The "Carbon Dominance" Strategy Behind Trump's Anti-Renewables Actions

bringing you a new season later this month. In the meantime, we have a whole bunch of interviews to bring you, starting with this great conversation our Australia reporter Royce Kermilov's had last month with Brown University professor Mark Blythe and what he calls the strategy of carbon dominance and how we're seeing that strategy play out in an all out attack on renewable energy in the US and beyond.

a fifteen percent tax on everything they do. He then went on this really weird brant about and the one thing that I'll do, my Trump and the one thing we'll never do is is build up windmill. The EU will have no windmills in America. And he starts going this whole thing about windmills, and it's just, you know, you think it's bizarre, you've got a hatred against windmills,

but it's actually far deeper than that. And the sort of the short version of the story goes like this, where does populism and Trump and all this stuff come from. Why they have an anti carbon twinge? So two things. One is basically what you might call the strategic power side of this. We'll park that for a minute, bullet's come back to it. What's the domestic politics of this?

Go back to nineteen seventy five, and the three biggest employers in the United States were, if I remember correctly, General Moores, the company that became x on It, and another big manufacturer I can't remember who the hell it was. Now you go to today and what do you get you? Basically your top three are Walmart, the Home Deco, and Amazing Logistic. So they've gone from a business model for a country that makes lots of things to ones that sells lots of things, watch of which has made in

other places. And this is the whole the industrialization thing, and China Shop and so on and so forth. Right, and I go back to about nineteen seventy one, just before that period, and what have you got. You've got kind of an encompassing political coalition whereby one in five jobs is in the auro sector and one and three are unbelated sectors that feed into this. So what does

politics look like in this period? It looks like Tweedle, dumb and tweedl day, every political scientus in the world will be writing about how there's no difference between the Republicans and the Democrats. They agree on everything, So what are they doing. They're basically arguing over the distributions within what we would call a stable growth model. And what was that growth model? It was a carbon based growth model. What powered American growth for the nineteenth century, for the

twentieth century, particularly postwar, is the East Texas basin. It's cheap shield. It's basically having cheap fuel which powered chief electricity. You can produce its scale manufacturing, so on and so forth. So you have this very sort of encompassing coalition. Everybody's basically part of the same growth model. Thirty percent of people are working in unions. Is industrial economy. Move forwards through the eighties, the nineties into the China Shop the

two thousands, and what have you got. You've got a Republican coalition that looks like this. Start in Alaska. We've got a north to Kora, South Dakora, Oklahoma, Kansas, East Texas, through Texas, through the Panhandle, Mississippi, Alabama, come up to West Virginia. What have you got? You've got the core of the Republican states, the reddest states. What did they all do? They're the residual from the old growth model.

They're the carbon coaliction. What they do is food, farms, fuel, fertilizer, feedstock, plastics, petrochemicals, manufacturing. That's their core business model. So when Biden comes along and says we are going to do decarbonization. They regardless as an existential threat to their growth model because basically

they're going to shut them down. And you can tell them all the stories about we're going to help you transit and all this sort of stuff, but they basically look at the Midwest and go, now, we don't believe you will stick with ours. This is basically an existential struggle. Now, part that for a second, and then think about how

we used to think about stranded assets. Stranded assets was something that would happen to carbon assets because as the world got warmer and as governments got serious about climate change, they would tighten, if you will, regulations and it become too expensive to have these things or produce these things, and companies would rationally disinvest from them, and investors would disinvest from them, and they would become stranded assets, and

therefore they'll be we want to hold them. And that's how you basically power a transition towards green ticket cetera, et cetera. But what have you flipped that on its head and you say that there's an existential struggle between green and carbon asset, and we now hold the White House and the Senate and the House. So what are we going to do. Well, basically, we're going to protect our assets. So how do you do that? You dominate the other sectors. Yeah, we're not going to ban it completely.

We're going to get rid of all the subsidies, We're going to get rid of any scientific support. We're going to lean into all the stuff that doesn't really matter. For example, last week was the pitch that the American government's no longer going to recognized greenhouse gases in any way harmful, you know, being lots of other things like this.

