Understanding the politics and loopholes in Biden's Chinese EV tariffs

On the heels of a climate and energy rules blitz, President Biden has announced a plan to quadruple existing tariffs on Chinese EVs — from 25 all the way up to 100 percent — and dramatically hike tariffs on Chinese solar cells, batteries, and critical minerals as well.

While these numbers look huge on paper, loopholes and caveats in the policy will likely dilute their impact.

On this episode of Political Climate, hosts Julia Pyper, Brandon Hurlbut, and Emily Domenech debate whether the tariffs will boost American EV and solar production, or if they add up to little more than political posturing.

Then they zoom out to consider a series of new polls showing that despite the President’s wide-ranging efforts — and $1.6 trillion of funds in the IRA — a plurality of voters appear unaware of Biden’s efforts to fight climate change. 

The show wraps up with some rapid fire hot takes in our new segment “The Mark-up.” 

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Transcript

Julia Pyper: Brandon, I heard you went to a Pearl Jam concert recently. Do you know if it was low carbon? One of those low carbon stadiums?

Brandon Hurlbut: Well, they are very active on having a green tour. I was at the forum for the show literally eight hours ago, and-

Julia Pyper: I can hear a little something in your voice.

Brandon Hurlbut: Yeah, yeah. I have a great history with the band. They're my favorite band of all time, and I gave them a White House tour when I worked in the White House.

Julia Pyper: Wow.

Brandon Hurlbut: And talked to them about climate policy and kept up with them.

Julia Pyper: That's a fun fact.

Welcome to Political Climate. I'm Julia Pyper. On the heels of a climate and energy rules blitz, President Biden has announced a plan to quadruple existing tariffs on Chinese EVs from 25 all the way up to 100%, and that's not all. Tariffs on Chinese solar cells, batteries, and critical minerals will jump dramatically too, yet loopholes and caveats in the tariffs will complicate and likely minimize their impact.

This week. Can the tariffs actually boost American EV and solar production, or do they add up to a little more than political posturing? Later in the show, recent polling spells trouble for Biden's record on climate. Despite all the president's bold new rules and $1.6 trillion of funds in the IRA, the Inflation Reduction Act, a plurality of voters appear unaware of Biden's efforts to fight climate change. How can Biden move the needle with less than six months to go before the election, and can climate even really be an election driver? Finally, we'll end with our rapid fire segment, The Markup. That's all in the hopper for this episode of Political Climate.

I'm joined by my co-hosts as usual, Brandon Hurlbut and Emily Domenech. Brandon served as chief of staff in President Obama's Energy Department and went on to found Boundary Stone Partners and Overture VC. Hello, Brandon.

Brandon Hurlbut: Hey, Julia. Good morning.

Julia Pyper: What do you call a Pearl Jam fan? A Pearl?

Brandon Hurlbut: Old.

Julia Pyper: Pearlhead?

Brandon Hurlbut: When they sing Alive, it has a new meaning. It's like, we're all still alive. This is a good thing.

Julia Pyper: Excellent. Right. Emily served as Senior Energy Advisor to Speakers of the House Kevin McCarthy and Mike Johnson, and now as a senior Vice President at Boundary Stone. Hi, Emily. How are you?

Emily Domenech: Hey all. How are you doing?

Julia Pyper: We are going to get into tariffs, trade, what that means for the clean energy economy here in the United States. But before we jump into that, I did want to take a moment to flag that FERC, the Federal Energy Regulatory Commission dropped two huge new rulings in the past week that overhaul a process for planning and paying for transmission lines, which will help get new clean energy generation hooked up to the grid faster and transported to where it's needed. We've talked a lot on this show already in our reboot about permitting, interconnection, getting these projects deployed, deployed, deployed. So this is a new groundbreaking outcome from FERC, as much as FERC outcomes are groundbreaking, in the following ways.

