Time to Wake Up 301: A Dangerous Precipice

Sailors and pilots know to look out for dangerous weather ahead; politicians can get lost in the moment. We are on the verge of a major economic shock, but we in Congress are lost in the moment, not paying attention. When that economic shock hits, I want people to know how and why we failed to protect them.

The shock is simple. Climate change makes property insurance unpredictable, so insurance prices soar, insurers withdraw from high-risk regions, and fake or flimsy insurance populates the market. As the insurance market goes, so goes the mortgage market, given the many linkages between insurance and mortgages. As mortgage markets fail, property values fall, since there is little demand for real estate properties that are unmortgageable. The combination threatens a reprise of the 2008 Great Recession, or worse. It's what economists call "systemic" risk - the scariest word in the economic lexicon because it means the damage cascades through the entire economy, hitting everyone. Remember 2008.

This cascade is pretty broadly predicted, by insurers, economists, bankers, regulators - even the Big Short guy who predicted the Great Recession. The Economist magazine has warned of a $25 trillion hit to global real estate values. Even climate-shy Fed Chair Powell predicted whole regions of the U.S. would soon go without mortgages.

So why the Big Fail? Why aren't we paying attention to the Great Climate Insurance Collapse that is looming? To understand that, you have to understand the Four Phases of Climate Denial, because fossil-fuel-funded climate denial is the root of the danger.

Phase One of climate denial for the fossil fuel industry was simple: bury the evidence. Decades ago, scientists in the fossil fuel industry warned about climate change. Exxon, Chevron, Shell, American Petroleum Institute, all got internal warnings decades ago of the danger ahead. Instead of facing up to the problem, and looking for solutions, they buried the evidence, and acted as if they'd never been told. Just keep it secret, was Phase One.

Phase Two was to begin actively misleading the public. Two things coincided to kick off Phase Two. One was that scientists outside the fossil fuel industry began to publicly discuss the climate dangers of fossil fuel combustion - and not just fringe scientists, either, but leading scientists, from places like NASA. NASA's pretty good with science - you know, man on the moon, rovers driving around on Mars. Anyway, Congress perked up; hearings were held; and what Exxon and others already knew was brought out into the public daylight.

The second thing kicking off Phase Two was a federal court decision against the tobacco industry and its front groups for fraudulently misleading the public about the dangers of tobacco. Federal judge Gladys Kessler (God rest her soul; she passed away two years ago in March) put the tobacco industry and its front groups under court order to stop the lying and knock off the fraud. No more lying; no more fraud; that decision put the tobacco industry's denial operation out of work, at least on tobacco. But it gave fossil fuel a pre-fab denial operation to take over; and suddenly a lot of people and a lot of front groups, who had been "expert" in how tobacco smoke wasn't bad for you, suddenly became "expert" in how fossil fuel emissions wouldn't wreck the Earth's climate.

So that kicked off Phase Two: with public recognition of the dangers, and attention in Congress, the tobacco fraud operation became the fossil fuel fraud operation: same entities, same people, same tactics. For years, the fossil fuel industry used that operation, and expanded and multiplied that operation, to sow false doubt about climate science and to fraudulently suggest we'd all be worse off if we solved the fossil fuel emissions problem.

One sidebar here: that all seems terribly expensive. Well, yes and no. Yes, in that billions and billions of dollars were spent on the climate denial fraud operation. Just the work to capture the Supreme Court so it would be friendly to fossil-fuel polluters has been estimated at roughly $600 million, and that work was just one aspect of the vast climate denial fraud operation. On the other hand, you have to understand what the climate denial fraud operation was protecting: the fossil fuel industry floats on the biggest economic subsidy in human history, thanks to its free-to-pollute business model. The value to fossil fuel interests of that subsidy, from being allowed to pollute for free, has been calculated by the International Monetary Fund at north of $600 billion dollars, every year - every single year, $600+ billion dollars worth of free pollution, that we all pay for in various ways. Honest calculations of what's called the "social cost of carbon pollution" differ a bit, but they are all in the hundreds of billions of dollars.

So when the fossil fuel industry picked up the tobacco fraud operation and multiplied it, cost was no object. Imagine they spent $7 billion a year on their climate fraud operation; that pays them back $100 every year for every single dollar spent. If they spent $70 billion a year, it's a ten-to-one payback. It makes the climate fraud operation likely the most lucrative segment of the fossil fuel industry.