But essentially what they're doing is they've got a strategy of we're going to allow you to build that windmill in Texas because that'll help us keep the air conditioning on, But in no way do you replace the carbon that's powering the economy and moreover, that's where we get the power. Go back to the power stuff. With parts of a while ago, that has been the sort of the secret to American growth. Partly is the dollar, which I'm happy to talk about, but the dollar very much rises and

falls historically with the price of oil. Because even though Saudi for a while was the biggest producer in America, is now the largest net producer. It's American oil companies, it's American LNG. It's a huge part of what America does, and it also gives them a huge advantage in growth. So, for example, the cost of energy in the United States approximately one third the cost of word is in the

United Kindom. So if you have that as your advantage and you basically are part of that coalition that sees carbon is basically your strategic advantage. When the rest of

the world is decarbonizing, you have two choices. You can either go for splendid hemispheric isolation from Greenland to Argentina based on carbon, which might be one option, or you can do what they're also doing, which is actively discouraged through a coergon and bribery and other methods to do with tariffs and others to get others not to make a green transition and instead to sign very long contracts

for American lerg et cetera. C So, carbon dominance is basically when you turn stranding assets into a political strategy, and that is essentially what's going on right now.

things don't remain equal. So some of it will end up on the American consumer, some of it will end up in producers. You'll be able to effectively tax those producers and then redistribute that cash. They've already raised a couple of hundred billion with it. It's not exactly chump change. In terms of the broader strategy. You know, will have

fifteen percent tariffs lead to American reindustrillization. No, WITHUD have fifty percent tariff, Well, yeah, because you'd stop trading and therefore you would literally have to make this stuff yourself. So on its own as a reindustrialization vehicle, absence any sense of investment policy or industrial policy, which you had with Biden, then it's probably not going to work. But nonetheless, does it sort of like work in terms of a

political stratage. Yes, If you think about the nineteenth century, what would the Republican policy towards the working class to protect them the tariff, keep out foreign competition, have ruthless domestic competition, keep your markets really flexible, keep your energy costs really really low. In fact, use carbon to make them the lowest in the world. Never mind all this stuff about the level ased cost of electricity being cheaper

with green stuff. If we really pumping off carbon, we can be competitive, and we can do that in such a way that we can ignore and basically obviate this green transition.

So that's some dude who's in the middle, and they really have middle preferences, And because votes are very large number of things, ultimately you have a kind of quasi normal distribution of preferences, which is to say, there are very few communists and very few fascists, and most people are just uncle nice in the middle. So you need to move your polity free towards captain as many Uncle nice as possible, and the Republicans will by saying, hey,

taxis are good for Uncle Nice. And then the Democrats will say, no, actually, redistribution is really good for Uncle Nice, and that's what we should do. But essentially Tweedle Dumb and Twio default over this median voter. The median voter has largely disappeared. What you've basically got are the action is no longer in a sort of normal distribution. What you've got are very hetrogeneous preferences. And what you try and do is build a minimum winning coalition rather than

an encompassing coalition. You basically go to your base and work out from the tale to as far into the middle as you need to go, basically working with your activists, working with gerrymandering districts, working with keeping them agitated and angry all the time. And in that way, the Republicans have been much more successful than the Democrats. And it's that ability to build up minimum winning coalition and keep that going means that you don't have to compromise anything with the other side.

looks like the UK might be going down that path. Yeah, and so my question is how does it say, how do we see this kind of bawling out from the US to other places right now?

politics basically says three things. There's a self serving elite called the top ten to twenty percent. They've run off with all the cash. We've got nothing and screw them. They hate us, and that's up. Basically, there's one is basically that. Then there's a sort of nationalist ethno nationalist version of that. That's the anti immigration thing is basically all these foreigners coming in and living off welfare, and when the one paying taxes, so on and so forth.