So Order 1977 gives FERC the authority to grant permits to electric transmission lines in certain instances where states do not act first. And you know this is a big deal for FERC because they gave it an important number. So 1977 is actually the year that FERC was created. Regulators also released Order 1920, which happens to be the year that FERC's predecessor, the Federal Power Commission, was created. And this is an even larger rule that requires transmission planners to adopt a 20-year planning horizon that accounts for expected shifts in how electricity is produced and considers a range of benefits related to building and upgrading power lines. Order 1920 also establishes a default cost allocation process for multi-state transmission lines. Again, the idea here to usher things along by setting some new rules of the road. This is the culmination of some three years of work and 15,000 or so public comments. It's also not without challenges, however. Critics of the rule argue it could force states that don't want clean energy to still have to pay for it.

We'll save a deep dive on FERC for our future episode. In the meantime, Emily and Brandon, I did want to get your 30,000-foot view. What's your 30,000-foot takeaway on this?

Emily Domenech: I think the 30,000-foot takeaway here is that this rule is far from settled despite being final rule because I think there is really going to be some pretty significant litigation and Republican pushback on how it was structured.

This is a rule that moved on a party line vote. FERC is often, you'd say, bipartisan panel and they do a lot of things in a bipartisan basis. And this got not just objections, but really strong objections from Commissioner Mark Christie, who is the Republican appointee on FERC, who basically looked at the rule and said he's concerned about it being an overreach beyond FERC's congressionally-mandated mission and perhaps impeding on state supremacy here. So I think you're going to see a continued pushback on this rule based on whether or not... Does this fall in the space that Congress has outlined for FERC to operate, and is it meeting that congressional intent and does it override the state's rights in this space?

We've had a number of Republican states's attorneys general who have said that they plan to file lawsuits on the rule, and just to kind of give the big picture of what people's concerns are here, I think number one, I think people are concerned about the 20-year planning arc being too long, too difficult to manage. I make a lot of jokes about we're pretty bad at predicting what our energy needs are long into the future. We certainly couldn't have predicted the big growth in demand from artificial intelligence or data processing or any of the things we've seen come on online in the past five years. So that 20-year arc I think is something that I think people are concerned we won't manage well or we won't weigh the future demands of the grid in the right way.

And then I think the second question is how do we deal with costs? That preliminary cost allocation rule is really the big kicker for Republicans on how we manage the cost of these multi-state transmission lines. And I really question the sustainability of a rule that sets up a system where you can end up with North Dakota paying for California's transmission. I think that's something that I think you'll see republicans continue to be concerned about.

Everybody agrees we need to build more things and nobody agrees on how we should do it, and that's why these issues are tough, and frankly I think why Congress really needs to take the lead on this rather than the regulatory agencies because that's when you get bipartisan agreement that you have to move things forward.

Julia Pyper: Brandon, what's your hot take on FERC?

Brandon Hurlbut: Julia, you asked for the 30,000-foot level. We have major problems deploying renewable energy projects. One is the interconnection queue. Right now, the number of projects in that queue is double the size of the existing grid and 90% of those projects are renewables. So we have an interconnection problem. The second problem is we're not able to build these high voltage transmission lines, and that's what FERC is trying to solve for.

Emily mentioned 20-year planning. One of the things this rule does is require them to update every five years rather than 10. So I think they're trying to be taking new developments into account. That's a good thing. Coming up with ways to allocate costs, a default method when there's disagreements. I think this is all helpful and it's going to get more renewable energy onto the grid. And you talked about FERC Order 1920. Let's not forget the other FERC rule, which gives them the authority to permit transmission lines in the national interest transmission corridors, and DOE has designated 10 of these corridors recently. So FERC has the authority to permit in those corridors even when a state has denied the application.

Julia Pyper: Well, I think this, again, could deserve an episode of its own. We'll park it there. Let's talk tariffs.

On May 14th, President Biden directed the US trade representative to increase tariffs under Section 301 of the Trade Act of 1974 on $18 billion worth of imports from China. Notably, tariffs were raised on several clean energy products and supply chains. The administration also announced, however, the establishment of a process to exempt tariffs on machinery used in domestic manufacturing, particularly equipment used in the solar sector. Most of the additional tariffs will take effect in 2024, while others will take effect in 2025 and 2026.

