What Mark Blyth Got Wrong About Bidenomics and Climate Change

[INSTRUMENTAL MUSIC] MARK BLYTH: From the Rhodes Center for international finance and economics at Brown University. This is The Rhodes Center Podcast. I'm your host and the director of The Rhodes Center, Mark Blyth.

I wanted to do this episode because I got something wrong. For the past two years, if you'd asked me if the Biden administration would ever do anything deeply meaningful to fight climate change, I would have said no. These feelings only got stronger last year after the Democrats failed to pass the first big attempt at climate legislation known as Build Back Better.

But then something changed. The inflation Reduction Act became law. And despite the name it's really a decarbonization bill. And a better one than I ever thought we were going to get. On top of which, it might actually even reduce inflation.

On this episode, I talked with two experts about why climate legislation was finally able to get passed in the United States and what this means for the country and the planet. Tim Sahay is a physicist, senior policy manager of the Green New Deal Network and senior fellow at the Atlantic Council. Ted Fertik is a historian and senior strategist for policy and research with the Working Families Party.

And as they both see it, this bill is the potential not just to curb the worst of climate change but to transform our society. I started by asking Ted about what exactly created the conditions for the passage of the inflation Reduction Act. Here's Ted.

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TED FERTIK: I think the three trends that we can look at and help to filter out some of the noise in terms of how we got to this point is, first of all, secular stagnation. And we could attach a bunch of other things to that, which are connected to it whether it's inequality or populism.

But some sort of economic and political crisis which I think became apparent really in the middle of the twenty-tens. And got people starting to get properly freaked out after Donald Trump won the presidential election in Twenty Sixteen. Bernie Sanders played it competitive in the presidential primary in Twenty Sixteen and then almost won the presidential primary in Twenty Twenty.

The second megatrend is climate itself. And the perception of climate as not just a threat to ecosystems but also a threat to political systems. I think this really started to get hammered home after the release of the Twenty Eighteen IPCC report on 1.5.

And then the third megatrend is China. And China is growing political, economic, geopolitical, military strength. The sense that what had once been a source of power namely, the ability to offshore huge amounts of US production to China and to build these globe spanning supply chains was now a massive source of vulnerability in the event of escalating tensions and potentially even ultimately war.

But also on the economic side and the geoeconomic side that China was poised to dominate the clean energy industries of the future and the US would be left out. Also just to put it out there. I think that China really mattered in terms of the sense that there was a domestic political crisis in the US. But also a real sense that the US was losing ground internationally.

And the question of what the state or the future of US leadership was on the global stage in part was seen to hinge on climate. And whether the US would shift from this foot dragging position on climate to actually exercising some leadership and encouraging others to go along.

So all of that adds up to something like a crisis of hegemony within democratic capitalism which the-- I think in particular, the policy making elite within the Democratic party felt that they needed to respond to. And the synthesis that we saw in the Build Back Better program ties together all the things that you would need to address that interlocking crisis.

MARK BLYTH: So there's a huge amount of stuff going on there. The one that sticks out-- that everyone will be familiar with of course, is China. And it's this notion that the pandemic brought it home in many ways. That, oh, we don't actually make anything. It's all made somewhere else. And it's now made somewhere else with someone who was a regime that we thought was going to essentially become just like us. And it didn't work out that way. And now that as you say real geopolitical tensions.

But you also point to another interesting thing about US leadership and its perception of leadership. I often say that the rest of the world doesn't care. And I'll give you an example of this. When George Bush withdrew from Kyoto climate cooperation picked up. It didn't die because the US wasn't involved.

When Trump pulled out of Paris the same thing happened. The Europeans in a sense redoubled their efforts and got serious about their own green transition. So to what extent is this more fragile than it seems. In the sense that this could just be Democratic political insiders and traditional elites having a bit of a moment of panic and jumping on the climate bandwagon to see if this works.

Does that worry you? Or do you think this is more fundamental than not? Is this a real kind of structural break in policy?

TED FERTIK: I think the idea of industrial competition with China and the idea that if we are going to do a cold war containment exercise, then we can't possibly be buying a lot of critical things from China. Those two things don't hang together.

And so the Biden people come in and they basically say, right, what are all the supply chains? Where are they? And they basically say, OK. We need to know where the pharmaceutical drugs are. We need to know where the critical minerals that make up steel and that make up silicon and solar PVs are. And they literally go to every agency and they say, tell us what really needs to be reshored.

