Commerce, chief counsel to a congressional committee, chairman of a state environmental board, and a partner in law D.C. law firms. His book Reform the Kakistocracy received the 2021 Independent Press Award for Political/Social Change. Kovacs also led the business coalition’s lobbying activities against Obama’s legislative climate proposals. He can be contacted at [email protected].