2022 will go down as a year of many firsts for climate politics. The world’s largest historical emitter made its first real effort at dealing with the climate crisis while climate action played a central role in elections in countries like Brazil and Australia.
That also means that big money is playing a crucial new role in how those climate policies are rolled out, if at all.
One overlooked reason why the Inflation Reduction Act passed was the intervention of a handful of billionaires, led most publicly by Bill Gates, in persuading Senator Joe Manchin to vote for the bill. Consequently, these billionaires played an outsized role in shaping the most transformative climate policies enacted at the federal level to date.
Take the example of Andrew Forrest, the Australian CEO of mining giant Fortescue Metals Group. Forrest claimed to have met with both Manchin and President Joe Biden during the critical points of negotiations around the IRA, and he may have gotten what he was looking for.
Fortescue has made aggressive moves toward decarbonization, including a $6.2 billion plan to reduce its emissions and a promise to eliminate consumer end (Scope 3) emissions by 2040.
But a key part of that strategy is a heavy focus on green hydrogen. Green hydrogen is a proven low-carbon energy source, but it is expensive. Production costs have nearly tripled this year while other expenses arguably make green hydrogen an unrealistic short-term option for reducing emissions.
Nevertheless, the final draft of the IRA included $9.5 billion for hydrogen, aligning perfectly with Forrest’s public advocacy for the technology, as well as his business interests. Fortescue’s Green Energy Manufacturing Center will build equipment and infrastructure for a $3 billion green hydrogen facility in Australia this year, with more to follow in the future.
Time will tell if those investments may pay dividends for ratepayers and the climate. Early forecasts suggest they might remake the troublesome economics of green hydrogen.
In the meantime, Forrest appears to be relishing his role in crafting climate policy, telling the Washington Post, “It’s very hard for environmentalists to say this is a bad thing, even though our company is everything they love to hate.”
At the same time, a recent victory for a climate candidate in Louisiana shows that big money isn’t everything.
Earlier this month, Davante Lewis defeated an 18-year incumbent fellow Democrat named Lambert Boissiere III to take a seat on the state’s Public Service Commission. It’s a low-profile post that will nonetheless have major impacts on how clean technology is rolled out in the coming years.
Lewis’s election to an obscure post in a state currently ranking dead last in installed renewables may seem like small potatoes compared to the influence of Washington power players like Andrew Forrest.
Still, it’s worth considering the well-heeled opposition Lewis had to overcome for the down ballot post.
Leading into the election, Boissiere built a six-figure election campaign war chest primarily with donations from Entergy, a major power utility in the South that has fought clean energy initiatives like the MISO transmission plan to add 53 GW of renewable energy across the United States by 2030.
Climate policy obstruction is practically par for the course for power utilities in the United States (see: John Oliver), but Entergy stands apart for funding dirty political tricks to get its way.
In 2018, Entergy was assessed a $5 million fine for hiring actors to crash two public comment sessions meant to gauge community support for a power plant in New Orleans. Locals argued the gas-fired New Orleans Power Station was an unnecessary, carbon-spewing boondoggle but were drowned out by more than 50 fake gas power plant workers who purportedly turned out to support job creation at the site.
All of which seems like overkill when you consider that one key member of the New Orleans city council committee responsible for approving the project had previously worked as a lobbyist for Entergy. Another had accepted thousands in campaign funding from Entergy in recent years.
The New Orleans gas power plant was approved and subsequently failed during Hurricane Ida. Eight days passed before the gas plant came back online, during which time at least five elderly people died in the heat without air conditioning.
Climate change-driven events like Ida have cost Entergy billions in recent years, which may explain why the utility was caught overcharging customers for nuclear energy, resulting in a $300 settlement this year.
To be clear, while Lewis' unlikely success against that political backdrop is exciting money was certainly a factor in his victory.
The Environmental Defense Fund’s Super PAC EDF Action funnelled $1.1 million into negative TV and internet ads against Lewis’ opponent. That’s a lot of money, but still doesn’t compare to Entergy's expansive political patronage network, of which Boissiere was just one part.
Super PACs like EDF Action are not allowed to coordinate directly with candidates but are free to spend supporting or opposing them in the media.
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