And then there's the anti green one. Right, it's all a hoax and we don't need to do this. And those different factions coalesce because all of those are basically whether the legitimate gradiances are not a leave up to whoever's listening to this, but they work together as a set, and they're all real things in each of these countries. Is it the case that basically, in the eyes of many, a self serving political coal that cares more about decarbonization

than the fact of your kid's schools falling down? Yes, what about wage stagnation, Well, it hasn't hammed for the top twenty percent, it's hard for everyone else. They don't seem to give a damn about us. Yes, right, So those conditions are there, and what Trump has done is to provide a model of how to do this, of what this is and what these agents should be thinking about, et cetera. And they'll have different national cadences and different

national flavors, but the formula is essentially the same. So we have this world in which those grievances have real valance, if you will, for people. They mobilize around them to a certain extent. The United States provides a ten plate for it, but you have to then dial it back in terms of particularities of your local economy, et cetera. They can't just take these ideas off the shelf and dump them down and do the playbook. They have to

be played with in certain ways. And then does the figure of Trump himself, who is immensely unpopular side of the United States and actually inside the United States. So that kind of cuts the other way. But you know, that's sort of the broadway in which I think about it.

ethno nationalism et cetera, et cetera. So there's a playbook which has developed very much uniquely in those places and it predates Trump. But what Trump did was basically take this kind of latent call it of basically angry working class people and low and middle class people who had been hit by a combination of financial crisis, austerity, wage stagnation, and a seeming favoritism towards foreigners rather than the domestic population. And he was able to weaponize that. And that's been

layered on top of those politics and other places. So again to think of, you know, the La Pen, La Pen's very different, The National Front's very different to this. They've talked very much towards the center to be left economically but right on immigration, et cetera. It's quite different from the Maga approach box in Spain, very much more like the Maga approach reform. It's really kind of a

vehicle for forage rather than anything else. So there's a trumpy aspect of this, but the politics aren't particularly maga in that respect. So again it's a very mixed bag. What's interesting is at this moment you see this everywhere in different versions, and it behooves us to go world. Why.

by twenty twenty seven. I could have that wrong, but and yeah, and we're starting to see you know, kind of incredible statistics coming out about you know, the right baby production battle.

what are they worry about? What they worry about is China, And they worry about China in the following sense they are if you will. And my friend and colleague Dan Brisco must get a shout out for this because he's writing an offhead on this and I just read it, so it's in my head. But essentially I think Dan's right on this, that that group of people are what you might call really hardcore form policy of realists, and they're a very materialistic bunch of realists in the sense

that they've got no time for America. Is the shining light on the hill or any of that sort of stuff. This is naked self interest and what is naked self interest dictate The history is written by the people who control the source of energy. The nineteenth century, it was coal that was the United Kingdom with a technological lead. Once it moved to oil and gas, it became the United States. Russia was able to maintain itself in large part of the coal war because it was completely self

sufficient and oil and gas. And if you control that stuff, then then you know you control the future. But if you've got a world in which greenhouse gases and other warming agents are seriously threatening everything from biowebs to human survival, then you have to be carbonized. Now, whoever gets there first, whoever locks that in, whoever creates the tech, they're the ones that are going to be the next hedge and one. They're the ones that are going to be selling the

stuff you need to survive to everybody else. And Biden's crew recognized this and wanted had they won the election, their idea would have been IRA two, IRA three, build on this, build more and more, actually get ahead of the technological curve, try and sort of anticipate before China gets their way to go. And instead what we did was we voted in Trump and we basically said to the tech lords, why don't you just do ai instead, because I'm sure it'll end up being something someday. So

that's kind of where it's ended up. And we've seeded that to China. Now have you seed that to China? And you're a foreign policy realist, what do you do? You have to stop them. This is why they're serious about Taiwan, is why they're not spoiling for a fight,

quite willing to have one. Now, the interesting thing about the Crump coalition is these people are quite vocal and quite a large prominent part of it, but so far they seem to be completely sidelined because neither the tech laws nor the National Conservatives really want to get to a shooting More of the China they're quite fine to have the Communist Party is the ideological enemy and so on and so forth, and they're pushing green tech around

the world, and it's all just bullshitting. We shouldn't be doing it. Why don't you love our coal industry? Et cetera, et cetera. But they don't really want to get into a shooting match that could be the final shooting match. So there's real tensions in this coalition. But the basic idea is whoever controls the energy infrastructure in the twenty

first century runs the world. And the Americans are very scared it's not going to be oil and gas, and they're doing everything they can to make sure that it is well.

