WSJ — Biden climate policy, opposed by MTG & the MAGA GOP, is bringing billions to red states like Georgia

[jserraglio]

WALL STREET JOURNAL

Biden’s Green Subsidies Are Attracting Billions of Dollars to Red States

GOP-leaning states, many with ample sun, wind and available land, are luring clean-energy projects boosted by legislation their representatives opposed

Republican-leaning states are attracting most of the clean-energy investments spurred by the Biden administration’s signature Inflation Reduction Act, a bill that passed the U.S. Congress without any Republican votes.

The act, which was signed into law in mid-August, offers beefy tax credits and other support for clean-energy projects ranging from wind farms to factories that make batteries, solar components or hydrogen. The incentives have improved the economics of those projects and helped spark a flood of investment announcements from companies including the solar manufacturing unit of South Korean conglomerate Hanwha Group and Norwegian startup Freyr Battery.

Those announcements have so far clustered heavily in red states, where makers of components for electric vehicles, batteries, wind and solar equipment have proposed tens of billions of dollars of new investments in locations such as Georgia, Arizona and Texas, according to an analysis by The Wall Street Journal.

The Journal monitored large manufacturing investments in batteries, solar and wind components announced after the law was passed. Of nearly 30 such announcements where locations were given, all but three had chosen to set up facilities in Republican-leaning states, as defined by the Cook Political Report based on voting during the past two presidential elections. Together, they represent more than $35 billion in potential investments, the Journal found.

Red-leaning areas are also hosting the bulk of clean-power generation projects currently poised to benefit from the new law’s subsidies. Republican-held congressional districts harbor 82% by capacity of all utility-scale wind or solar farms and battery-storage projects that are currently in late-stage development, according to an analysis by business lobby American Clean Power.

Many politicians in those districts have opposed the Biden administration’s renewable-energy and climate push, and none of their Congressional representatives voted for the law. Still, local lawmakers and communities in those districts are welcoming an inflow of green projects, company executives and industry experts say.

In many cases, red-leaning states and districts have attracted companies with conditions and policies seen as business friendly, industry experts say. Those include lower costs for everything from labor and electricity to taxes, as well as looser controls on permitting and the use of land, they say.

“When it comes to these investments themselves, they tend to be nonpolitical. Everyone supports manufacturing in the United States,” said Scott Moskowitz, head of market strategy for Hanwha’s Qcells U.S. unit, which earlier this month announced it would spend $2.5 billion to expand its Georgia-based solar-panel factory and build a new set of facilities to produce components as well.

Qcells’ factory is in a district held by Rep. Marjorie Taylor Greene, a Republican who has been skeptical about the dangers of climate change and tweeted that the Inflation Reduction Act “forces Americans on the energy disaster Green New Deal.”

Qcells hasn’t spoken to Ms. Greene, but overall the elected officials of both parties welcome its investment, said Mr. Moskowitz: “They might not agree on some of the policy remedies, but they certainly all want us to succeed.”

Ms. Greene’s office didn’t respond to requests for comment.

Georgia has attracted money “despite the Inflation Reduction Act, not because of it,” said the office of Republican Gov. Brian Kemp—a champion of the state’s clean-energy investment.

Wind and solar-power development has been strong in red-leaning Sun Belt states because many of them get larger amounts of sun and wind, and have more land available than more densely populated, blue-leaning areas such as the Northeast, industry experts say.
“Development follows the resource,” said JC Sandberg, American Clean Power’s chief advocacy officer.

Proximity to those development projects was one reason Qcells decided to expand its solar panel-making facilities in Georgia, said Mr. Moskowitz.

To be sure, other businesses where the new law is expected to spur a flood of investment—such as the deployment of battery-storage facilities or offshore wind—are growing in blue states as well as red. Both Democratic- and Republican-leaning regions are vying for federal support as well as tax credits in another buzzy area: the development of facilities to manufacture and distribute hydrogen, seen as a low-carbon alternative to fossil fuels.

Many of the recently announced manufacturing deals were likely planned before the Inflation Reduction Act became law, and their locations reflect economic and investment trends that have been years in the making, industry experts say.

Workers and employers have been migrating to red states in the South and Central parts of the country from higher-cost and Democratic-leaning coastal areas, particularly after the pandemic.

Many companies are expanding in states where they or related companies already had a foothold. In Georgia, recently a recipient of clean-energy deals, Qcells is building on an initial investment it made in the state in 2018. Meanwhile, a spate of battery-manufacturing investments have followed the announcement last May that Hyundai Motor Co. will build a $5.5 billion electric-vehicle factory in Bryan County.

A top concern of many manufacturers, particularly in energy-intensive industries such as battery-making, is the cost of power, said Didi Caldwell, president and founding principal of South Carolina-based project-siting consultancy Global Location Strategies.

Those costs tend to be lower in Southern and Central states such as Republican stronghold Tennessee, where industrial customers were paying an average of 6.89 cents per kilowatt-hour in October, compared with Democratic powerhouses such as California, where businesses were paying almost three times as much, according to the Energy Information Administration.

