Progressives’ promised “big” and “bold” climate action took a big, bold hit when Sen. Joe Manchin (D- W. Va.) announced his opposition to Build Back Better (BBB) in December. Despite serving as the climate headliner for the Biden administration, BBB never held much climate potential. Moderates and conservatives scorned the price tag and questioned the absence of better climate policy alternatives in the bill. This underscores the imperative to forge a broad climate consensus that respects credible dissent and hitches the climate wagon to the right horse.

BBB was the antithesis of political consensus and policy discretion. Its architects chose the wrong measures and tools, while those opposing it were unfairly labeled climate obstructionists.

Moderates and conservatives rightfully balked at BBB’s economic implications: GDP reduction, job loss, deficit exacerbation and inflation-fueling spending. The price paled in comparison to the payout and inexplicably ignored alternative reforms to unleash trillions in private clean investment that would benefit the economy and deficit. Despite valid concerns, fiscal stewards like Sen. Manchin faced intolerant criticism in a polarized setting.

A descendent of Green New Deal thinking, BBB epitomized the political trap that equates public spending with climate progress. It is tempting to think that a big collective action problem like climate change justifies big public spending. It does not. Subsidies have diminishing effects on emissions, and those in BBB had a cost of hundreds of dollars per ton of carbon avoided, or multiple times above estimated benefits. Even analyses cited in support of BBB found emissions reductions that translate into mitigating less than 1 percent of global temperature rise.

And that’s a best-case scenario. Most projections overstate subsidy effects on emissions because their baselines understate burgeoning market demand for decarbonization as well as the foremost constraints on clean supply: development-stifling laws and outmoded regulation. Flawed simulations aside, practitioners foresee more market demand for clean energy than what the regulatory regime can accommodate. Simply put, subsidies are not a climate savior; rather they increasingly pay for what the private sector is already willing to finance and distract from effective reforms.

Using a proper measure of climate progress — emissions trends — reveals climate’s white knight. Domestic emissions fell markedly this decade primarily because market forces rose to the occasion. Now, trillions in private capital is hungry to fuel decarbonization but faces regulatory deterrents and lacks granular emissions information. Thus, reforms that yield the most climate benefit typically liberate more than restrict private capital and enhance information available to market actors like investors, lenders and consumers.

Poetically, this strategy transcends international boundaries in a way BBB never could. Politically, it meshes with the implied conditions of climate consensus in Manchin’s justification for opposing BBB, which was echoed by conservatives. That is, climate consensus requires reconciling emissions reductions with their costs and our deteriorating public finances.

Fortunately, opportunities abound for an agenda that helps stabilize public finances and the climate. This includes pro-development regulatory reform, bolstering emissions transparency, cultivating carbon marketsliberalizing clean trade, efficient tax reformphasing-down public spending on mature technologies and limiting public spending to research and development. Just a few such reforms would exceed the climate impact of BBB.

As progressives regroup, they would be wise to heed Manchin’s call for a strategic pause to big spending and seek broad consensus. Conservatives can unveil a policy menu that grows the economy, shrinks the deficit and drives climate stability. Although action is dubious in a midterm year, outlining a strategy compatible with conservative economics and Biden’s emissions targets would set the stage for bipartisan reforms that can endure regime change.

Although BBB would not move the needle on global temperatures, its lessons can. We need a climate movement that is civil in tone, diverse in political representation and robust in science and economics. In order to build back better, we need to build a better climate culture.

Image credit: artrachen

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