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America’s $800 billion climate squander is feeding a new lobbying ecosystem

Manfanatical, who He runs a well-trafficked shoe-shine booth at a large convention center outside Washington, and was in a good mood as he surveyed delegates at a recent event there.they are attending ARPASecond Summit, the annual networking event hosted by the Department of Energy (ManoSecond), and tipping is fine. David was forced to close his booth and lose business a few weeks ago when Donald Trump spoke at the same venue at a gathering of conservative Republicans. That’s not his only complaint about Trump: “When he ran for office he promised to drain the swamp, but it turns out he’s the biggest alligator of them all.”

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David is right. During the Trump presidency, lobbyists for various corporate interests have gone to great lengths to try to influence the unorthodox administration of Beltway outsiders. Many unfamiliar swamp creatures also appear, when they realize that the ear of the last person to talk to before Trump makes a big decision is lobbying for gold. They have slipped away. But with up to $800 billion in clean energy aid up for grabs over the next decade, another invasive species is taking its place.

The entire energy industry spent nearly $300 million on lobbying last year, the highest level since 2013 (see Figure 1). Big oil and power companies, which had been reducing their influence-seeking spending through 2020, ramped up again; the increase in spending was in line with that of Big Pharma, the biggest lobbyist. Average annual spending by renewable energy companies increases from around $24 million in 2013 to 2020 to $38 million in 2021 and $47 million in 2022. “We now have an interesting new ecosystem of swamp organisms,” says a government relations officer at a large renewable energy company.

The reason is the passage of the Inflation Reduction Act last year (Irish Republican Army). The law provided at least $369 billion in direct subsidies and tax credits to decarbonization-related industries (see Figure 2). It comes on the heels of a bipartisan infrastructure law that also provides billions in subsidies for clean infrastructure. Some of these provisions offer generous tax credits with no cap on the amount of spending eligible for the incentive. The frantic investment spree, if it materializes, could lead to $800 billion in public spending over the next decade. An official at a major utility said her company has projects across the U.S. that, if successful, would receive a staggering $2 billion from the two laws. “We’re not counting anymore … we’ve got big smiles on our faces these days,” admitted the renewable energy company’s government relations officer. “There’s a lot of places for a lot of people out there,” concluded one chamber bigwig. And, he added, “a lot of lobbyists are interested in spending.”

Green impact brokers can be seen in all the usual places, starting on Capitol Hill.A longtime lobbyist observer believes Irish Republican Army “The most targeted bill in the last 20 years.” More than 2,000 groups have formally declared their interest in sausage-making in Congress, which enacted the mammoth law last year.this Irish Republican Army Of course, infrastructure laws are now written into statutes. But flattering congressmen and senators may still be worth the effort. “The government still has to submit a budget and MPs still have a say,” explained a senior source ManoSecond Officer to advisor. And, added a lobbyist for a rising climate technology investment firm, “members of Congress can always ask questions at hearings or send letters of complaint to the White House.”

The White House itself is another target. On potentially lucrative but politically explosive issues, “people in the White House want to be involved,” explained a partner at a top lobbying firm. These include local content requirements for electric vehicle manufacturing and being seen as “clean.” The maximum carbon intensity of hydrogen. On such issues, John Podesta, President Joe Biden’s climate and energy wrangler, “has the final say,” the partner said. Love or hate Mr. Podesta, an energy operator who is not in the love camp, saying, “He’s known for being pragmatic and focused on getting things done.”

Two executive branch agencies top the green lobbyist’s hot list.this ManoSecondExperts will decide which sectors and technologies to prioritize; for example, the Office of a Lending Program designed solely to “provide debt financing for the commercial deployment of large-scale energy projects” now has $400 billion to lend. Another target is the Treasury Department, especially the IRS (IRS), whose tax experts are fleshing out the rules for the green tax credit.

this ManoSecond is the more popular of the two. “Of course you can lobby ManoSecondsaid former Brian McCormack ManoSecond chief of staff. “Companies are always going out there and talking about what they’re doing.” Mr McCormack said one challenge now is that many government employees still don’t go to the office on a regular basis. He argues that it’s harder to get your point across on the phone or via video conference.

more difficult IRS, said the clean tech investment lobby, “is not affected by direct lobbying”. Dealing with the taxman is possible but requires a more subtle approach. A law firm known for its tax expertise secured a dream meeting with officials on behalf of a client by submitting “very good reviews” and clever technical papers on relevant topics, thanks in part to one of the firm’s partners express.many IRS Officials know their tax codes well, but they know very little about energy. “You have to have credibility for them to see you, and you have to bring them solutions,” she explained.

For the lobbyist’s corporate clients, this consideration prioritizes certain skill sets. One group that is in high demand are experts in finance and accounting, especially in niche areas such as tax equity deals (where investors agree to fund projects in exchange for the right to claim tax benefits) or the ins and outs of tax credits that can be transferred or superimposed on each other. New climate-related laws are more complex than any that have come before, yet the number of people working on them in industry and government has not changed, a clean energy lobbyist observed. “The complexity is so high,” he said, “that if you can parse in half an hour what others take eight hours to parse, it’s worth paying for your service.”

Another popular group are energy nerds. A longtime advocate for upgrading the grid gleefully reports his sudden popularity as the electrification industry grapples with how to build transmission lines and other electrical infrastructure.New laws subsidize specialists in emerging technologies, such as carbon removal, which prevent emissions of carbon dioxide2 Entering the atmosphere, or sucking it back out of the atmosphere, are also popular. “We’re whisperers at the Treasury Department,” says a top government relations expert at a climate technology fund proudly. The fund’s investments in areas such as carbon capture and hydrogen electrolysis give it deep expertise in those areas, which it shares with tax bureaucrats. It’s also sweet-talking environmentalists, whose “early ignorance and aggressive positions” are often the product of unfamiliarity with new technologies or tax laws.

At the same time, billions of dollars in grants have boosted the status of consultants with experience writing grant applications. Many firms are confused by having to write a 30-page proposal and figuring out who the “non-federal partners” are. Mr McCormack noted that some of the grants being offered now “can make or break a business model”.Take a company to chase six dozen ManoSecond Each grant is worth $10 million, he said. “Isn’t $100,000 worth $100,000 for a professional to help you develop your proposal, determine which offices on Capitol Hill you should visit and strategize?”

ecological niche

Professional consulting firms are stepping in to provide businesses with Irish Republican Army Plead all these new valuable skills in one place. Boundary Stone Partners is a prominent example of this trend, employing many former ManoSecond official.Like Mr. McCormack, Boundary Stone co-founder Brandon Hurlbut served as ManoSecond chief of staff. Jeff Navin, another co-founder, says the company aims to act as a translator between clean energy policy makers, technologists and investors: “Those three groups don’t speak the same language.” Boundary Stone claims to have helped Facilitated the passage of next-generation nuclear reactor demonstration programs (for the benefit of one of its clients, a Bill Gates-backed nuclear start-up called TerraPower) and assisted various solar panel manufacturers in securing profitable domestic production. Illustration of tax credits.

How much influence the green lobby actually wields in Washington is open to debate. Their customers clearly think they’re doing something good. What is even more surprising is that the same is true of some officialdoms. In the Trump era, key employees have either fled the government or been fired, making it “difficult” for agencies to get their jobs done, a lobbyist for a powerful environmental group said. Against this backdrop, many bureaucrats see thoughtful lobbyists as helpful in “getting things done.” Rich Powell, head of ClearPath, an influential climate innovation advocacy group among Republicans, believes they can help seal the big political deals that the energy transition will require. “Swamps are probably the most important ecosystems,” he said.

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