Chinese-made lithium ion batteries will see tariffs rise to 25% in 2024 this year, while Chinese-made lithium ion batteries for grid storage, heavy duty transport, and other applications, they'll see that jump to 25% tariff in 2026. Chinese-made steel and aluminum will also have a 25% tariff on top of other existing tariffs. Chinese-made solar cells and semiconductors will each have a 50% tariff under the new Biden directive, and Chinese-made EVs will have a 100% tariff, which has made a lot of news because it'll effectively discourage anyone from buying one of those vehicles.

Now, I want to point out that the Chinese EV market is exploding right now, much more than in the US. The BYD Seagull, the cheapest EV on the market, costs about 9,700 US dollars. That's remarkably low. China sold 6.8 million EVs in 2022 alone, and their models make up around 58% of all global EV sales. Very few Chinese EVs are sold in the US today, but there are fears of a flood.

I think it's also important to recognize that Biden's policy didn't come out of nowhere. It builds on decades of clean energy trade disputes and tariffs created by President Trump. It's actually a point where the two administrations are somewhat aligned, so I'm interested to see what you all make of this and where the nation is really going on trade.

Some of these tariffs look huge on paper, that 100% tariff on EVs for instance, but nuances in the policy do dampen its impact. As Heatmap news reported, it might not even impact the small number of existing importers like Volvo, which is owned by the Chinese company Geely because Volvo has US-based operations, so there are some workarounds. Plus, 80% of the solar cells that the US imports come from Chinese companies operating in other countries, so the policy doesn't seem to apply to them either.

So Brandon, let's go to you first. Is this the right formula? Tariffs plus tax credits to give American manufacturers the boost they need to compete with China. Do we have the carrot and stick appropriately aligning here, or is there a risk of slowing deployment in the meantime and recognizing this could harm our climate goals in the interim?

Brandon Hurlbut: That's the thorny issue Julia, and there's a lot of division even within Democrats. I had dinner this week with a clean energy OG who has spent a lot of time abroad seeing these EVs that you're talking about that are manufactured in China, and he's vehemently opposed to this tariff policy because the mindset of many in the climate community is there's a shot clock. We got to hit major targets by 2030. It's going to take a long time to develop this supply chain. We got to deploy as fast as we can, and the key to deploying is the cheaper the product, the better. So if we can get cheap products from abroad, we should be using those.

On the other hand, we hollowed out all these towns in the Midwest. I think that's part of the reason MAGA came about was losing all these manufacturing jobs, and Joe Biden's trying to bring those back and there's a history of many countries having certain industries that they protect like steel, like iron, like auto. Europe is very protective of their auto industry. So that's what they're trying to do here, is really play the long game and build up this supply chain.

Julia Pyper: Emily, what's your gut reaction on this? I mean, this broad movement to higher tariffs is something President Trump supports. He said, I think, he would double down. I think at one point he said he put a tariff on literally everything coming from China. So what do you make of this?

Emily Domenech: So I think there's two things happening here. One, it's an election year and I think President Biden is under a lot of pressure to appear to be tough on China. I think that is something that's absolutely become a nonpartisan issue, and he's getting pressure from both the left and the right to move in this direction, so it doesn't surprise me that tariffs were on the agenda for this year.

I think my big concern when I look at the tariff structure is that the only place where you really see 100% tariff right out of the gate is on the Chinese EV manufacturers, which were already not really being sold in the United States because they had a pretty hefty tariff on them already. So I don't see there being a really big immediate impact here because a lot of the other tariffs are phased in over time. And my concern is that by phasing them in over time, by starting at 25% and moving them up to 50 and higher in the next two years, you allow China the time to continue to undercut those markets, to lower their prices temporarily, to take over the market in whole, and then in two years we get to a point where we have our manufacturers saying, "Well, what are we supposed to do? This new US market didn't come to fruition and if we don't extend this grace period, we'll be screwed in the future."

So I think it's a little bit of a, "We want to look strong right now. We're going into an election year. Trump's really tough on China, so we need to look like we're tough on China too," but I am skeptical about the real implementation of it having as big of an impact as folks think. That's the goal is that you think tariffs are the right way to keep China out of the market, then do it now. Why phase it in? Make it more expensive now so that you drive that market production here. Because we all know that China often can take a short-term cut to make their things so cheap that tariffs don't matter. They do it all the time. They flood markets. They're doing it with critical minerals now. It's something we know they can do with the structure of their economy, certainly over a two-year period of time.