So it seems that they are very clear that they do want to do a confrontation with China, which then requires this reshoring. And a sudden sort of realization that we don't have the wherewithal to do this. We have spent the last 30 or 40 years, allowing Wall Street to offshore and outsource and invest elsewhere. And there's a lot of industries that just have gaping holes in them, be it masks, be it pharmaceuticals.

So I think that adds up to something more structural.

TIM SAHAY: I think the question about whether the rest of the world cares about what the US does is a very interesting one. And you could answer it in a couple of different ways. On the one hand, it does seem to me that people in the US elite certainly believe that the rest of the world cares what the US does or doesn't do.

And I do think though even if US action or non-action on climate didn't particularly influence whether other countries were going to take action on climate or not. And certainly I think all of us have had our minds changed about the real political economy framework for understanding this, right? That we're now in a world of potential for stranded assets and potential for big upsides on supply chains producing all the inputs.

The win-wins that are there to be had. As opposed to the collective action problem framework that's so dominated climate politics and climate analysis for so long. Even then, I think there was still a pretty strong sense that on the part of allies and everyone else in the world that if the US was clearly-- if the US political system was incapable of responding to what was clearly an existential challenge on something like climate and could not get it in the game to do something constructive around this, then what can we really rely on them for.

Climate wasn't the only thing. Obviously, this sense was palpable during the Trump years. And so I do think that at the level of the foreign policy elite and policy elite within the Democratic party. The sense that they needed a comprehensive demonstration of constructive engagement. And that the US political system could deliver the results that everybody knew were needed. That was something that they took seriously and was a big part of the motivation to push forward on this.

MARK BLYTH: And once they did it of course, the Europeans didn't like it. But we'll get there in a minute. I want to build up to that point. Let's talk about Joe Manchin. Because he was the original veto player, right? Build Back Better, no. Build Back Better, no. Build-- wait a minute, what changed? What changed for him? And what changed the politics?

TED FERTIK: I think two things. The first was in the wrong direction, right? Or in terms of deepening his opposition was the inflation numbers really starting to tick up in late Twenty Twenty-One. So the House had passed the 1.8 or $1.9 trillion bill in the fall. And it was then in the hands of the Senate. And Biden was negotiating with Manchin to try to get it over the finish line.

And Manchin pulled the plug. Largely on the basis of those CPI prints, which to him affirmed what he had been saying all along. Which is that there was a big spending problem. And that inflation was a tax on working people and he wasn't going to stand for it.

Then in February, Russia started a war in Ukraine. And on the one hand, that only deepened his conviction that inflation was a huge problem. But on the other hand-- and this has only started to trickle out a little bit recently. He even said something about this at Davos. The conviction that we had to ramp up energy security became really quite important to him.

And so when Manchin is out there talking about all of the above with respect to energy policy, I think he's completely in earnest. And so he believes obviously, in fossil fuels. At Davos he was talking about the US getting up to 15 million barrels per day in oil production from 12 or 12 and 1/2 now. But he also believes in renewables as part of the overall mix.

So he negotiated for a package of energy credits that he thought was fair to fossil fuels. Fair by his definitions. And that would protect a variety of fossil fuel interests. But that also was going to without question ramp up the clean energy economy in the US. And he was wanted to make sure that West Virginia would also benefit from that. As everybody was willing to grant him from the very start of this whole process.

So I think that the Ukraine war actually in a somewhat unexpected way ended up really influencing his ultimate disposition.

MARK BLYTH: One other thing you mentioned that I want to bring into the conversation or because I think it's fascinating. Is that we'd long been puzzled by his opsonins on coal. Because there aren't actually that many people employed in coal. I like to give the example, if you go to Maine and you try and take on the lobster industry, you'll die. But more people work in insurance than in lobsters.

But it's the symbolism of the Mars. And Adam Tooze had an interesting one a while ago when he looked at kind of the spillover effects on wages. But what you pointed out was just a huge ramp up in gas. And now because of Ukraine no more Russian gas goes into Europe. It's all going into LNG and then it's getting shipped off to Europe. So there's a win-win there that wasn't before. Was that really part of his out?

TED FERTIK: One of the things that Manchin explicitly negotiated for-- which actually wasn't in the IRA itself but was in this companion handshake agreement that he struck with Chuck Schumer was about the Mountain Valley Pipeline, which is a pipeline that's supposed to run from the gas fields in West Virginia through Virginia on its way to the coast.