You have Pakistan doing the same thing, and Pakistan Pakistan Southwest Asian economy, considered to be one that was going to be growth, is now leap progging over kind of carbon acids just to solve it. You have China supplying evs to Africa, so you have the potential for a

laite throg effect there. You know, So in combination with kind of the US tariffs that may drive up prices on steel and steel labor and the anti immigration policies that compromise your ability to do skills, and the reality that there are going to be a lot less people buying this stuff down the track. Where does that leave the US in terms of the material reality?

the swing producer. Saudi will still have the lowest possible price, highest possible quality, but they can't do everything. There's going to be a bunch of stuff we can't decarbonize in any conceivable time frames, such as air travel and so on and so forth. Cements a bit of a tough one.

So we're still going to be able to do that, and if price is fall that's great because that gives us a way of staying in the game vias ave via these alternative green technologies, But ultimately, if it becomes so cheap that you can't really make a profit out of it, right, ultimately the capex is bigger than the opics,

then you've got a bit of a problem. And ultimately that thing that usually kills green transitions or experimental technology is the valley of death between basically piloting and then getting it to scale and then making some money off of it. You get a weird version of that, whereby what's the point in opening up another fracking field in Oklahoma if at the end of the day the world price is twenty bucks because everything's so saturated. So in

a sense, it's sort of double edged. You want the cheapness. It keeps you in the game, but if it gets too cheap, you knock out your own producers. And also, at the end of the day, if it is the case, the barer technology gets better, et cetera, et cetera. And China strategically just doesn't want to deal with the vulnerabilities that come with oil, and India also falls very much into this category. India's neuralgia has always been oil imports

and the ability to pay for them. So if you get India, Pakistan, China, the rest of Southeast Asia, particularly Malaysia, Indonesia making a green transition, the Americans, unfortunately, they are going to be the last people hanging around driving F one fifties that cost two hundred thousand dollars.

of stuff over time. But it and we also know, you know, you can look at the Biden administration where inflation spikes kind of become the mandate of heaven, where if it's spikes, you loose government pretty quickly. And as you say, I think you've got a very good phrase of this nature always batch last. And so if we're seeing as an inevitability, how does that figure into this politics as a factor.

not be the thing that you run out of. So what is there to do? Well? Ultimately, what you try and do with these things is to have options. In the sense of optionality. You want to cover your downside as much as you can and then position yourself in such a way that you might get the upside on it if it comes to pass. What might that look like? Well, in terms of let's say agriculture in the United States, absolutely the case that some places have become too hot

for particular strands of wheat. Okay, so what do you do? You move the wheat production elsewhere, and you start to do something else in the place. You plan ahead, You try and get ahead of the curve. Is that a full proof solution to this? Absolutely not. We already have estimates from the prop the Potsdam Institute for climate research on greenflation, you think it's already significant. So a recent

European report that essentially said it's showing up already. It takes about sixty days from a weather shock to basically show up in food prices. So as these patterns continue, the problem is the nonlinear in them. You don't know what's going to happen and when it's going to happen, in which part of the BioWeb is going to be impact. It becomes very difficult to cover that with any type of options. So there's no great solution to it, and it's baked into the cake. What does this do to politics?