Let's just say, Phase Two was robust. Over a hundred front groups; billions of dollars; stables of fake scientists; massive Madison Avenue propaganda campaigns, even attack goons to go after scientists and reporters - it was, and is, probably the biggest fraud operation in history.

But a fair campaign of lies against truth, even with billions of dollars behind the lies, doesn't guarantee a win for the lies, so Phase Two had its limits.

That brings us to Phase Three, unleashed by the Citizens United decision, a truly toxic decision delivered by an all-Republican panel of five on the Supreme Court. That decision did two things. One, as a legal matter, it unleashed infinite special-interest money into the political system. Two, as a practical matter, it allowed that money to be anonymous - what's called dark money, flowing into the political system through front groups that obscure the actual donor, keeping citizens in the dark about who's who in the political arena, and who's behind what they're being told.

The fossil fuel industry sought that decision, was prepared for that decision, and moved aggressively to flood dark money into elections. It's a whole separate speech about fossil fuel's role in that decision, but the important thing was that they won. Dark money corruption now could buttress climate denial fraud. In the contest between truth and lies, lies now had not only billions, but an enormous new dark-money thumb on the political scale.

There's a famous saying, that it's hard to get someone to understand something when their salary depends on them not understanding it (thank you, Upton Sinclair). Well, right away, the Republican Party came to depend on that fossil fuel dark money, and no surprise, its understanding of climate change vanished.

It wasn't always like this, not on corruption, not on climate denial. SuperPACs didn't even used to exist; non-disclosing 501c4s stayed out of political elections; entities like Donors Trust that exist solely to launder off donor identities just were not a thing; shadowy political front groups and shell corporations weren't even worth setting up, until secret political spending was allowed to surge into the billions. That whole, new, corrupting, toxic political ecosystem has developed to enable dark money power.

Climate denial's the same: in the three years after I came to the Senate and before the toxic decision in Citizens United, big beautiful bipartisan Senate climate bills were common - I can think of four offhand, real ones, that would have really reduced emissions - and Republican presidential candidate John McCain ran in 2008 on a perfectly decent climate platform. No denial, no fraud.

Remember, it once was that way.

Then Citizens United was decided in January of 2010, and since that day, there has not been a single serious bipartisan climate bill in the Senate. Not one. The echocardiogram of bipartisan Senate climate action blipped, and flatlined - now for over fifteen years. The combination of the fossil fuel industry's massive climate denial fraud operation, and the fossil fuel industry's massive dark money political corruption operation, was lethal. Just as the fossil fuel industry intended, these crooked semi-covert operations protected its annual $700 billion freedom-to-pollute subsidy.

The legendary political wheeler-dealer Mark Hanna said, "there are two things that are important in politics. The first is money, and I can't remember what the second one is." Historian John Barry observed, "when you mix politics and science, you get politics." Up against that kind of money in politics, science never stood a chance against fossil fuel's lies.

Now we are in Phase Four, the phase where an increasingly desperate fossil fuel operation switches from defense to offense. Burying the evidence, running the climate denial fraud operation, and corrupting politics with dark money, all were essentially defense: at all costs, at ALL costs, protect that free-to-pollute $700 billion annual subsidy. Phase Four is different. Phase Four is fossil fuel on offense: using the power of government to crush fossil fuel's clean energy competition. Phase Four kicked off with Trump.

Fossil fuel may be an evil industry, but it's not a stupid one. It knows it's losing. It sees the clean energy cost trends. It knows free clean fuels like the sun and wind must inevitably win. It knows that a commodity's price set by a foreign cartel will sooner or later blow up in its face. It knows that polluting for free - contrary to moral as well as economic and environmental principles - can only be protected for so long. It knows that last year, 95% of new power coming onto the grid in the United States was clean power: wind, solar, and battery storage. Fossil fuel knows its days are numbered.

So it has infiltrated the Trump administration and is running the United States government for its own benefit from the inside. There's a kind of wasp, that injects its larvae into another bug, and its larvae then take over the command-and-control systems of that unfortunate bug from the inside - the larvae drive the bug around like you or I might drive a car around, except that they're eating it from the inside at the same time. That's the image to keep in mind about the corrupt Trump regime, and who's driving it.

