○On the campaign trail, then-candidate Joe Biden’s “build back better” plan was at the center of his promised strong climate agenda. But despite the proposal’s potential civilization-saving implications, Biden spoke more about the immediate impact on everyday American life: job creation. “When I think of climate change,” as he has often said before and after being elected president, “I think of jobs.”
There is a very clear political logic to this approach: The country is in the midst of unprecedented uncertainty, with unemployment soaring to nearly 15% at one point. Americans worry about their ability to make ends meet. Now, two years later, economic woes are still top of mind for many voters, this time with the worst inflation in decades. Enter the Inflation Reduction Act. The bill, negotiated behind the scenes by West Virginia Senator Joe Manchin and Senate Majority Leader Chuck Schumer, has many of the same things Build Back Better ‘s goals and objectives—namely, cutting U.S. carbon emissions—but using a new, more timely name for it.
Much has been written about whether the Reducing Inflation Act will actually lower inflation. (Hint: Analysts and economists say it will — even if it takes a few years to take effect). But beyond the policy implications, it’s worth considering a major narrative shift from “job creation” to “inflation destruction.” In renaming Biden’s most important climate policy as the Reducing Inflation Act, Democrats emphasized “climate is everything.” Political rhetoric is finally catching up with reality.
A version of this story first appeared in climate is everything communication. To register, click here.
Learn how Here we are, it is helpful to review two pieces of legislation enacted at the height of the Great Recession: the American Recovery and Reinvestment Act (ARRA) and the American Clean Energy and Security Act (ACES). Acronyms are very volatile, so bear with me. ACES is a pure and simple climate bill introduced in 2009 as the country’s chance to finally tackle climate change. It would set a cap on carbon emissions and allow companies to buy and sell pollution credits. It’s complicated and hard to understand; popular support lags. It never became law. ARRA, on the other hand, is not intended to be a climate bill at all. Enacted that year, it injected nearly $800 billion in federal funding into the economy for everything from new highways to broadband internet. Crucially, it includes $90 billion in federal funding to promote clean technology. The lesson for many policymakers is clear: Big investments in climate-related matters are popular and politically feasible, while complex regulatory schemes are not. Grassroots pushes for programs like the Green New Deal have cemented that belief.
Biden, who came to the White House last year as vice president overseeing the distribution of stimulus money, intends to use the same approach. In another economic crisis, he proposed spending trillions of dollars on his “Build Back Better” plan, which stalled. There are a lot of factors to blame — not least Manchin’s fickleness — but it’s worth pointing out that the jobs narrative may be less convincing as the unemployment rate plummets after Biden to around 3.6% today.
As “Build Back Better” stalled, politicians poked around for other hot issues related to the bill. Some have suggested viewing the move as a response to Russia’s invasion of Ukraine – reducing reliance on fossil fuels could reduce Russia’s influence. But arguably, Manchin has a better idea of where the political winds are headed.
in line with voters rank inflation among their top concerns, it makes political sense to reposition the massive spending bill to try to address the issue. That’s not to say the links are all designed for polls. analyze Data from places including Moody’s suggest the legislation pushes inflation down moderately over the medium term.
The links between energy, climate and inflation are numerous and obvious. The economy runs on fossil fuels, and price volatility can play a key role in inflation – as we saw in the Ukraine war. Then there’s the inflationary impact of extreme weather events that disrupt supply chains and drive up insurance costs. In my contributions to this newsletter, I often try to draw connections between climate change and the world around us that are not necessarily straightforward or widely understood. Joe Manchin did it for me this week and it was amazing.
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