Hyperpolarization Of Climate Policy – The Politics Of American Exceptionalism

Ramanan Krishnamoorti, UH Chief Energy Officer and Aparajita Datta, UH Research Scholar

The breakthrough in negotiations amongst Democrats in the U.S. Senate on the proposed climate bill surprised many and recentered the climate discussion across the nation. If the bill, also known as the Inflation Reduction Act of 2022, passes through budget reconciliation, it could potentially reduce U.S. emissions by 40% by 2030.

Despite the national security, economic and energy independence benefits the bill may lead to, it has not received any support from Republicans. Lawmakers from red states have remained unmoved on climate legislation for decades. The gridlock over climate change is not new but the scale of the legislative paralysis is. The right and the left are more polarized now than at any point in the last 50 years. Consequently, climate change has become a prime example of “American exceptionalism” – the idea that the U.S. is inherently different from other countries – in politics. The hyperpolarization threatens our way of life, the economy and our position as a global leader.

A few recurrent questions emerge in the current landscape. First, what are the limits to powers of the executive, legislative and judicial branches? Most recently, arguments by the Republicans against executive action on climate change were upheld by the Supreme Court’s conservative supermajority in its ruling on West Virginia v. EPA, which limits the agency’s regulatory authority over curbing greenhouse gas emissions from power plants. Interestingly, the view that it is Congress that must pass laws and allocate funding for climate action – and not the President and federal agencies – seems to be shared by a majority of Americans (61%). However, in a Congress of slim majorities, what does this divide mean for policymaking, and is there a rational middle ground for climate change policy in the U.S.?

In March, the U.S. Securities and Exchange Commission (SEC) proposed new climate disclosure rules that would require publicly traded U.S. companies to quantify, record and disclose climate-related risks and financial impacts in statements and annual reports. The proposed mandate aims to bolster investor confidence by providing accurate information on a company’s financial health and risks in a transparent and consistent format. Shortly after, SEC’s chairperson, Gary Gensler, said in an interview that “climate disclosures are already happening, and investors are already making use of information about climate risks. But there is no uniformity in how climate risk disclosures are made, making it difficult for investors to make meaningful comparisons. Companies and investors alike would benefit from clear rules of the road. Our role is to bring consistency and comparability.”

But Gensler, who was appointed by President Joe Biden, was met with quick opposition from his Republican colleagues. SEC Commissioner Hester Pierce opposed the proposed rules in a public statement titled “we are not the Securities and Environment Commission – at least not yet.”

The SEC invited public comments on the proposed rules between March 21 and June 17, and over 4,400 were submitted. We analyzed the comments using natural language processing (NLP) methods. Members of Congress submitted 14 comments, with 215 Republican and 152 Democrat lawmakers as signatories. We took a deeper dive into these comments through further qualitative and quantitative analysis.

The analysis[1] mapped the most likely topics in a document as a probability distribution. A cursory look at the analysis appeared to show some overlap between Republican and Democrat lawmakers. Although, a closer look at terms that were most likely to appear together like emissions, investor, climate, justice and environmental, revealed the divergent partisan priorities. The terms justice and environmental were not dominant themes in the Republican submissions, while the others highlight the exceptional partisan divide on the issue.

The sentiment and tone of the submissions from the Democrats indicate that they welcomed and supported the SEC’s efforts. However, they also proposed changes, citing that the rules do not go far enough to address material climate-related disclosure, specifically the inclusion of climate-related lobbying and influencing activities. U.S. Senator Sheldon Whitehouse, a Democrat from Rhode Island, called the omission stunning and a missed opportunity for the SEC.

In sharp contrast, Republicans asserted that the SEC lacks statutory authority to issue the proposed rules. The GOP contends that the new rules would violate the First Amendment, do not reflect reasoned decision-making and would fail an arbitrary and capricious review[2] by the courts. Both U.S. House and Senate Republicans argued in their letters to the SEC that unelected regulators at the SEC do not have the authority for policymaking — elected members of Congress do.