Julia Pyper: Brandon, what would you have to add on this?

Brandon Hurlbut: So a few things on just the jobs aspect of this for manufacturing. E2, which I think is a conservative-leaning group, put out a study saying they think EVs will be the second leading source of clean energy jobs. As far as solar manufacturing jobs, 34,000 jobs have been announced after the IRA with large facilities in Arizona, Georgia, Michigan, and Ohio.

And another reason why we're protective of solar, I want to remind our listeners how much solar is winning. We talk about, can we meet this demand, this surge of demand in the US from AI? The surge in demand is happening in developing countries and globally last year, 446 gigawatts of solar was deployed across the world. You know how many gigawatts of new natural gas we did in the US last year? 8.6. Solar is going to win. That's going to be a big source of our electricity in the future. It is now and will be larger going forward. And so the question is, do we want to be dependent on China for that critical product? People wonder how are we going to meet this demand. We are going to meet it with solar, I think. We can, just like the rest of the world is. And so it's a really important thing for our country, and that's why this is a really thorny debate.

Julia Pyper: What about the national security piece? Parking climate considerations a moment, is there a real threat posed by Chinese-made EVs and frankly Chinese-made equipment writ large? Is that something that we should be truly concerned about? Is it real or is it overstated?

Emily Domenech: I think it absolutely is real. You don't need to be a national security expert to realize that China controlling the supply chain is a real problem. I think if you end up with major manufacturing moving overseas, that loses you capacity not just on the civilian side and in your economic growth, but frankly also in the ability to secure those supply chains and build the things you might need in a time of war in the future.

I'd also say just on the climate perspective, when we're offshoring these jobs and this manufacturing capacity to China, let's not kid ourselves. They're powering it with coal, and they're powering it with coal, not only without carbon capture. They don't care about the noxious pollutants either. So when we outsource our manufacturing and our industrial base to other countries, we have no way of knowing what the impact's going to be, not just on the environment but on global security.

Julia Pyper: Brandon, do you have any other inside scoops for us? I know Boundary Stone is one of the experts at your firm more broadly on these issues of rebooting American domestic manufacturing. Any other intel?

Brandon Hurlbut: Yeah, one of our colleagues, Mike Carr, is testifying today on this, and one of the things that we've talked about is apparently many of these developers have stockpiled a lot of Chinese panels that are waiting to get deployed in this queue. So for the next couple of years, regardless, we'll probably be deploying cheap Chinese panels that were purchased before.

Emily Domenech: Well, and that's the idea of the Section 201 removing the bifacial module exclusion. They want to do that. That's one of the few things that's happening immediately because they want to prevent that stockpiling of Chinese supply.

Julia Pyper: Right. So just to add to that, so shortly after announcing these 301 tariffs we're talking about on EVs and other products, aluminum, steel, and solar products, but not solar manufacturing equipment, the Biden administration reinstated a separate 15% tariff under Section 201 on all bifacial or two-sided solar panels, regardless of their country of origin. So this is even more broad.

The White House said these tariffs will take effect imminently, although I think there's something like a 90-day window to bake in. Emily, you can keep me honest and Brandon on how exactly that works. That 90-day window allows you to exempt panels that are already imported under existing contracts, so a little bit of leeway there. This update will have wide reach as bifacial panels are reported to now count for something like 98% of all imported solar panels or at least 90-plus percent. The market has shifted to that technology, particularly in the large scale solar project sector.

I'll also add that the market, I think to your point, Brandon, has changed a lot since the bifacial exemption was first allowed a couple years ago. At that time, COVID supply chain was really constrained. There was inflation, costs were high, the products themselves were really costly, and so I think there was a fear of deterring deployment too much. So the Biden administration allowed this bifacial exemption, but here we are. I'll also note that was before the Inflation Reduction Act, so there was less of a budding domestic manufacturing base to even protect at that time. So we talked about the fact that there are these new tariffs on lithium ion batteries, but the non-EV lithium ion batteries for stationary storage for instance, and some critical minerals, those tariffs don't kick in until 2026. So what's the significance of that delay? Does that strike the right balance?

