Tuesday, June 11, 2024

Climate not in the driver's seat

A newsletter from POLITICO for leaders building a sustainable future.
Jun 11, 2024 View in browser
 
The Long Game header

By Allison Prang and Jordan Wolman

With help from Scott Waldman and Alex Guillén

THE BIG IDEA

Traffic is steady as vehicles approach Hugh Carey tunnel linking Brooklyn to Manhattan, Feb. 7, 2024, in New York. New York Gov. Kathy Hochul is trying to raise taxes on businesses in the city to close a big budget gap that emerged after she halted a plan to charge drivers a toll to enter the center of Manhattan.

Gov. Kathy Hochul is backtracking on congestion pricing. | AP

BACKWARD SHUFFLE — Environment-minded voters already frustrated with what they see as Democrats’ insufficient commitment to the fight against global warming can’t be feeling any better in the wake of a pair of policy decisions that show political reality trumping high-minded agendas.

The Biden administration’s weakening of motor-vehicle fuel standards from an earlier proposal and New York Gov. Kathy Hochul’s shelving of a congestion pricing plan designed to discourage driving in Manhattan, as much as they suggest a swing away from climate goals, also reflect politicians’ need to balance those targets with other needs, especially in an election year. And they suggest a hesitancy to take big swings at Americans' love for driving.

The fuel-efficiency rollback, while seen as a win for industry, could also be viewed as an attempt to find a middle ground between environmental groups pushing for stronger standards and Republicans vowing to try to undo the rule in Congress.

For its part, the White House argued that the eased regulations will allow auto companies to focus more on electric vehicles, while also expressing concern that more aggressive regulations would drive up the cost of EVs at a rate that outpaces any fuel savings.

Still, SUVs and pick-up trucks will now see only modest fuel economy improvements — but the move allows the administration to avoid yet another election-year headline about the impact of its regulatory agenda on high prices.

"It looks like the left hand knew what the right hand was doing. That’s the kind of coordination we recommended," said John Bozzella, president and CEO of the Alliance for Automotive Innovation. "So that’s good and appreciated."

The approach was challenged by Albert Gore III, executive director of the Zero Emission Transportation Association, who said the National Highway Traffic Safety Administration’s final rule fell “short of what is possible.”

“I’ve always been a bit skeptical of the proposition that we need to keep making inefficient trucks and SUVs in order to finance the development of EV technology and deployment of EV technology,” Gore said. “It seems like we oughta be doing everything we can to produce cleaner vehicles across the board and regardless of power train.”

Hochul's last-minute move to pause New York's congestion pricing plan, which was influenced by the program's unpopularity in competitive suburban House districts that Democrats can ill afford to lose, raised concerns among environmentalists that it could freeze out other large cities like San Francisco and Los Angeles that were looking at implementing similar policies.

“It was always this sense of well, we'll get to see how New York's going and we'll learn from that as we go to implement our program here,” said Stuart Cohen, co-founder and senior adviser for TransForm, a California-based public transportation advocacy group. “And so yeah, this will absolutely take the wind out of the sails of pricing programs across the country, but especially on the West Coast.”

Travis Brouwer, assistant director at Oregon’s Department of Transportation, said his state had similar challenges in getting a tolling program up and running, and that New York’s plan could’ve helped revive Oregon’s idea.

“My overall takeaway is: It's really difficult to develop new ways of paying for transportation, particularly when routes that were previously free, or low cost, are now going to cost commuters a lot more,” he said.

Some environmental activists — on both the fuel efficiency standards and New York’s congestion pricing debacle — are being careful in expressing dismay. The Sierra Club, for example, underscored the benefits of the new fuel standards, while the Natural Resources Defense Council touted the administration’s other efforts to curb pollution.

“The Biden administration’s clean vehicle and transportation policies are steering us to a better future one with lower costs and more options for drivers and commuters and much less of the pollution that's driving climate change,” said Luke Tonachel, senior transportation strategist at the NRDC.

Same goes for congestion pricing in New York. Tonachel said that the program is important for the city’s transit system and needs “to get back on track.”

“We also have to recognize that there are other efforts to reduce pollution in terms of the cleaning up of vehicles and the investment from the bipartisan infrastructure law and the Inflation Reduction Act to boost the options for commuters and to make improvements to our transit systems across the country,” he said.

WASHINGTON WATCH

ESG ESCALATION — Some of the biggest targets in the battle against environmental, social and governance principles will be under Republicans’ microscope on Wednesday at the Capitol.

Officials from an investment firm facing a lawsuit from Exxon, the sustainability nonprofit Ceres and the country’s largest public pension fund — California’s employees’ retirement system — will face questioning from a House panel on the role of antitrust law in deterring “anticompetitive collusion to promote ESG-related goals.”

The hearing comes after more than a year of subpoenas from House Judiciary Chair Jim Jordan in a crusade against corporate net-zero pledges that are compiled in industry groups like Climate Action 100+ and the Glasgow Financial Alliance for Net Zero.

Ceres CEO and President Mindy Lubber plans to testify tomorrow that the group has produced more than 90,000 pages of documents following Jordan’s subpoena last year and that Ceres firmly disagrees with Jordan’s assertion that it “appears to facilitate collusion.”

Rep. Sean Casten (D-Ill.), co-chair of the Congressional Sustainable Investment Caucus, said in a statement that the caucus “assisted” Judiciary Democrats in preparing for the hearing and that he expects Democrats to “focus on protecting free-market principles of consumer choice and investor freedom while pushing back on the expected Republican misinformation.”

Whether companies are actually running afoul of competition law through sustainability initiatives — and a number of government officials and lawyers think it’s fair play — the market impact is real. Insurers and asset managers alike have quit net-zero groups at least in part over antitrust concerns.

SHAREHOLDER SCOREBOARD

EXPANDED CHOICE — BlackRock is expanding the suite of options investors can choose from as part of a program that gives shareholders a say in how they vote on proxy proposals, Declan Harty reports.

The company's Voting Choice program starting next month will offer two new options, one of which is a “Wealth-Focused Policy” option developed by proxy advisory firm Egan-Jones that would oppose proposals aimed at promoting diversity, equity and inclusion or protecting the environment by curbing greenhouse gas emissions.

The other new option aims to strike a balance between the Egan-Jones-developed policy and the new Wealth-Focused offering.

BlackRock's expansion of Voting Choice, which was initiated more than two and a half years ago, comes as the company continues to be one of the biggest targets of Republican attacks on ESG.

The asset manager said the two new offerings — which brings the total included in Voting Choice to 16 — was an attempt “to meet client demand.”

YOU TELL US

GAME ON — Welcome to the Long Game, where we tell you about the latest on efforts to shape our future. Join us every Tuesday as we keep you in the loop on the world of sustainability.

Team Sustainability is editor Greg Mott and reporters Jordan Wolman and Allison Prang. Reach us all at gmott@politico.com, jwolman@politico.com and aprang@politico.com.

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WHAT WE'RE CLICKING

— Billionaire Bill Gates is behind a Wyoming project to build a novel type of nuclear reactor designed to produce emissions-free electricity, The New York Times reports.

The Washington Post reports that researchers have detected the first-ever significant decline in the level of hydrochlorofluorocarbons in the atmosphere.

— The Atlantic is devoting its July/August edition to the issue of climate change, highlighted by George Packer’s rumination on Phoenix as a vision of America’s future.

 

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