It’s the economy, stupid

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THE WEEK THAT WAS

WHO’S DISTORTING MARKETS? — House Speaker Kevin McCarthy (R-Calif.) is using debt-limit talks to hold the Inflation Reduction Act’s tax credits hostage.

Woven through Republicans’ argument that an emphasis on green technologies will benefit China is another argument that the incentives “distort the market and waste taxpayers’ money,” as Josh Siegel and Kelsey Tamborrino report.

Unpatriotic? Maybe, some Democrats concede. But not uneconomic!

(The China argument actually does carry some weight with Democrats, Adam Aton reports for POLITICO’s E&E News. “The reality is that Americans need short-term access to imported solar panels,” Rep. Mike Thompson (D-Calif.) said at a Wednesday markup of a bipartisan resolution targeting Chinese solar panel imports.)

But President Joe Biden is going on the offensive, in a bet that the law’s domestic economic benefits will win out. (A POLITICO analysis early this year found that about two-thirds of the major clean energy projects announced since the IRA’s enactment in August were in GOP-held districts.)

“You and the American people should know about the competing economic visions of the country that are at stake right now,” Biden said in a Wednesday appearance at a union hall in Maryland.

Put more bluntly: “‘Let me kill over 100,000 manufacturing jobs — mostly in red states — or I’ll force America to default on bills we racked up and trigger a recession,’ is the opposite of a compelling message,’” deputy press secretary Andrew Bates wrote in a memo that the White House provided to POLITICO.

As Tom Steyer told us earlier this week in a previously unreported quote that got cut for space (we have space to fill today): “There is no such thing as a free market. Every market has rules. Think about it. 150 years ago, you could hire an eight-year-old and make them work 14 hours a day and pay them a quarter. That was legal.”

“When you think about carbon emissions, and you think about carbon pollution, it used to be no one even knew what it was; no one measured it. The IRA is a huge step forward in terms of recognizing how are we going to move toward cleaner technologies. How are we actually going to cut our carbon emissions in half? So those are just rules.”

Sustainable Finance

WEST CONTINUES WILDING — Pressure is building to do something to shore up the voluntary carbon market, but the feds aren’t ready to step in, our Jordan Wolman reports.

Commodity Futures Trading Commission Chair Rostin Behnam said Thursday that his agency sees a role for itself in policing the growing carbon offset market, but needs to do more thinking.

While the CFTC has broad authority to police market manipulation and fraud, “it is not our duty or responsibility or our area of expertise to police or set standards or methodologies for registries,” he said. The agency is “thinking about maybe potentially another [carbon credit] convening this year, and then really zeroing in on what we can do from a policy perspective.”

Behnam spoke at the release of a report by the Bipartisan Policy Center, a centrist think tank, and Carbon Direct, a consulting firm, that lays out options for federal regulation of carbon credits. (They range from doing nothing to creating and enforcing quality standards.)

EXTREMES

FIRE SALE — Colorado’s increasingly severe wildfires are driving insurers out of the state. Lawmakers are considering creating a state-chartered property insurance program, with residents across the state potentially on the hook for payouts, Thomas Frank reports for POLITICO’S E&E News.

It’d be the first state in 41 years to create an insurer of last resort, which exists in 32 other states and has become the largest source of property insurance in Florida and Louisiana thanks to hurricane damage. Gov. Jared Polis (D) is on board, as are lawmakers; the state House approved the bill Wednesday on a voice vote with no opposition.

An analysis by the First Street Foundation, a nationally recognized group that projects disaster risk, shows that 40 percent of Colorado’s 2.5 million properties currently face wildfire risk. In 30 years, the figure is projected to increase to 58 percent.

“If we don’t set this up now, when people start to not get insurance, we will have a giant problem. It is much easier for us to solve this now … before we have a crisis on our hands,” said state Rep. Judy Amabile (D), a bill sponsor whose district includes areas burned by 2021’s Marshall Fire.

FIGHTING FIRE WITH TECH — A prize for anyone who can reduce wildfire risk: The XPRIZE Foundation is launching a competition today for wildfire-detection and -suppression technology.

The contest will give out $11 million over four years and “aims to bring together exponential technologies such as AI, robotics, drones and sensors that can detect wildfires at inception and put them out in minutes before they spread.”

California Lt. Gov. Eleni Kounalakis, FEMA Fire Administrator Lori Moore-Merrell and former Forest Service Fire and Aviation Director Shawna Legarza will be in attendance at today’s event in Washington.

YOU TELL US

GAME ON — Happy Friday! Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. We deliver data-driven storytelling, compelling interviews with industry and political leaders, and news Tuesday through Friday to keep you in the loop on sustainability.

Team Sustainability is editor Greg Mott, deputy editor Debra Kahn, and reporters Jordan Wolman and Allison Prang. Reach us at [email protected], [email protected], [email protected] and [email protected].

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WHAT WE'RE CLICKING

— That Ford F-150 Lightning you’re looking at qualifies for the $7,500 tax credit being offered to buyers of U.S.-made electric vehicles, but then might not. Bloomberg explains.

— Researchers in California are experimenting with technology that could potentially remove carbon dioxide from seawater to help fight global warming. The Associated Press has that story.

— Chile is planning to nationalize its lithium industry – the world’s second-biggest – to boost its economy and protect its environment, Reuters reports.