17 december 2018

[4C Note: The following article by a columnist in the Financial Times was sent to us by one of our signatories. It is ]

The rise of Saudi America

By Edward Luce, FT Swamp Notes. Money and Power in Trump's America, December 17, 2018

Let's get this straight: the world gathers for a vitally important conference on global warming in Katowice, Poland — one of the few chances to agree on a plan to slow it down. It goes immediately awry. Its hosts, the Polish government, decide to showcase the benefits of coal, which is to global warming what matches are to fire. That's dissonant enough. Then the US, the world's second-largest emitter, gives presentations on the benefits of fossil fuels. Moreover, the Trump administration bands together with the governments of Saudi Arabia and Kuwait to remove any sense of urgency from the concluding language. Maybe global warming is happening, maybe it isn't. Who knows? What we do know is that America claims to have several hundred years worth of oil and coal in the ground. It intends to use it.

The phrase 'Saudi America' has been adopted unironically by the drill-at-all-costs lobby in US politics. In their new book, Trumponomics, Stephen Moore and Arthur Laffer, use the phrase boastfully. They claim that America owns $50tn of untapped fossil fuels and that extracting them could add a full percentage point to US growth annually and in perpetuity. They make no estimate of the costs associated with global warming because they think it's a false flag of the preachy left. Moore's last book with Kathleen Hartnett White, Fueling Freedom: Exposing the Mad War on Energy, should give you a flavour. Trumponomics is about 'coal's colossal comeback', 'made in America energy', and 'American energy domination', Moore argues.

Moore, Laffer and Larry Kudlow (now Trump's economic adviser) were the three key economic influences on his campaign. They wrote his tax plan and his energy plan. Their self-proclaimed spirit of 'can-do optimism' is now interrupting the world's already halfhearted attempts to slow global warming. The US is being joined by other large fossil fuel producers, notably Brazil and Australia, in extolling the virtues of carbon release. The world's largest consumers, notably China and India, are also slowing their attempts to move to fuel efficiency. If America is ignoring the rules, why shouldn't they? The answer is that they'll be worse affected by climate change than the global north. But that's a hard line to uphold when the world's richest country is proclaiming that the economic price is too high. If decarbonising is too expensive for America, then who else could afford it?

I have no idea how historians will view the Trump administration 50 years from now. Was it an aberration? Was it the last gasp of a dying, largely white industrial working class? Or was it the beginning of a new phase of America's retreat from globalism? It could turn out to be at least two of these three things. The election in 2020 will help settle that argument. One guess I can hazard: if the world fails to stop catastrophic global warming, the 2016 US presidential election will be seen as a turning point. That was the moment America turned its back on what was blindingly obvious to anyone with ears and eyes.

Here's another guess: global warming will be on the ballot in 2020. It'll be Saudi America against Denmark America. Whomever the Democrats nominate will have to make a case for tackling global warming. The party's base will insist on it. Most of the young intake of liberals in the next Congress have signed up to the so-called Green New Deal — a plan to put post-industrial America back to work by investing in a new generation of clean infrastructure. Older Democratic hopefuls, such as Bernie Sanders and Joe Biden, have given it a thumbs up. They talk of 'green collar jobs', transformative investments, and protecting future generations from the storms, wildfires, floods and crop erosion that's already happening. I have no idea whether it'll convince voters. Recent history would imply not. But it's exactly the spirit of 'can-do optimism' America needs. As the saying goes, you can do well by doing good. The sooner the US realises this, the better.

Recommended reading

My column this week warns liberals against betting on a looming Trump recession. If economics were a morality play, Trump would long ago have earned a recession to his name. In the real world, the economy might not conform to the Democratic timetable.

My colleague Martin Wolf wrote an excellent column on rethinking the purpose of the corporation. “If a business substitutes making money for purpose, it will fail at both,” he argues. It reminded me of the old argument about happiness. People whose sole motive is to be happy tend to be unhappy. Happiness, like making money, is a side benefit of other pursuits.

In Foreign Affairs, Jake Sullivan makes the best defence possible for Washington’s foreign policy “blob”. Sullivan is among the most talented national strategic thinkers around — and he would probably be helping direct Hillary Clinton’™s administration had she been elected. I don’t entirely agree with him, though. For an alternative view, here’s my column from last week on how Trump is laundering the reputation of the US foreign policy community.

Finally, Nick Cohen explains one of the great puzzles of our time in the Observer: why Jeremy Corbyn, and those around the Labour leader, aren’t seizing on the opportunity to push for a second referendum on Europe. Their pipe dream of socialism in one country can only be realised in a Brexit Britain, he argues. May the Lord, and Karl Marx, forgive Corbyn for his solipsism.

Rana Foroohar responds

Ed, I think you’ve hit the nail on the head that climate will be a huge voting issue in 2020. I have long observed that for my children and their cohort, global warming is the defining political issue — it’s what their schools’ social studies and science programmes are organised around, and what they personally fret most about. The Green New Deal is of course a no brainer policy wise. I wonder, though, if this is an issue that the new crop of Social Democrats like Alexandria Ocasio-Cortez will own, or if it’ll be something that business itself will drive. Companies are far ahead of politicians on these issues, because it affects their bottom line in the here and now. That, I think, provides a political opportunity for more centrist, business friendly candidates as well as the progressives.

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