I think it's already there in the sense that for a couple of years, five years ago, six years ago, you couldn't respectably stand up and say, unless you just want to be a crack, that windmills were evil. And when there was a period whereby you had people like the head of the EFD railing against windmills and somehow this was okay. It was like green fatigue or something

like this. I think now in Europe, when every summer is hotter than the prior one, when there are wildfires in Scotland which never ever happens right when people's actual experience is finally, oh, it's getting really hot in here, isn't it? And none of us are their conditioning. I think that tempers down the absurd claims of anti climate

action and basically allows us to refocus. So I think that sort of you know, at the end of the day, what's the phrase, nothing gets your attention better than pain? Right that you know there is something to that, and it has a way of filtering out the politics. Quite how Trump deals with this, we don't know. I mean, you don't know if he's going to be done by

the midterms. You don't know if he's going to be two terms, if this lasts, if the Democrats are the shambles that they are just now and continue to be. So the problem being that as the party of the state is CO who kind of likes things the way they are, it's very hard for him to argue for anything else that that just hands it in a sense of the Republicans. And if we get two terms of these guys, then that's when you get the full carbon

dominance strategy. And by that point you have seen such a big break with China, the rest, with East Asia, with South Asia and the world will be very much two different places. One that's still holding onto carbon trying to promote its use, and one that's basically postcarbon.

your top researchers. You're basically saying we don't care about this stuff. So if you're one of those researchers, one of those scientists, why would you want to be here, particularly if all the options somewhere else. There's a way in which they're embedding policies which even if you get a change of administration, it's very hard to undo. The trust has gone.

the decisions that were made done have profound changes and as you describe, locked in a series of policies. But you know that continued to exist for the decade of a three different coalition administrations. And what it seems to be the response from the center left, which is Labor Party here soorts to essentially weight them out, and that the approach seemed to have been We're going to present

the reasonable, the sensible response to this. When all this fizzles out, will be able to step into the breach promise to rebuild. And the first term of the Albernesi administration was very much just about repairing, was about putting back things, and which has left a lot of people very jaded and frustrated in many ways about kind of where things are going. And I wonder whether the Democrats are essentially playing the same strategy weight this out.

and do that stuff. Britain finds itself in a really weird position because that's exactly where they are with the thirteen years of the Conservative But the government is so afraid of its own fiscal shadow and so timid that they literally are hamstrung not by anything except their own fear of the bond market. The bond market itself is not the problem, but just afraid of it, so they are unable to do it, and that really gets people pissed off and shaded. I suspect what's happening in Australia

is where the Democrats would like to find themselves. That is to say, we would be back in power, we would be credible, people would recognize the damage. I don't think America is there yet. I think a lot of people don't think at all of it this is damage. You think this is what we need to do. There is a certain logic to it. If you basically are a kind of realists in the international relation sense, and you think the most important thing isn't how the global

welfare optimum is generated. You think it's how America does. In America should be running things, then a strategy of carbon dominance and at least hemispheric dominance would make sense to you. And allowing China to run off with everything is not what you want. So it depends what you value at the end of the day.

you usually do. Usually, what the United States does is run a kind of hidden developmental state through universities, through agencies like DARPA, Defense Advanced Research Projects, and then you know, we make these things and then they spill out into the private sector. And the great example is Mariana Masakoto

did the cigner booking the competition state. All the key technologies in the iPhone were basically made it in public and private universities with federal money, and they had defense applications. And then Steve comes along, put it in a shiny box and changes the world. Right, And this is very different. This is now a part where we've got these massive companies whose investment budgets are orders of magnitude bigger than anything that the universities could muster or even the public

sector would put out. And they're run by man children with massive egos. So if you think about meta, I mean, Meta has squandered almost a trillion dollars on the metaverse.

the final use case is. Meanwhile, China is just going sector after sector, Let's do batteries, let's do this, let's do this. It really is the strange moment where we the cult of the entrepreneur in the United States has blinded the country to what actually we need to do in long term investment, and we've bet the househol in this one critical technology, which, as far as I've concerned, all it seems to be able to do is to

bugger up higher education and people's ability to write things. So, you know, that would be my side worry on top of all this stuff.

which was another Australian pioneering invention. By the way, you can see how you know, the hype and the focus and artificial intelligence as a climate solution and as it will fix everything, it will create new materials is very much a distraction in a very convenient way, to turn people away from investing in and focusing on to just going all in on. You know, wind solar batteries.