Brandon Hurlbut: Yeah, we don't have these minerals here.

Julia Pyper: Right.

Brandon Hurlbut: We're not mining them yet. We don't have access to them. We don't really have a choice. So it's a way to allow us some time to stand that up and do some on-shoring with friendly countries as well. They're pursuing-

Julia Pyper: Canada, we're I'm from.

Brandon Hurlbut: Yeah. Australia. So yes, I think that's a healthy compromise.

Emily Domenech: I would just love to comment here though that if you really believe that China is a threat to the supply chain, then my take would be why are we delaying? If we're going to delay, then we need to be doing the things... To Brandon's point, "Oh, we don't have the minerals here, we don't have the mining processing here." Well, we don't have that capability here because of our permitting process. So it ends up sounding a little bit like you want to have your cake and eat it too. This is where we end up with people at the end of the day being confused and saying, "Hey, is this just an election play?" And we're going to end up with exclusions and exemptions, so these policies that get passed around so that people can continue to bring China's materials into our supply chain. I think that's where you get those questions.

Julia Pyper: Brandon, what do you think? Is it entirely an election play? I mean, we know it's timed for the election, but-

Brandon Hurlbut: No. They're trying to strike this balance between we want to deploy as quickly as we can to meet our climate goals, and we also want to have this domestic industrial base. So they're trying to thread the needle on that and it's hard. Now, is the UAW happy about this? Yes. Does that help in the election? Absolutely.

Emily Domenech: I would say I think there is certainly some election strategy here, obviously. Being anti-China is one of Trump's more salient issues. This allows him to appeal to those heartland states with that heavy manufacturing base, and then at the same time delay and provide loopholes so that they have flexibility in the policy. On EVs generally, I feel like the administration has tried to play both sides of the issue to see what sticks and what works. I think it's an interesting strategy and I'm really curious to see if the voters go for it.

Brandon Hurlbut: My question to Emily would be, what would you really do differently? How would you meet these climate goals and also stand up this domestic industrial base? What would the Republicans do differently?

Emily Domenech: So I think there's a lot of similarity on the tariff approach because frankly, President Trump is the lead of the Republican Party and he is pretty populist and pretty pro-tariff. I think you see disagreements is Republicans always come back around to, well, if we want to compete with China, we need to figure out how to make things in a way that's cheaper and cleaner at the same time. We don't want to be increasing prices for regular Americans because then they just won't buy EVs. They'll buy used cars. There's a whole culture in America of people who only buy used vehicles. If they're told you've got to buy a brand new EV from Tesla, they're never going to do it.

So figuring out ways to get the American people better options and more options, I think in my mind, it's the more sustainable approach, and it works internationally too. China doesn't care if it's cleaner, but they do care if it's cheaper, and that helps us with the global emissions picture.

Brandon Hurlbut: We could be heading to a world that looks much like the Cold War where you had this big East-West divide and the products you had access to depended on which country you lived in. So in Asia, you have access to these Chinese-made EVs. In the West, in Europe, you're just going to have your BMWs and Volkswagens, and the US, you're going to have your GM, Ford. So that's more like a macro development that we could be witnessing in real time.

Emily Domenech: I completely agree. Whether or not Europe decides to fully align itself with a more protectionist US policy is really going to determine what the global market looks like.

Julia Pyper: History in the making. So talking about the politics, let's turn our attention to the polls that undermine Biden's efforts on climate.

Last month, CBS released a poll showing that even among Americans who view climate change as a top issue, nearly half say they've heard or read little or nothing about the president's efforts to affect climate change. Only 10% of those same voters say they've heard or read a lot about his policies. A separate Politico poll hammered home that worrisome message for the president. Only one quarter of all voters polled thought infrastructure spending had a major impact on their community. Half of respondents said it had zero effect or that they didn't know one way or another. Not the numbers the administration likely wants.

So Brandon, let's go to you first on the Democrat side. Were you surprised to see these numbers so low?