Their opinions were reinforced by the attorney generals of 24 Republican states in a supplemental submission to the SEC, citing the post-deadline development of the Supreme Court’s ruling in West Virginia v. EPA and urging the SEC to abandon the proposed rules. Before the ruling, the SEC had found a likely ally in the EPA. In a submission to the SEC, the EPA stated that it supports the proposed rules and the use of the Greenhouse Gas Reporting Program, and that the Commission has broad authority to promulgate disclosure requirements that are necessary or appropriate in the public interest or for the protection of investors.

One notable exception to this political divide was Senator Joe Manchin, a Democrat serving West Virginia. In a letter to chairperson Gensler, Manchin followed themes and sentiments expressed by congressional Republicans. Manchin stressed that he firmly believes that “the SEC has a duty and responsibility to every American to uphold their mission and prevent an unraveling of our U.S. economy; however, that duty and responsibility, unfortunately, becomes tainted when the Commission publishes rules that seemingly politicize a process aimed at assessing the financial health and compliance of a public company.”

With an equally polarized electorate, it is unsurprising that recent analyses from the Pew Research Center found that 82% of Republicans believe that Biden’s climate policies are taking the country in the wrong direction, while 79% of Democrats believe the president is moving the country in the right direction on climate change. The divide prevailed before Biden took office. A survey conducted by the University of Houston at the outset of the 2020 presidential elections found that a majority of respondents were concerned about climate change and supported emissions reduction, but the devil is in the details. While 96% percent of voters on the left were concerned about climate change, just over half of the respondents (58%) on the right reported the same. While this chasm may seem wide, the gap between right and left voters has been closing in recent years with growing bipartisan support among voters for the adoption of carbon management to mitigate climate change. What voters cannot agree on is how to decarbonize.

While Americans often bemoan the loss of bipartisanship in Washington, D.C., most are willing[3] to forgive undemocratic behavior to achieve their party’s policy goals and prize party loyalty over all else. Political maneuvering and corrosion of democratic processes follow from this: Issues like climate change are framed as zero-sum games — what one gains, another must lose. Consequently, we are left with problems that never get solved. Lawmakers and voters endlessly argue over the winners and losers of each policy proposition, leaving no room for a rational middle.

Meanwhile, the verdict from the reactions to the SEC’s proposed climate disclosure rules is clear. A new manifestation of the exceptional and untenable partisan divide on key policy issues is permeating across all branches of the government. The electorate and politicians have lost sight of the fact that when it comes to climate change, the collective goals of voters are becoming more aligned while the parties simultaneously move apart from the ideological center. In the absence of bipartisan efforts to reach a rational middle, the American exceptionalism in addressing climate change is likely to continue and wild swings of the policy pendulum should be anticipated.

^{[1] A Latent Dirichlet Allocation algorithm is an unsupervised learning algorithm that maps a user-specified number of topics shared by documents in a text corpus as a probability distribution.}

^{[2] The arbitrary-or-capricious test defined in the 1946 Administrative Procedure Act (APA), which instructs courts reviewing the actions of agencies to invalidate any rulemaking that they find to be “arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.”}

^{[3] The study found that only 3.5% of U.S. voters would cast ballots against their preferred candidates as a punishment for undemocratic behavior.}

Dr. Ramanan Krishnamoorti is the Chief Energy Officer at the University of Houston. Prior to his current position, Krishnamoorti served as interim vice president for research and technology transfer for UH and the UH System. During his tenure at the university, he has served as chair of the UH Cullen College of Engineering’s chemical and biomolecular engineering department, associate dean of research for engineering, professor of chemical and biomolecular engineering with affiliated appointments as professor of petroleum engineering and professor of chemistry. Dr. Krishnamoorti obtained his bachelor’s degree in chemical engineering from the Indian Institute of Technology Madras and doctoral degree in chemical engineering from Princeton University in 1994.

Aparajita Datta is a Research Scholar at UH Energy and a Ph.D. student in the Department of Political Science studying public policy and international relations. Her research is focused on policy diffusion and feedback analyses to improve energy equity and justice for low-income communities in the U.S. Aparajita holds a bachelor’s degree in computer science and engineering from the University of Petroleum and Energy Studies, India; and master’s degrees in energy management, and public policy from the University of Houston.