And, yeah. I think he absolutely saw this win-win-win. And just to really ensure that win-win-win was realized he conditioned his vote on Schumer bringing to the floor an additional package that would include the Mountain Valley Pipeline along with expanded authority for fossil permitting. And in theory, clean energy permitting as well.

That has not yet happened. It's been held up. Largely because of environmental justice concerns among progressives in the Senate and the House. But that has been a priority for Manchin all along. And one of the things that he's tried to use his leverage in these negotiations to win. Let's bring Tim into the conversation here.

I love bottomless mimosas. And I thought it was a great way that you explain this. When people tend to think about industrial policy. They tend to think of government ministries handing money to firms and telling them what to do. And that's not at all how this works. You have this brilliant analogy of bottomless mimosas tell us about that.

TIM SAHAY: Well, it doesn't work because in the US there are these spending limits that have been imposed for many decades. It pretty much you can push it to maybe around the nineteen-seventies with the rise of neoliberalism. That you can't spend more than you take in. And these PAYGO rules severely limit public investment.

And so one of the ways around them is to use the tax code. And the tax code has a fundamentally democratic quality to it. That once you change the software of the tax code, it changes what individuals, what NGOs, with local governments, what firms can then do. So if you just add in a whole bunch of carrots into the tax code, there's this second benefit that comes off it. Is nobody knows how many people are going to drink those mimosas.

So you've just created a restaurant and you're giving out bottomless mimosas, which are these tax credits and no one can predict it. And that was where a unique deal took place between the fiscal deficit hawks. And let's call them the green acceleration or the green progressives that said, OK, this could make sense. You give us a spending limit and we work our way around it because you have no idea what you just signed up for.

You're giving people $7,500 for an EV. You don't know how many people are going to take those. You're going to rely upon a model to tell you how many people are going to take those. And fundamentally, green progressives thought that Treasury and the IRS are just staffed with people who are low balling these numbers. They are earnestly thinking just maybe 10 million people will buy an EV over the next day.

MARK BLYTH: Yeah, you'd look at the rate of adoption today. Take the average of that and project forward. You have no reason to expect a fundamental change.

TIM SAHAY: Yeah.

MARK BLYTH: But if that acceleration happens, bottomless mimosas, right?

TIM SAHAY: Bottomless mimosas. And then the second-- so that's just on the consumer side. But this bill is stuffed with investment side tax credits. So it just says you get a 30% discount. You put plonk down any bit of green investment, solar panels, wind turbines, batteries, CCS, hydrogen, you immediately get a 30% investment discount.

You put it into an area that has a lot of stranded assets, you get an extra bump. You pay people good wages, you get an extra bump. So these bottomless mimosas have been designed in a way that allowed the private sector to move towards eating them up.

And on the side of green progressives that pushed for these knowing that you couldn't get what we actually wanted, which was a public entity that would build out renewables in a fair way and put them into places that are disadvantaged and so on. Instead we had to rely upon the bottomless mimosas to get us there. And what we got was this strange handshake deal between two sets of people with fundamentally different views of the future.

One of them thinking, oh, yeah, just 10 million people are going to take these EVs. Another thinking, ha ha ha you have no idea what you just signed up for. And that's fair. That's how any deal--

MARK BLYTH: That's politics.

TIM SAHAY: That's politics.

MARK BLYTH: You've got to have a bit of ambiguity in there to make it work.

TIM SAHAY: And that's how any deal takes place. There are two sides. There's a buyer. There's a seller. There are people who have to have fundamentally different views of the future.

MARK BLYTH: Right.

TIM SAHAY: And I think the bottomless mimosas it's on progressives now to make sure you tell all your friends. If you know a place that sells bottomless mimosas you got to make sure all your friends get in there.

MARK BLYTH: Let's take a random number. Let's say it cost $100 to make a green investment. What you're saying is that half the cost of your investment you can just claim back through all these different bottomless mimosa tax credits, right?

So you're actually implied return on the investment is huge. This creates exactly the diversion away from traditional carbon investments that you want. Because they may be riding high on the post Ukraine boom but they're going to come back down again.

The tunnel let's say it goes to 5%. On this stuff, it could be eight. It could be nine. It could be higher. So any normal investor is going to go for it. Now, that's the logic of using financial incentives to nudge the transition. It hasn't been so successful to date. But you could see a logic as to why this is the case particularly if we're underestimating the uptick, right?