Brandon Hurlbut: No. I have bad news and I guess less bad news. The bad news is I have many friends running campaigns around the country and they do internal polling, and when they're polling for their candidates, they always throw a head to head on there, Biden versus Trump. And I've been privy to some of these numbers and it's worse than we think. There are several states that have been pretty reliably blue the last several election cycles where they're in play right now. So right now things are not great, but we have a lot of time and many things will change between now and November.

And I guess the poll where I take the... This is the less bad news, is the people who will decide this election are not paying attention. So they will tune in at the very end. I mean, we talk about this stuff all the time. We're reading this stuff, our friends are talking about it, but a poll that I saw showed that for people who read newspapers, Biden's up 11 points. For people who consume their news digitally, it's about a toss-up. For people that are not paying attention at all, Trump's up 53-27. So those people who are not paying attention will tune in the fall. They will decide the fate of the Republic, and hopefully we can get to them and convince them.

Julia Pyper: Yeah. Brandon, I think you're talking about that NBC news poll. To what extent do you think climate and energy can move those voters who are not tuned in right now? This is a large part of the Biden administration's entire, not just campaign, but his legacy. They have genuinely moved the needle on clean energy development, deployment, now manufacturing as we've discussed. Is that even a winning issue though? Can it resonate with voters, or is it just too complex by nature to actually make it to the voters at the voting booth?

Brandon Hurlbut: I think it depends on the voter. For most voters, I think the reindustrialization, building out manufacturing jobs, the economic impacts of those policies could be very persuasive. For young people, we've known that climate is a top issue for young people, and Biden is bleeding young people. Many of them just think he's too old. Some of them are off about the Middle East, but climate could be a way back with them. So that's the hope, but we need to get those young people back. That's the key to getting those polling numbers back up.

Julia Pyper: I want to get Emily's thoughts here, but I just want to note that the CBS poll says that Independents agree with Trump's view on climate more than Biden's by 34% versus 26 for Biden, and the same on energy. About 40% of independents align with Trump's position on energy versus Biden's at 24%. The remainder of those Independents said neither of them. Emily, what are your thoughts on all this?

Emily Domenech: I just want to zoom out a little bit here on a couple of points. One, I think the reason you see people who are saying, "I don't know if the Infrastructure Bill did anything for me," part of one of the things that House Republicans complained about that bill, which is that it didn't put enough money towards traditional infrastructure. Roads, bridges, ports, waterways, the kinds of things that make the biggest difference in most communities. So if you're in a community where your main highway still needs repair, maybe you don't care that much about a clean energy project down the road because you don't see the kind of investment in your community that you would've expected out of something that was called the Infrastructure Bill.

I think the other thing that we tend to see is that voters consistently, and this is true on both sides of the aisle now, consistently say that they care about the climate. They support clean energy. A 2023 Pew research study said that 60% of Americans support prioritizing clean energy development. Well, that's great, but an AP study about a month ago said that 68% of Americans wouldn't even be willing to pay $10 more a month in their utility bill to fight climate change. It brings it back to a point that I make here on this podcast all the time, which is that our solutions don't work if they drive up electricity prices because people won't choose them.

Brandon Hurlbut: The good news though is clean energy is cheaper. The increase in those prices is not on the generation side as we've talked about.

Emily Domenech: But the bad news is that electricity prices have gone up by 30% since Trump was in office. So if that's your message, that it's cheaper, some places it is, but it's not cheaper across the country. And so regular Americans who, to your point, are not reading about this every day, they're not listening to permitting pod like the rest of us, what they're seeing is that their electricity prices have gone up, their food prices have gone up, it's harder for them to put gas in their car, and they're concerned about the economy. So if those are the things that you see on a daily basis and add in that, oh, hey, my road is not repaired, then maybe you don't take this as the top issue when you go into your polling place.

Julia Pyper: I think there's a substance versus messaging issue here, because again, you're talking about inflation. I do also want to note that the Bipartisan Infrastructure Law invests over $300 billion in repairing and rebuilding America's roads and bridges, which was stated to be the largest investment since President Eisenhower's investment in the interstate highway system overall. So Brandon, to close this section, what's your current feeling as we march toward November? Seeing these polling numbers, what do you think has to happen from here?

