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Blog Post | April 20, 2020

A Larry Summers Comeback Would Threaten Climate Justice

Climate and EnvironmentLarry SummersRevolving Door
A Larry Summers Comeback Would Threaten Climate Justice

Larry Summers has gathered his fair share of enemies over the years, many of whom are already loudly making clear that Joe Biden should keep the political veteran far from his transition team and administration. Summers’ many critics point to his contributions to the deregulatory fervor of the Clinton years, his role mismanaging the 2008-09 crisis that those regulatory rollbacks helped create, and implying that women were not better represented among tenured science and engineering faculty at Harvard (where he was president at the time) because of biological difference

There is, however, another reason Summers must be shut out: his environmental record. Climate change is already transforming the planet; the next administration is our very last chance at preventing irrevocable catastrophe. Summers has shaped two decades of Democratic presidential policies on climate change, and today’s apocalyptic results speak for themselves. But he isn’t just guilty by association: Summers’ influence has directly exacerbated our climate crisis by repeatedly halting any meaningful attempt at curbing the crisis. 

What follows is a partial list of Summers’ actions throughout his time in politics that have worsened our climate catastrophe. It should be evidence that a Biden administration — which understands the stakes of climate change well enough to make it a topic of outreach to the Sanders campaign — cannot and must not grant Summers power if it wants any hope of lessening the damage to our planet. 

If you have examples that you think should be included in this list, send them our way at oversight [at] cepr.net!

Wrong Early and Often 

Summers got his political start working for President Bill Clinton. While serving as the World Bank’s Chief Economist, Summers famously signed a memo that advocated dumping toxic waste in developing countries, where the economic impacts would supposedly be lower (Summers and the memo’s author later claimed it was meant to be sarcastic). 

Those particularly horrific views aside, Summers was consistently a climate dove in the Clinton administration. While he claimed to recognize the seriousness of climate change, he opposed a “too-rapid move against emissions of greenhouse gases” for fear that it risked “dire and unknowable economic consequences.” Summers’ camp ultimately prevailed over the views of others, like EPA Administrator Carol Browner and Vice President Al Gore, who advocated for a more aggressive approach. 

Dismissiveness: The Death Of The Green Recovery Investment Plan

Summers served on Barack Obama’s presidential transition team after securing an appointment as Director of the National Economic Council. Obama ran on both fixing and greening the economy, but Summers shut down a proposal to do just that by former FCC Commissioner Reed Hundt.

As Hundt recounts in his book, he pitched Summers on a plan to create three public banks for funding wind and solar power, energy-efficient infrastructure, and new transmission networks respectively. He called it GRIP: the Green Recovery Investment Plan. Here was the two-birds-one-stone chance which environmental activists clamored for: put people to work saving the planet. It’s hard not to see GRIP as an early precursor to the Green New Deal.

Summers killed it. After hearing “No” from fellow transition officials Timothy Geithner and Peter Orszag, Hundt hoped Summers might see reason given his oft-stated interest in environmental policy. Instead, Summers condescended. “The problem is that you are talking about creating more debt. Our economic problem is that the country has too much debt,” Hundt recounts Summers saying. 

That’s wholly misleading, and both Summers and Hundt knew it. Leaving aside whether an historic economic collapse is the right time to worry about government spending (it’s not), Hundt replied “Larry, there’s too much bad debt. This is good debt. There’s not enough of that.” This, in other words, would be debt going toward lasting infrastructural change to put the economy on the right track and save the planet — exactly the sort of thing Summers would later argue (once he was out of power) that U.S. fiscal policy needs more of. (Long term observers of Summers caution us to remember that Summers has historically been more progressive the further he is from actual power)

On Climate, Normally Bullish Summers Exhibits Trepidation 

GRIP wasn’t the only time Summers played politics to shunt the climate crisis during the Obama transition. The New York Times wrote in early January 2009 that “According to a transition official familiar with Mr. Summers’s thinking, he is wary of moving very quickly on a carbon cap, because doing so could raise energy costs, kill jobs and deepen the current recession. He foresees a phase-in of several years for any carbon restraint regime, particularly if the economy continues to be sluggish, a slower timetable than many lawmakers and environmentalists are pressing.”

