Green New York
The conditions and implications of winning
Almost a year ago, I wrote about the fight for the Build Public Renewables Act (BPRA), legislation in New York that would allow the New York Power Authority (NYPA) to build renewable energy with robust labor provisions. On May 2nd, it passed in the state budget despite the New York political establishment’s efforts to ignore and co-opt the proposal.
This is the most significant public power victory in the US since the 1930s. The largest state-owned utility company in the country will be able to roll out new, publicly owned renewable energy with the strongest labor standards around.
The main reason that BPRA passed was the Public Power NY organizers who wrote the bill and campaigned for years using a variety of tactics and adjusting to—and changing—the political conditions. For example, New York Governor Kathy Hochul initially tried to include a watered-down version of BPRA in the budget, which actually helped them by creating a new floor. But the Inflation Reduction Act (IRA), the Biden administration’s signature omnibus bill signed into law last year, also provided a boost.
The IRA’s primary climate policy mechanism is the extension and expansion of the same renewable energy tax credits that have been the foundation of federal renewable energy policy in the US for many years. This has favored large-scale, privately owned projects: because they do not have tax liabilities to deduct from, public or nonprofit entities could only indirectly benefit through power purchase agreements with private entities. As geographer Sarah Knuth has shown, these subsidies have created billions of dollars in tax havens for the firms that provide financing for renewable energy projects, mostly large banks. Knuth’s analysis reveals that because the amount of tax equity investors are looking to offset is significantly more limited than the projects seeking it, financiers have leverage to extract more favorable terms and act as gatekeepers for what projects get developed. Essentially what this means is that the government pays big banks to provide loans for renewable energy projects and reap enormous windfalls in the process.
But the IRA has a subtle but potentially monumental change: it also allows for tax-exempt entities—like the NYPA—to get direct payments in lieu of tax credits, allowing them to directly take advantage of these renewable energy subsidies for the first time. These payments are uncapped, too—the much-publicized $370 billion figure for climate spending in the IRA is merely an estimate. This is a huge deal for public power, and it strengthened the case for BPRA. But direct pay could also be a boon for the public sector more broadly, because the policy does not only apply to utilities. For example, public schools could take advantage by building solar panels on their buildings.
However, in a recent New York Times op-ed, geographer Brett Christophers wrote, “The I.R.A. will help accelerate the growing private ownership of U.S. infrastructure and, in particular, its concentration among a handful of global asset managers.” The first example he cites is a private asset management firm buying private wind and solar developers, which is an example of the latter, not the former. The trend of these companies buying up large swaths of the economy is concerning and worth examining, but it does not help to muddy the waters by conflating privatization with consolidation.
Christophers compares Biden’s industrial policy approach of mostly private sector carrots unfavorably to FDR’s massive public sector build-out in the New Deal, and rightly so—our infrastructure should be owned by, and work for, the people. But he goes on to state: “Public ownership of major infrastructure has been an American mainstay ever since [the New Deal]. Mr. Biden’s laws will radically overhaul this culture.” That ship actually sailed decades ago. Half a century of neoliberalism has hollowed out the capacity of the public sector in the US via privatization and defunding, which was not even that great at its Rooseveltian apex; at present, over 80% of US energy infrastructure is privately owned. Far from being a Green New Deal, the IRA is mostly a continuation of the status quo—with some perhaps under-appreciated tools to fight back.
Rather than debating whether the IRA is good or bad, we should be thinking about how it affects our political economic conditions and what the strategic implications of that are for effecting a more just and sustainable world. It will likely help entrench some undesirable things, like financialization and car dominance, and it is wholly inadequate to the task of caring for and repairing our biosphere. But at the same time, some of the IRA’s subsidies—especially the direct payments for public entities—improve the terrain for certain forms of worker-driven climate organizing and public sector capacity-building in a real way.
Christophers does acknowledge the IRA’s direct pay provisions, but correctly notes that “public entities [must be] actually willing and institutionally capable of taking advantage of those provisions, which is anything but a given.” The fact that opportunities need to be seized of in order to actualize their potential is just politics. The same can be said of any potentially useful policy, condition, or structure. Advocates for public power—like the socialists responsible for the BPRA victory—understand that public (or cooperative) ownership in and of itself is not a panacea. It makes energy democracy possible in a way that private ownership simply does not allow for, but it still has to be fought for and built. Public Power NY has now shifted its focus to stopping the confirmation of NYPA Acting President and CEO Justin Driscoll, who has softened his stance on BPRA considerably in the wake of its passage.
In terms of the scale of what needs to be done to stop the ecological crisis, Christophers is correct to call BPRA a “relatively modest win.” The fact that it took years of arduous work is a reflection of the difficult terrain we find ourselves in. Similarly, the IRA reflects the balance of political forces right now: the private sector remains dominant, but support for going outside of the profit motive is emerging. How the new conditions of the IRA will unfold—where those direct pay dollars flow and what they are used for—is undetermined.
Sober, clear-eyed political analysis in the US usually means grasping how difficult it is to do anything good and viewing even ostensible progress through a pessimistic lens, which applies to the IRA as much as anything. However, it also means vigilantly looking for potential openings and opportunities, however small, and not being fatalistic or overly deterministic—the BPRA victory is a prime example of this. You probably will not go broke anytime soon betting on pessimistic predictions and interpretations of the US political terrain. But that is only true until it isn’t.
Bissau-Guinean revolutionary Amílcar Cabral said, “Tell no lies, claim no easy victories.” This is vital wisdom, especially given prevalent incentives to overstate the impact of and/or contribution to ostensible wins. But there is a flipside to that coin. Winning often comes with deep suspicion for those of us in the US Left, and losing nobly can sometimes feel more comfortable. In a system as broken and exploitative as this, how could we ever hope to wield power? And even if we do, the contradictions are fraught and dangerous. However, the right types of wins that shift power and resources to the working class are not only ends in and of themselves, but means of building and sustaining movements.
That is the promise of the Green New Deal, which is not limited to the AOC-Markey resolution, or even just federal legislation: it is an expansive framework for using the state for redistributive climate and environmental justice. What it looks like, what it does or doesn’t do, is contingent and undetermined. We can start imagining and fighting for it in our communities and our workplaces, and enacting it in our cities and states. In BPRA, Public Power NY has provided an inspiring example.