But Brett Christopher someone you know has a nice critique of this one. He says, yeah, but the problem is you're dealing with capitalism. And at the end of the day, if you deploy all these basically machines that make free electricity. That's great. But ultimately, you have to run them as a public utility which is going to be really, really difficult in the United States.

Because essentially, it will be free. And if it's free, there's no profits. And if there's no profits then why would you want to get into it? So is that a if you get there, you then get screwed but in a different way? Is that something that was considered by the architects of the bill?

TED FERTIK: It's a great question. I don't think I have a totally satisfactory answer to it. And one of the original version of the legislation the one actual stick that was really contemplated was-- they were calling it the Clean Energy Payments Program. I think was CEPP.

And that was actually going to mandate that utilities fully decarbonize by a certain date. Give them extra goodies to deploy renewables faster and then start penalizing them after a certain date if their share of fossil generating electricity was over a certain amount that was going to increase over time.

And so people must have been modeling what happens to the utilities if they actually become able to run with basically no operating costs. At least on the generation side. But I don't think anybody was-- that is a problem that we'll cross that bridge when we--

MARK BLYTH: It's a good problem to have.

TED FERTIK: --when we come to it.

MARK BLYTH: That would be a good problem to have.

TED FERTIK: I think there are all sorts of really interesting questions about what is going to happen with the utilities over the next couple of years as they adapt to this new regime. It does seem like the-- what they've done with the tax credits in response to what they've been hearing from all sorts of power producers over a couple of decades is really simplified them and made them much more consistent and predictable.

So the big thing that everybody wanted was whatever you do make sure that the tax credits are locked in for 10 years. That they don't expire because that's what the security of capital is investment is predicated on. And I think Manchin was quite excited about this. As I recall reading about it at the time.

Right now there specific tax credits for each different type of generation. But starting I think in Twenty Twenty-Five, it transforms into a so-called technology neutral type of credit. So whatever you're doing as long as it meets the zero carbon specifications is eligible on equal terms for this production and investment tax credits. And part of that is just to drive this into the bloodstream of investment capital.

And I think you're seeing, right? That a lot of the big private equity and other players are raising these big pots of infrastructure money that they plan to pretty aggressively deploy on building out gigantic wind farms and solar farms and transmission lines and all the rest.

MARK BLYTH: So let's go back to Tim. How does this change the politics?

TIM SAHAY: Because a very straightforward model would suggest that if you're a growth model for your state on a US basis is heavily carbon, then you're going to defend that model. But what we're actually seeing is something really interesting. Huge amounts, if not the majority of current investment and quite likely future investment is going to go in the red states. Does that make the red states less red?

Maybe the red becomes green. So maybe the red states remain red but they have a reason to be green. So it's like military spending. It's totally bipartisan. You just plank down a factory in every congressional district and the military budget just keeps growing. So could you get green investments towards that place.

Right now obviously it's an extraordinarily confrontational fight between the Republicans and the Democrats. We had zero Republican votes for this bill. The question is does it remain that way? And we've seen this really strange thing take place after the bill has passed, which is that a lot of companies, auto companies, battery companies are announcing their new investments. And they are in red states.

And not a single red state Senator voted for these bills. So what's going on? And it's just that well, they have anti-union laws in place. Well, they have cheap and abundant wind and solar resources to deploy. They have cheap land to deploy. So of course, it's going to go there because that's where wind and solar has led for the last 20, 30 years. That hasn't changed the color of Kansas. Kansas is still very deep red. But you are now making sure that these green tax credits will just never be overturned. That's the hope.

MARK BLYTH: And that's an interesting question for politics then. Because in a sense if the goal is decarbonization and all of the good things that go with it starting with species survival. Then do you really have to worry about the politics in that sense. If you get there, does it matter?

And it matters in the one sense because the Democrats have a very progressive agenda on this. As do most left wing parties frankly. This needs to be not just an effective transition but a just transition. Is it the case that the IRA has backpedaled the justice angle? Or is it still there but it's in different guises? Did that get sacrificed too?

TED FERTIK: I think the Biden people and Democrats in Congress fought pretty hard to preserve some core justice elements of the whole package. And they started with a lot of them. They started with a lot of commitments to this idea of Justice 40. That 40% of investments should go to the communities that have suffered from fossil fuels historically and that are vulnerable to climate change in the future.

There was a lot of stuff that was meant to ensure labor standards. That the jobs that get created were good jobs. Even at least at a rhetorical level they were committed to the idea that it should be union labor. Not all of that survived the meat grinder of getting it through the Senate and Joe Manchin Senate in particular.