“A transition official familiar with Mr. Summers’s thinking” is often Times-speak for “Mr. Summers said on Background.” Yet even if this anti-environmental assessment didn’t come from Summers’ own mouth, multiple sources suggest that it reflected his thinking — actually stopping the climate crisis would have been inefficient and killed jobs.

Similarly, Summers’ fixation on ensuring that almost all stimulus legislated in 2009 to infrastructure investments that could be “shovel ready” almost immediately was disastrous. Since America was, sadly, on the cusp of few large green infrastructure initiatives in 2008, few such investments could be up and running within a matter of weeks or even a few months. But of course the economic downturn lasted most of a decade, and so the fixation on haste was tragically misplaced. Summers’ foreclosed major investments in 2009-10 in projects that could have been funded at low interest rates and built amidst high unemployment over the next half-decade A similar economic situation might well confront us in 2021 — it’s hard to have faith Summers will admit his mistakes and reverse course. 

Hypocrisy: Exporting Carbon To Developing World Is ‘Correct’ When I Do It

Just days after the Obama administration signed the Paris Climate Accord, it lifted a four decades-long ban on exporting crude oil. The policy was rooted in a white lie — as long as America cut its domestic fossil fuel consumption, its oil companies could still profit abroad without the U.S. technically increasing its own carbon dependency. The atmosphere doesn’t care if ExxonMobil burns oil in Texas or Tanzania, but why let the apocalypse get in the way of good business?

That was Summers’ view, at least. He told the Brookings Institution in 2014 that repealing the export ban was “as clear as the merits with respect to any significant public policy issue I have encountered. And it is an important test of the efficacy of the functioning of our democracy whether within the next nine months we will get to that correct solution.” That’s quite a departure from how Summers saw a similar issue in 2007. In a Financial Times column, he called the Kyoto Protocols a failure in part because they did not extend to the developing world. 

Wrote Summers: “The truth about climate change policy is that developing countries are where most of the future action has to be. … any international regime that does not include them will not work because emissions reductions in the industrial world will be offset as energy intensive activities relocate to the developing world.” (emphasis added)

That is, literally, exactly what lifting the oil export ban did. Summers identified in 2007 (when he was out of power) that a climate solution needs to account for internationalism, then in 2014 (when he was proximate to power) swooned over a policy that exploited this blind spot.

There’s nothing preventing Biden from immediately reinstating the crude oil export ban on day one, as Sanders planned to do via executive order and Biden committed to doing when pressed by Greenpeace. But that pressured concession might be swept under the rug if Larry Summers has Biden’s ear. 

Lessons: Don’t Trust Larry Summers but No Matter What, Pay Attention to the NEC

In 2009, the New York Times speculated that it may fall to Summers “to inject a rigorous economist’s reality check into the debate over the scope and speed of an attack on global warming.” Looking back, what is most notable about this statement is not the premise that “reality” would demand narrower climate ambitions but that the Times recognized that Summers, as head of the National Economic Council, would have a heavy hand deciding which climate policies saw the light of day.  

This is important. While there are dedicated agencies and departments focused on climate policy – places like the Environmental Protection Agency (EPA), the Department of Interior (DOI), and the Department of Energy (DOE) – the most consequential, transformative policies will ultimately run through economic policy clearinghouses like the NEC. 

Even with steadfast allies in environmentally-focused positions, someone like Larry Summers at NEC could stop good climate policy in its tracks. That is especially true now that a hypothetical President Biden will be taking office amidst an economic downturn. He may, once again, be shaping stimulus packages that could include major green initiatives. Now, more than ever, economic policy jobs must be a green priority. 

NOTE: RDP intends to update this piece as additional negative OR exculpatory evidence is brought to our attention.

Climate and EnvironmentLarry SummersRevolving Door

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