Manufacturers are also tending to locate in regions where the cost of living and salaries are relatively low, yet skilled employees are available. That has made Southern states popular, said Corinna Frye, head of the U.S. clean-energy team for hiring consultancy LVI Associates.

Private-industry employers were paying an average of $35.65 per hour in the South—largely red-leaning states—in September, versus $43.84 in the generally Democratic-tending Northeast, according to figures from the U.S. Bureau of Labor Statistics.

The availability of skilled labor was the top reason battery-maker Freyr decided to put its factory in Georgia, said Jeremy Bezdek, the company’s executive vice president of global corporate development and president of the U.S. battery unit.

[Rach3]

A good analysis of parts of the Country whose leaders failed to forsee and comprehend what the future was bringing , thus failed to prepare and assist its populace to re-tool and re-educate, and instead clung and still cling to the ways,rules,mores of the past as the solution to the future's challenges.


Paul Krugman, NYT Jan.27,2023

Rural resentment has become a central fact of American politics — in particular, a pillar of support for the rise of right-wing extremism. As the Republican Party has moved ever further into MAGAland, it has lost votes among educated suburban voters; but this has been offset by a drastic rightward shift in rural areas, which in some places has gone so far that the Democrats who remain face intimidation and are afraid to reveal their party affiliation.

But is this shift permanent? Can anything be done to assuage rural rage?

The answer will depend on two things: whether it’s possible to improve rural lives and restore rural communities, and whether the voters in these communities will give politicians credit for any improvements that do take place.

This week my colleague Thomas B. Edsall surveyed research on the rural Republican shift. I was struck by his summary of work by Katherine J. Cramer, who attributes rural resentment to perceptions that rural areas are ignored by policymakers, don’t get their fair share of resources and are disrespected by “city folks.”

As it happens, all three perceptions are largely wrong. I’m sure that my saying this will generate a tidal wave of hate mail, and lecturing rural Americans about policy reality isn’t going to move their votes. Nonetheless, it’s important to get our facts straight.

The truth is that ever since the New Deal rural America has received special treatment from policymakers. It’s not just farm subsidies, which ballooned under Donald Trump to the point where they accounted for around 40 percent of total farm income. Rural America also benefits from special programs that support housing, utilities and business in general.

In terms of resources, major federal programs disproportionately benefit rural areas, in part because such areas have a disproportionate number of seniors receiving Social Security and Medicare. But even means-tested programs — programs that Republicans often disparage as “welfare” — tilt rural. Notably, at this point rural Americans are more likely than urban Americans to be on Medicaid and receive food stamps.

And because rural America is poorer than urban America, it pays much less per person in federal taxes, so in practice major metropolitan areas hugely subsidize the countryside. These subsidies don’t just support incomes, they support economies: Government and the so-called health care and social assistance sector each employ more people in rural America than agriculture, and what do you think pays for those jobs?

What about rural perceptions of being disrespected? Well, many people have negative views about people with different lifestyles; that’s human nature. There is, however, an unwritten rule in American politics that it’s OK for politicians to seek rural votes by insulting big cities and their residents, but it would be unforgivable for urban politicians to return the favor. “I have to go to New York City soon,” tweeted J.D. Vance during his senatorial campaign. “I have heard it’s disgusting and violent there.” Can you imagine, say, Chuck Schumer saying something similar about rural Ohio, even as a joke?

So the ostensible justifications for rural resentment don’t withstand scrutiny — but that doesn’t mean things are fine. A changing economy has increasingly favored metropolitan areas with large college-educated work forces over small towns. The rural working-age population has been declining, leaving seniors behind. Rural men in their prime working years are much more likely than their metropolitan counterparts to not be working. Rural woes are real.

Ironically, however, the policy agenda of the party most rural voters support would make things even worse, slashing the safety-net programs these voters depend on. And Democrats shouldn’t be afraid to point this out.

But can they also have a positive agenda for rural renewal? As The Washington Post’s Greg Sargent recently pointed out, the infrastructure spending bills enacted under President Biden, while primarily intended to address climate change, will also create large numbers of blue-collar jobs in rural areas and small cities. They are, in practice, a form of the “place-based industrial policy” some economists have urged to fight America’s growing geographic disparities.

Will they work? The economic forces that have been hollowing out rural America are deep and not easily countered. But it’s certainly worth trying.

But even if these policies improve rural fortunes, will Democrats get any credit? It’s easy to be cynical. Sarah Huckabee Sanders, the new governor of Arkansas, has pledged to get the “bureaucratic tyrants” of Washington “out of your wallets”; in 2019 the federal government spent almost twice as much in Arkansas as it collected in taxes, de facto providing the average Arkansas resident with $5,500 in aid. So even if Democratic policies greatly improve rural lives, will rural voters notice?

Still, anything that helps reverse rural America’s decline would be a good thing in itself. And maybe, just maybe, reducing the heartland’s economic desperation will also help reverse its political radicalization.