Certainly many of the union provisions were ultimately sacrificed. Although, I think it is important to note that on the tax credit side there are these components that really reward companies for using prevailing wage. So basically, union or near union wage scales for construction labor and apprenticeship programs that which are for the most part run by unions though no requirement for unionization itself.

But for example, the IRA or the original Build Back Better proposal offered a $7,500 subsidy for every EV sold but added a bonus of 4,000 or so dollars if that EV was union made. And that was meant to encourage high road production to advantage those companies that employ union labor. And maybe make it a little bit easier ultimately to unionize some of the non-union automakers in the US.

Manchin was having none of that. So he stripped that out. But substituted for it this very perplexing and we're still just making sense of the geopolitical implications as well as the domestic economy implications. He substituted this aggressive domestic content requirement, which seems to be having at least one of its intended effects.

Namely, you just see one announcement after another week in week out of another battery plant, of another aspect of the EV supply chain in particular new solar plants that are locating in the US. So I guess I would say that I don't know that the environmental justice or the sort of green progressivism was sacrificed although pieces of it were lost.

But we're now in a situation where a lot of these goals are going to have to get achieved. If they do get achieved administratively. And we'll see both the commitment of the Biden administration and also their creativity. If they're able to be successful in embedding some of these goals in the processes by which people access the credits, or the processes by which people get access to Department of Energy Loan Programs.

There's a lot out there that can be figured out. And that is going to be technical and probably not very flashy but might have real consequences. So I'm hopeful on that front and Tim and I are both involved in efforts to try to push in that direction.

TIM SAHAY: One idea of the justice component that has survived is what happens to places where oil companies shut down and gas companies shut down and mines closed. And those places actually have-- let's just call it a slush fund because no one really knows how this $250 billion loan program authority is going to be used for what sorts of projects.

But essentially, any a place that is looking to either clean up its act or to retool itself so that it can still operate with CCS or carbon pollution treatment technology in place can get cheap money so that the jobs remain in those fossil fuel communities whether they are in West Virginia, whether then Wyoming. And there's basically hundreds of these sites that are scheduled to shut down over the next decade.

And this pot of money didn't need to be created for a just transition. And it has. And that is good because it is explicitly meant for communities that are facing a decline and a loss of jobs and a loss of income. And now they have a green future ahead of them.

And Manchin made sure that this money is going to be used for the coal and gas fields of the Appalachian. As soon as the bill was passed, there were announcements of, oh, wow, there's going to be a new battery plant set up in West Virginia. There's going to be new wind turbine manufacturing, solar manufacturing, electric bus manufacturing.

So there are new industries that need to be created in these fossil fuel heavy states. And the way the bill is designed is just to direct investments towards those states.

TED FERTIK: I think we do have to say that on the question of the just transition where the heaviest criticism on the IRA fell-- and I think justifiably so. Is on just how much inducement there is to the continuation and even in some cases expansion of fossil fuel production, right?

So if you think, as most people do, that we need to be reducing how much fossil fuels we produce over time the IRA is not helping in that regard except to the extent that it is juicing demand for alternatives which we hope, right? And the modeling suggests will reduce demand for fossil fuels over time. But it's happening entirely on the demand side, right?

And furthermore, you know-- and this was Manchin's explicit insistence, right? It comes from-- you can pinpoint it to the individual who did this. There's these aspects where the IRA ties new leases of wind and solar generation or renewable generation to new leases of fossil generation and fossil extraction.

And how much those will ultimately matter in terms of how many new producing wells get brought online as a result of those provisions. I don't think people know yet. But it's certainly pushing in the wrong direction from where many of us thought things needed to go.

MARK BLYTH: I said I'd return to this, so I will. Your motivation and this is partly geostrophic. It's not just about the security of supply chains. It's the fact that you no longer trust China. And you want to kind of remove yourself from them to a certain extent. And to do that you need to build coalitions.

And your long time allies on this are people who are intimately bound to China, particularly the Europeans. They need them for rare-earths. They need them for rare-earth refinement. There integrating transition is effectively tied into China's continued expansion of its green economy. And yet along comes this inflation Reduction Act. And it's really pissed off the Europeans and the South Koreans. Why? What was in it that did that?