Under Trump, the government of the United States is being driven by its fossil-fuel larvae to attack cheaper, cleaner, less-subsidized energy competitors that are winning against polluting fossil fuel. There was a time when Republicans used to say government shouldn't pick winners and losers - like so many vanishing Republican "principles," what a laugh that one now is. Trump asked this industry for a billion dollars in campaign cash, and who knows what he got, but it was provably hundreds of millions. The Republican Party is as dependent on fossil fuel dark money as a deep-sea diver is on his air hose: pinch the flow just a little, and the diver will dance whatever jig he's told to dance to get his air flow back. So Republicans dance the fossil-fuel denial fraud jig.

Just a highlights reel is enough to expose the rot:

Trump's energy executive order denied that solar and wind energy were even energy, violating the very dictionary;

Republicans went to bat using the Congressional Review Act to defend the worst methane leakers, the ones who weren't even meeting their own industry standards - "keep leaking, guys" was the message;

Senate Republicans went nuclear, overruling our Parliamentarian, to undo the auto emissions standards followed by much of the country, never mind the damage to the auto industry;

Trump illegally shuts down nearly-finished wind farms, whose clean electrons would displace gas-generated electrons as soon as next year, those clean electrons also saving consumers tens of millions - less pollution, more savings, "can't have that";

they've even undone the social cost of carbon rules, as if the pollution wasn't real, and are trying to undo the endangerment finding, as if the pollution isn't a danger.

It's all a pack of lies and nonsense, but it has a purpose: crush America's clean energy industry. (It's a separate speech what economic damage that does to America in international competition as the rest of the world moves to clean energy and we get left behind.)

So where are we? Thanks to fossil fuel's massive climate denial fraud and dark money political corruption, storm clouds loom ahead. Florida is our preview of coming attractions: an insurance market in grave distress; mortgage markets beginning to tremble; middle-class families finding it hard to sell homes. The chief economist of Freddie Mac some years ago predicted this cascade - from insurance, to mortgages, to property values, to what he then called "a coastal property values crash" that would hit the entire economy like the 2008 Great Recession.

Note the word "coastal" - it's not just coastal anymore. Wildfire now matches coastal as an added threat that can trigger that economic cascade. On top of that looms the long-predicted "carbon bubble," when the fossil fuel industry collapses in a sudden and disorderly fashion, because we were irresponsible about a gradual and reliable energy transition. It's not coastal OR wildfire OR carbon bubble collapse; all three could happen, each collapse making the others faster and more deep and dangerous.

Remember Hemingway's notorious line that you go broke gradually, and then all at once. What could provoke this already-gradual collapse, to go "all at once"? One scenario is related to OPEC. Say a low-cost oil and gas producer like Saudi Arabia decides to sell fossil fuel at cost rather than the OPEC cartel price, because they see it's time to make the move for the exits and sell what they can while they still can. The American fossil fuel industry rapidly collapses, because our fossil fuel industry only is profitable at puffed-up OPEC cartel prices. Instant crash.

Another scenario is that Fannie and Freddie stop accepting mortgages insured by Florida's flimsy pop-up property insurance companies, dozens of which have already gone bust since Hurricane Irma in 2017. It's a huge taxpayer liability for Freddie and Fannie to assume all that risk. Local Florida banks won't hold those mortgages, because the thirty-year risk is not survivable. Florida becomes a region Chairman Powell predicted, where you can't get mortgages anymore. A massive asset repricing follows that triggers "systemic" economic damage, perhaps even cascading globally, as the Economist magazine warned.

I'm not sure we can save ourselves any longer. We've blown so many chances. The remaining pathway to climate safety is steep, and narrowing; and the climate chasm deepens by the day. The evil forces that put us in this danger are more powerful, desperate, and malevolent than ever. The massive economic shock so many foresee could come next week, next month, or next year. It may now be too damned late to wake up. But I for damned sure want people to know why we got to this dangerous precipice, and who is to blame.

Chalk it up to a massive, semi-covert operation, of industrial-scale disinformation and dark-money influence, run against our country from within, by a polluting industry fighting to pollute for free, and the politicians who enabled it, for money.

I yield the floor.