The culture war of doom

Climate change denial used to be about money. These days, it's turning into the kind of thing folks want to secede over. How climate went from economics to religion.

This newsletter has taken me WEEKS, and I apologize, but luckily, it’s a topic that’s not going anywhere! Skip to the bits and bobs for some quick thoughts about the SVB bank debacle, but first, let’s talk about how the right is dooming itself and all of us by turning climate change into a culture war, shall we?

Once upon a time, we used to have a relatively sane, bipartisan conversation about the risks posed by global warming. No, for real. Check it out:

“If the climate change within the range of current predictions actually occurs, the consequences for every nation and every aspect of human activity will be profound,” read the memo. It was written in 1989 by the acting assistant Secretary of State Richard Smith, and directed at then-Secretary of State James Baker, just as President George H.W. Bush was taking office.

It went on to say:

“As you yourself [referring to Baker] stated, we cannot wait until all the uncertainties have been resolved before we act to limit greenhouse gas emissions and to prepare for whatever climate change we are already committed to.”

That’s the kind of thing that Republicans used to say. Sure, yeah, President Reagan was no friend to the environment (he removed the solar panels that President Jimmy Carter had installed on the White House in a bid to promote energy independence and renewable energy). But most of his undermining was in service to his own policy ideology of stripping away as much government and regulation as possible.

The first President Bush actually started doing serious work on global warming, partly because of the types of memos quoted above. He signed a law mandating a National Climate Assessment, to be released every four years, created a research agency comprised of 13 federal agencies, and signed key amendments to strengthen the Clean Air Act.

But over time (in a lesson to us all), Bush Sr. came to view environmental action as a political loser, because no action was ever good enough for the most extreme on the environmental left (ahem). And let’s be honest, everybody was starting to make a lot of money on oil. By around the year 2000, Republican strategists started concerted efforts to blunt the language of global warming by popularizing more mundane phrases like “climate change.” In fact, one of those strategists, Frank Luntz, has since apologized for his work on what was effectively climate disinformation and is urging swift action around the climate crisis.

Meanwhile, Exxon in particular, and the oil industry overall, were waging their own disinformation campaigns around the causes of global warming, despite having impressively accurate science on what the consequences of that warming would be and having that science as far back as the late 1970s.

And since 1990, the oil and gas industry has steadily increased its lobbying spend on Republicans, while roughly maintaining spend on Democrats. Peak campaign spending by that industry came in 2020, as it happens, with President Donald Trump receiving the lion’s share of those donations, according to research compiled by Statista.

I’m not saying Democrats don’t get any oil and gas money. I’m just saying … well. This.

Big facts.

So first you had the money, combined with years of disinformation.¹ And when the Bush Sr.-mandated fourth National Climate Assessment came out in 2018, and it said worsening global warming and extreme weather and related disasters would cost the US hundreds of billions of dollars and impact the lives and health of millions, President Trump responded with a resounding, “nah.” I’m paraphrasing: his literal response was, “I don’t believe it.”

And these days, that’s all it takes. Almost ever since then, refusing to believe the voluminous, overwhelming, consensus-of-all-consensuses (consensi?) science around human-caused global warming became a matter of religion on the right. You don’t need to counter the facts, you just say they’re not true. Easy, right? And oh boy, add in ESG, with a metrics matrix that includes good company governance as well as diversity, equity, and inclusion, and you have the makings of a downright nuclear culture war. And here we are.

On March 1, House Republicans blocked a Biden administration proposal that would have made it easier for retirement plan administrators to consider ESG factors when choosing their investments. They say it’s “woke” investing. Republicans from Texas, Florida, Louisiana, and South Carolina pulled $4 billion out of BlackRock to protest some pretty milquetoast ESG investing strategies, and are trying to make it a pillar of their 2024 messaging. Other states have enacted similar mandates, telling funds to divest from BlackRock, JP Morgan, and Citigroup. And the chilling effect seems to be working: Vanguard announced in December that it would pull out of a financial sector net-zero alliance in order to be more “independent.” Some saw it as caving to right-wing pressure about supposedly liberal investing.

Just as an FYI, pension fund managers in Kentucky and Indiana have actually revolted against the mandate by their states to pull funds out of firms that engage in some kind of ESG investing. They say it will cost their investors money and actually require them to violate their fiduciary duty to their clients. From Institutional Investor:

In Indiana, which borders Kentucky, the Legislative Service Agency’s Office of Fiscal and Management Analysis estimated that a bill requiring that the state pension system, and a few others, divest from firms engaged in ESG investing would cost $6.7 billion over the next decade — lowering returns for the defined benefit pensions from 6.25 percent to 5.05 percent annually. Those numbers were an estimate created by the Indiana Public Retirement System, leading the Office of Fiscal and Management Analysis to conclude in its published analysis that the bill would “likely result in increased expenditures for state employers for pension contributions.”