Brandon Hurlbut: We got a lot of work to do. That's my perspective. We got to roll up the sleeves, so I'm encouraging all of you out there. The best way to deal with the polls is get out there. Do the work.

Julia Pyper: All right, let's turn now to our final segment. Let's wrap up with The Markup. At the end of each episode, Emily, Brandon, and I each bring a story, anecdote, or observation to discuss and debate. Let's see what we've got this time. Emily, let's go to you first.

Emily Domenech: For my markup this week, I want to borrow from the fellows over at the Ruthless Podcast. As a good Republican, Ruthless Pod is one of my favorites, but I think there's probably, other than my four friends, maybe zero overlap between our listenership and their audience, so I think I can safely borrow this. But last week they talked about how in a Washington Post article talking about ways regular people can combat climate change, a senior fellow at the American Council for An Energy-Efficient Economy was quoted suggesting that people should take cold showers instead of hot showers to reduce emissions and water waste.

Now, I know there are athletes out there who advocate for cold showers for health reasons, but are we really expecting regular Americans to take cold showers for climate change? I'm not doing that, and I spent years in working on energy and climate issues here. So my question for my co-hosts is, do these frankly outlandish suggestions like everyone should take cold showers actually help the climate movement?

Brandon Hurlbut: Well, I am old enough to be a Pearl Jam fan, but I'm not old enough to remember Jimmy Carter, but I do know that he encouraged Americans to wear a sweater instead of turning up the heat, and that I think-

Emily Domenech: Rough.

Brandon Hurlbut: ... Partly ended his political career. So I don't think this is going to be a message. And by the way, one of the reasons why I love clean energy is because it's cheaper and abundant. I see a world where we're going to have so much abundance with unlimited solar and wind power, so I don't think we're going to have to do these things to solve climate. I think we're going to be able to embrace these cheaper, cleaner, healthier technologies to solve climate and not have to take cold showers.

Emily Domenech: Thank goodness.

Julia Pyper: My markup is about a bill that was recently sidelined, tabled, killed in the state of California that would've set some guardrails on a new mandatory fixed fee that most California ratepayers, California customers, will have to pay starting at the end of next year, 2025. It's a roughly $24 fee. The California Public Utilities Commission approved this fee after a lot of public input. It was a long proceeding. Utilities had initially proposed fees upward of $70, even $128 in San Diego territory. That's a monthly fee customers would have to pay no matter how much energy they use, even if they turn off the lights.

So it's being pitched as the way to electrify everything. You have this stable bill, you have to pay to the utilities, and then you can consume all the electrons you want. But the reality is, especially since this is an income-based fixed fee and the income's really just broken down based on whether or not you're on a rate assistance plan, a lot of customers who don't use a lot of energy would end up paying higher bills. But of course you have to look at averages, and that's the way they kind of came to this conclusion and they resulted in this $24 fixed monthly fee, which is at least lower, but can go up over time.

This law I mentioned would've set some guardrails on that. Benchmarking the increase to inflation at least till 2028, when there would be a mandatory review of whether or not this fixed fee was doing what it intended in terms of lowering costs. I live in California. Electricity costs are only going up and up and up, but that was effectively killed. And so I bring it up because just the San Francisco Chronicle, for instance, had a headline saying it's an opinion piece talking about how lawmakers just quietly killed a bill to keep your PG&E bill in check. They better have a backup plan. I.

T's a thorny issue, but I think electricity rates are something that we virtually all have to pay, and there is a lot of politics built into them even though it takes place in these pretty wonky settings. And so I kind of want to call that out as a way that our energy policy is getting played out. And I think there's a real debate that needs to be had about what the right rate structure is because again, everyone has to pay it, and it's really important to get this right, also to incentivize the clean energy transition and new business models. And what I would argue is a more dynamic rate structure that incentivizes people to use power that's both cleaner and at times of day when it's beneficial to the grid. And so this is a big issue to watch not only in California, but I think other states could contemplate it too.

