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Renewables get a corporate lobby

Last Thursday, I heard some of the best news I have heard in months: Some major renewable energy companies are investing in a new lobbying apparatus meant to shape federal policy to be more renewable-friendly.

 

As Bloomberg's Brian Eckhouse reports, the organization, called the American Clean Power Association, brings together large utility company conglomerates like NextEra, Berkshire Hathaway Energy, and Avangrid, and the 46-year-old American Wind Energy Association is folding and merging with the new group to build its strength. Xcel Energy, the first utility company to commit to 100 percent clean energy, is also on board.

 

The Solar Energy Industries Association, a lobbying group focused on solar that's currently the biggest corporate lobbying force for renewables, is staying independent but told Bloomberg it would work with the new group.

 

This is not a charitable endeavor. NextEra grew out of Florida's electrical utility, Florida Power & Light, and now owns a bevy of similar firms; BH Energy and Avangrid are similar. These are large corporations that are investing in lobbying to secure their major lines of business. And as Emma Foehringer Merchant at GTM notes, the move is mostly an indication of a "growing consensus in the energy industry that renewables will have a central role in the future of grid power."

 

The kind of liberals who care about climate change tend to also recoil at corporate lobbying. But as someone who cares about moving to 100 percent clean energy in the US, the mercenary nature of this new lobbying endeavor makes me even more enthusiastic about it.

 

Many philanthropists are interested in combating climate change or boosting renewable energy as causes. But philanthropy can be fickle. Donors' attention spans are short and their interests can be mercurial.

 

The oil, natural gas, and coal companies that fund fossil fuel lobbyists are more consistent and committed. If the fight is between the American Petroleum Institute and Mike Bloomberg, who has funneled billions into the climate cause, I would tend to place my bets on API. Bloomberg cares about a lot of other topics — gun control, for one — and he won't live forever. ExxonMobil, by contrast, will probably outlive me.

 

But a utility company that wants renewable energy to get tons of subsidies out of pure self-interest? That's a political force I can trust. As long as there are companies with shareholders standing to benefit from additional renewable subsidies, those companies and their shareholders will have an interest in funding pro-renewable lobbying.

 

My favorite book on lobbying, Lobbying and Policy Change by Frank Baumgartner, Jeffrey Berry, Marie Hojnacki, David Kimball, and Beth Leech, suggests that lobbying for new action works a lot less often than you'd imagine. That's both because the American political system has deep status quo biases that push against change of any nature, but also because the two sides in lobbying fights tend to be pretty evenly matched. They fight each other to a standstill, which means little changes.

 

Policy change does happen when there's a sudden change to this equilibrium, perhaps when one side that used to be much smaller starts to rival its larger opponent. That seems to be what's happening with clean energy due to the falling price of solar, wind, and batteries. The core economics of the sector are improving rapidly (in part due to decades of government support), which means that while solar power would've seemed impossibly weak next to the American Petroleum Institute in 1998, the same isn't true in 2020.

 

Aiding this shift, of course, are activists like Greta Thunberg and groups like the Sunrise Movement who are in the streets trying to put a concrete price on inaction. But you need both people and money to change policy. And the increased profitability of renewables seems like it could lead directly to more renewable-friendly policy by funding a big change to the lobbying balance of power in DC.

 

* * * 

 

This renewables story inspired me to read a couple of new articles on policy change that seemed like FP subscriber catnip. Princeton's Ben Hammond and Leah Rosenstiel have an incredibly important paper on measuring the effect of political actors (like members of Congress) on spending. Typically, studies on this have used actual spending, rather than appropriations bills, as the outcome of interest.

 

But Hammond and Rosenstiel persuasively demonstrate that it's better to use numbers on appropriated spending, rather than actual outlays. Actual spending is the result of years of previous appropriations bills; fiscal year 2009 appropriations on military construction for the Army, for instance, were still being spent as late as 2013, and 16 percent of money appropriated in 2009 wasn't spent that year. So if you're looking at spending in, say, 2020, you're not just evaluating the spending choices of members of Congress in 2020, but the choices made in 2019, 2018, and beyond.

 

To focus on what current members' influence is, you have to look at appropriations. Hammond and Rosenstiel show that using their corrected method, there's strong evidence of members of Congress using their roles on the defense appropriations subcommittee to direct pork barrel spending toward their districts. Districts get nine times as much in appropriations when their members of Congress are on the subcommittee than when their members aren't on it. The noisier spending data, by contrast, suggests no effect.

 

It's a very clever paper on how a seemingly insignificant distinction — like that between "appropriations" and "outlays" — can actually be incredibly important.

 

***

 

This next paper I have no idea how to make sense of.

 

From UT Austin's Laura Quaglia, Derek Epp, and Katherine Madel, the paper creates a massive new dataset of over 7,700 Congressional Budget Office estimates of the cost of congressional bills. Quaglia, Epp, and Madel then construct several models to see if Republican members of Congress propose less expensive bills, or more bills with spending cuts, than Democrats.

 

Their conclusion, which baffles me and goes against their initial hypothesis, is "not really." Republicans are 0.2 percent less likely to propose bills with new spending, and 0.4 percent more likely to propose spending cuts, than Democrats, they find; but on average, Republicans propose bills that cost 0.4 percent more. There just doesn't seem to be a huge partisan effect on proposed spending.

 

This all holds even if you drill down by topic. "For bills pertaining to social welfare, the environment, community development, and national defense, Democrats and Republicans are statistically indistinguishable," the authors write.

 

I have a couple of theories on what's happening here. One is that the finding might be an artifact of looking at all CBO estimates. The vast majority of bills scored by the CBO don't go anywhere. What you ultimately care about are the bills that are passed, but passage is so rare that it's hard to extrapolate from just that data.

 

You could also look at bills that passed or that the leaders of the House/Senate tried hard to pass (like the Gang of Eight immigration bill or the Waxman-Markey cap and trade bill) to get a bigger sample of "big bills," but that's a subjective designation that's almost impossible to put into practice.

 

But my other theory is that raw spending dollars might matter less than it seems. Quaglia, Epp, and Madel's example of the most expensive bill in their dataset was from a Republican, former Rep. Jim McCrery of Louisiana, who proposed a Social Security privatization measure called the Growing Real Ownership for Workers Act of 2005 that, the authors explain, "would have created individual retirement accounts for almost 200 million workers and transfer nearly $1 trillion in federal funds into those funds."

 

That's definitely … something, but I don't really think it's big-spending liberalism. The proposal has a definite conservative valence, despite proposing $1 trillion in new spending. So perhaps spending statistics just aren't a very reliable indicator of whether a plan is liberal or conservative.

 

* * * 

 

Finally, something totally different: A new season of the Future Perfect podcast launches next week, on September 16! Our trailer drops Wednesday; be sure to listen to find out what this season is all about. So subscribe now to the Future Perfect podcast!

 

—Dylan Matthews, @dylanmatt

 

 
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