The number was so huge that Republican state legislators quickly amended their bill to exclude private equity and hedge funds from many of its provisions.

But the drumbeat continues. Recently, when some far-right Republicans started talking about a “national divorce,” note the third bullet point in this list of presumed benefits: “States could continue using fossil fuels.”

Wow.

So fossil fuels are now a plank in the neo-secessionist movement? Mmmkay then.

Once a campaign of economics and framing, the right’s rejection of is now a near-complete ideological obsession, to the point where it’s among the boxes that must be ticked to be considered a real Republican. And it might mean that the SEC bows to political pressure and rolls back plans to force companies to report the full extent of their carbon emissions.

The chilling effect also means climate change is being added to the long list of things the media is afraid to talk about too much, for fear of getting yelled at by the right. Recently, in fact, the BBC decided not to air what’s being described as a profoundly powerful documentary by Britain’s most popular person, David Attenborough, reportedly to avoid angering the right-wing politicians currently in charge of the UK’s government. (The BBC has since denied that politics played a role.)

All of this is short-sighted (that’s putting it pretty gently) for two reasons. First, it stops us from taking quick action to save lives and homes and species. Bad. Second, it’s also bad business. Georgia is stoked about all the money coming in from the Investment Reduction Act, for example, and 65% of Republican voters, as of Pew Research last July, said “increasing jobs and economic growth” was most important to them in thinking about how to address climate change.

Well, here’s where I’d remind you that the financial industry and the biggest re-insurer in the world are warning that, for example, global GDP could drop by 18% by 2050 if we don’t take dramatic action on carbon reduction, and 4% if we take Paris Agreement style action. That’s not ideology or wokeness, that’s cold, hard, actuarial tables predicting losses in the literal trillions of dollars. The US alone is predicted to lose up to 10% of GDP, while people on the right are tweeting that loser leftie snowflakes want to “woke” your truck nuts, or whatever.

Turning climate into a culture war is a dangerous game for the GOP, because it doesn’t leave smart Republicans a way out. Talking about climate as an economic calculus is actually a winning message that has the added benefit of being true. The more it becomes about a theocratic-style rejection of science and embrace of fossil fuels as a sacred lifestyle and tradition that has to be protected by means as extreme as secession (cue the uncomfortable parallels here), the more it becomes a trap that strangles us all.

BITS AND BOBS:

On SVB: Truly, this is moving too fast to try to make any predictions, and millions of characters have already been spilled and will be spilled on the impacts, the causes, the lead-ups, and the contagion. But here’s my high-level takeaway: the collapse of this bank represents a truly stunning act of cannibalism by the venture community.

As always, the impacts will be felt most quickly and hardest by the small businesses (I saw a good tweet suggesting that “small businesses” is better framing than “startups,” more on that in a second) who make up the front lines of depositors at this and whatever bank gets caught in the crossfire next. But those who tweeted about this most and who started this run and kept it going have the least to lose, at the end of the day.

That gets me to my second takeaway, which is that as these tweets continue, with their palpable fear-stoking and their rage and fury and righteous demands that the government step in to take care of them, they actually make a rescue politically harder for the federal officials they so badly need. Economics is politics and politics is economics, and if the public thinks the rescue is for Rich VCs (tm) and not my friend Sunil, who’s just trying to build a great company that will help people and who’s trying to keep his employees paid, the rescue actually gets less likely, and Sunil’s the guy to suffer.

Sunil Rajaraman @subes01

10/Is this a bailout of the rich? No. Workers are affected. And the likely scenario of an asset purchase would require no 'bailout' beyond FDIC insured money. Lots of people on Twitter showing their true colors over the past 24-48. Founders are noticing who the bad actors are.

You want to know how to keep contagion from spreading? Put on a GD mask.

Quick TV talk: I sat down with a bottle of wine and I watched the entirety of The Witcher: Blood Origin the other night, and you know what? I loved it. Come at me, losers. You knew I was TV trash when you subscribed. Kisses! I promise it won’t be so long before the next one.

PS Did you see my footnote?

1. As a reminder, disinformation is false information distributed with the intent to mislead or deceive; misinformation is wrong information that’s distributed unknowingly or at least without malicious intent. Wow, my first Substack footnote!