Emily Domenech: So my only take here, I'm a non-California resident, so I want to defer to my California friends here. California has big problems with their electricity prices. It's a fact. I used to work for a member of Congress from the Central Valley, and in Bakersfield, California, they pay 30% higher average electricity rates in the rest of California, and their average residential electricity rate is 116% higher than the national average. That is unsustainable for those low-income communities that live in rural parts of California, and adding a fee on top of that is not going to fix your political problems.

Julia Pyper: Exactly. Actually, one of the lawmakers who leads the Utilities and Energy Committee had said is this proposal, this now regulation that's in place does nothing to change the size of the pie. We've just split up the pieces a little bit differently and disincentivized, quite honestly, the residential sector in terms of energy efficiency in the home and solar on the home, because the portion of your bill you can even offset with those technologies is going to be lower while the fixed fee you have to pay no matter what will be higher, along with the issues of what lower and middle class folks have to pay now, regardless of how much energy they do and don't use. If we don't shrink that pie, then we're just moving deck chairs around on the Titanic kind of idea. And so insert other analogy, but I think this is something to watch as wonky as it is because it really does affect, I think, the future of our clean energy revolution and frankly just energy costs writ large.

Brandon Hurlbut: I agree with you on rate structure. I'm on time of use and I love it. I charge my EV late at night, run my mill, which is my magic garbage can that I put food in and dries out into food scraps. Very cool. I run that at night as well. So it's really great to be on time of use. And as far as the fee, I think the bill is coming due because we haven't been investing in infrastructure in this country at the rate we should have been. We have let the grid go. This is one of the things that the Greatest Generation did is they invested in all this stuff like water treatment plants, and over the last few decades we've just let a lot of this go and I think the bill is coming due.

Julia Pyper: Right. The last thing I'll say on that is I think we're looking to rates to solve some of these issues, but really maybe this needs to be a broader political discussion and other pots of money from budgets need to be tapped into if this is really a public service to get the grid right, which I totally acknowledge needs to happen as well. Especially in California, we have wildfire risk. We got to address that maybe through another means. Anyway, Brandon, over to you. To close us out.

Brandon Hurlbut: My markup for the week is a Washington Post op-ed by EJ Dionne, and the title is We're Letting Trump Distract Us From His Corrupt Anti-Climate Agenda. And EJ is partly talking about us. He's saying the media is calling out these poll numbers, but nobody is talking about the fact that Donald Trump sat down oil executives and told them that if he wins, he'll scrap a slew of President Biden's clean energy policies and other environmental regulations that they don't like if they give him a billion dollars.

And so EJ is calling this out as blatant corruption, and it didn't get much attention in the news. He points out that at a New Jersey rally that Trump hosted, he said, "I'm going to get rid of offshore wind. I'm going to get rid of EVs," but he also talked about affection for Hannibal Lecter, the Hannibal Lecter stuff, got all the attention, and nobody's talking about what he's going to do to clean energy, and he's taken a billion dollars from oil execs. I mean, he's in their pocket. Emily?

Emily Domenech: Let's not pretend that money and politics is something that's unique to the Republican Party or unique to Donald Trump or unique to fundraisers with oil and gas executives. That said, I don't think it's that surprising that President Trump is going to say he's going to get rid of those EPA regs. I think those EPA regs aren't going to work, and they're not going to be the thing that drives down our emissions because they're not going to be sustainable and they're going to actually make it harder for us to bring more EVs under the grid. So while you may have questions about the policy, and we certainly can have points of disagreement on that, let's not pretend that this is something that's outside of the norm. Republicans are pretty transparent about not liking the regulatory structure of what President Biden has put in place.

Julia Pyper: With that, let's end the pod there. That's it for the show. Political Climate is a co-production of Latitude Media and Boundary Stone Partners. Max Savage-Levinson is our producer. Sean Marcon is our technical director. Stephen Lacey is our executive editor.

You can get all our show notes and transcripts at latitudemedia.com, and if you want us to talk about a specific topic, please email us at politicalclimatepodcast@gmail.com. You can find us on LinkedIn, X, and beyond. Also, hit that subscribe button if you haven't yet. I'm Julia Pyper. We'll catch you again in two weeks.

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