TIM SAHAY: I mean, very simply batteries and EVs were now given extra money if they were made in America. So it's not even that the Europeans and the Koreans and the Japanese and the Chinese can't sell them in the US. It's not that the market has been closed off. It's just that their EVs don't get the same subsidies. So they become more expensive in the eyes of American consumers. And therefore, they would suffer loss of market.

So that's their sense that we are being shut out of the American market. Not by an explicit stick. We are allies after all. But you are discriminating against us. And these fall afoul of various WTO laws. And essentially America just says, well, live with it. We care about where stuff is made now.

TED FERTIK: I think it's the story is really quite messy. And was a surprising twist. Because the original legislation did not have anywhere near these aggressive domestic content requirements in part. Because none of the people who were cooking this stuff up were motivated by a desire to antagonize South Korea, Japan, Germany, France any other auto exporter or battery exporter. But Manchin was very concerned about this.

And so these domestic content requirements-- people are saying, well, we everybody knew about them and nobody was talking about them. It's not true. They didn't exist in that aggressive form until the deal was announced between Manchin and Schumer in July.

The other thing that's weird is that-- what I think people are understandably upset about is that, it does really feel like cannibalization in a certain way. Because you don't have to be an American owned automaker or American owned battery maker, right?

So European companies and Korean companies can set up their battery manufacturing in the United States. And as long as they meet the percentage requirements that are made in America, then they are eligible for the credits, right?

So there's a sense in which I think people look at this and say, you just straight up taking jobs from Germany or Germany suppliers or Korea and Korea suppliers, right? And just locating them in your own country. And that this has this real mercantilist quality that people understandably object to. But I think what the Americans say is important. And we will find out whether this matters in the scheme of things.

But what they'll say is two things. One, these were the political terms for us to get on board with climate. And you all should really want be on board with climate. And this was the price. And so suck it up. And then two what they'll say is that, the US is an engine of innovation.

And the US can bring things to commercial scale really quickly. And so by concentrating production and winning the US over to this future political economy. It's actually going to accelerate green tech in all sorts of ways that the rest of the world is going to benefit from.

MARK BLYTH: Now, that's a very convenient story to tell, right? So we'll see if it turns out to be true.

TIM SAHAY: Another twist on this is, if you think about a country like Germany, right? That lives and dies by exports. For better or for worse. They rely on third country growth. And the reason Toyota is the biggest car company in the world is because there's lots of factories in America. Not because it has still has factories in Japan.

So there's a way in which-- it's almost as if the European reaction to this is based upon its own version of mercantilism which is we need to make all these batteries and EVs. And it's zero or something against everyone else. But surely, we just need more.

MARK BLYTH: There's a billion cars on the planet. There's a billion cars that run petrol and gas. So they all need to be shifted out. At the moment, less than 2% of them are electric. So it's a big--

TED FERTIK: There's plenty of room.

MARK BLYTH: There's plenty of room.

TED FERTIK: We do talk a lot about the potentially conflicting US aims here, right? And the ways in which the policy may be contradictory. Because obviously at the same time more or less that the IRA is being rolled out and people are starting to wake up to the significance of these domestic content requirements.

The US launches the most aggressive export bans in history in order to prevent high-end semiconductors from going to China or from being made in China. And many people are talking about this, right?

The two of the leading machinery makers that are implicated in these export bans or who need to cooperate in order for the export bans to have their intended effect are Dutch on the one hand and Japanese on the other hand. And it certainly did not seem like the domestic content requirements in the IRA were contributing to the desireness on the part of the Japanese and Dutch. Both their firms and their governments to go along with this.

Now, it seems like they are. And so maybe the people in the US policy making elite can pat themselves on the back that they calibrated just right. But there is that real potential contradiction and tension in how all of this is playing out. That the US has to deliver a lot of really material economic benefits at home. At least, the policy elite believes in order to sustain the coalitions for the green transition.

And they need allies to be sticking closely together in an era of increased geopolitical confrontation that the US itself is contributing to the escalation of. And this is one flare up. There will be others that we haven't yet anticipated. But I certainly think that's the thing to watch closely about how all of this plays out over the next 5,10, 20 years.

MARK BLYTH: I think that's a good place to leave it. Thanks very much.

TIM SAHAY: Thank you.

TED FERTIK: Thanks.

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MARK BLYTH: This episode was produced by Dan Richards and [? Layla ?] [? Wirth. ?] You can listen to all our episodes anytime, anywhere by subscribing to The Rhodes Center Podcast wherever you listen to podcasts. We'll be back soon with another episode of The Rhodes Center Podcast. Thanks for listening.

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