After two and half years of telling Democrats and constituents he recognized the importance of protecting West Virginians against the ravages of unchecked climate change, Sen. Joe Manchin last week suddenly announced he will not support any new climate-related spending. That reversal is a huge ethical and political problem in itself; his claim that climate action will exacerbate inflation is flagrantly counter-to-fact, and dangerous.

Most West Virginians are looking for a life after coal. The future of sustainable Main Street economies will be driven by climate-smart upgrades to infrastructure, energy, and small business. Image: Kevin Ku.

If these were normal times—and we weren’t facing the compounding cost and devastation of worsening climate change—it is always worth considering: spending of the wrong kind at the wrong time can push wages and prices up. If both wages and prices start to spiral, and that spiral starts to make the cost of living unaffordable, that’s unhealthy inflation. But these are not normal times, and we are facing those devastating climate costs, now.

The West Virginia Center on Budget and Policy found in October of last year that Sen. Manchin’s plans to scale back the Build Back Better legislation would cost the people of his state 10,000 jobs per year. Their report went on to criticize Sen. Manchin’s economic reasoning, noting:

“Scaling back the Build Back Better agenda would not only mean delivering fewer tangible benefits to West Virginia families, it would also severely compromise the recovery plan’s value as macroeconomic insurance against the recovery waning in the coming years.”

The result then, as now, was West Virginians being left without critical investments in infrastructure, economic recovery, and job creation. The dynamics of the current cost-of-living crisis are not, strictly speaking, an inflation problem; they are much more about access and affordability, and that is the result of how fossil fuels are financed and distributed.

There is another factor we must take into account: as climate-responsible energy systems take over, polluting energy systems will decline. Spending to change how we harness and deliver energy is not an artificial boost to overall economic activity; it is a shift in the composition of that activity, with real efficiency gains for the whole economy.

That shift means inflation would be less likely, even in normal times and before accounting for climate costs.When we factor in the harm caused by global heating pollution—and add in the harm from particulate pollution and physical health impacts from the extraction, refining, and burning of fossil fuels—those efficiency gains are even more pronounced.

The effect of shifting to climate-smart distributed clean energy systems will be a more agile, stable, inclusive, and consumer-friendly economy—one where small towns and Main Street economies can diversify and thrive. The status quo, with heavy dependency on polluting energy systems, cannot deliver that kind of sustainable economic recovery.

Let’s turn now to what is driving inflation:

  • Oil prices are the single most significant cost-increase factor in all sectors.
  • You might have noticed fuel costs more than ever… that’s not because the oil business is paying more to operate; it’s because key players in the oil sector are profiteering from unusual conditions.
  • Russia’s illegal invasion of Ukraine—a campaign of genocidal terror by an oil-dependent fascist regime—has disrupted food supplies and created turmoil in energy markets.
  • That is a distortionary pressure, in macroeconomic terms, and some very evil people with similar tendencies to Putin are taking advantage.
  • Food security is collapsing, and millions of lives are at risk as a result, across the world.
  • Distortionary disruptions and price spikes in fossil fuel commodities and food commodities are creating a global cost-of-living crisis.

All of this adds up to one clear fact Sen. Manchin seems to want to ignore: Americans would be much better off without the insidious, destabilizing volatility of fossil fuels. Even historic coal communities, most of which derive zero benefit from coal nowadays, would benefit from investment in smart, distributed clean energy systems.

Many of those boom-bust former coal communities have less than zero private sector economic activity. Is Sen. Manchin telling them that investments that could give them a chance at a Main Street economy cannot be allowed because the economic knock-on effects would make their lives harder and less affordable? Obviously, he isn’t saying that to them in person. But that is what his inflation argument argues.

After fossil fuel price distortions, the invasion of Ukraine, underinvestment in supply chain resilience, and economic uncertainty due to the ongoing COVID pandemic are the next leading drivers of the current spike in prices. Prices are notspiking because everyone is earning too much and spending wildly.

Commercial and financial incentives are skewed, and the resilience test of the current multi-crisis is revealing that. We need corrective measures, and they shouldn’t only be actions by the Federal Reserve that slow down lending and investment. There are economically efficient corrective measures that would generate climate income for most West Virginians.

Climate-smart investment in infrastructure, energy systems, electrification, food systems, and diversified local economic development, will address each of the leading drivers of ongoing inflation: fossil fuel prices, vulnerability to ripple effects of Russia’s illegal invasion of Ukraine, the need for more resilient supply chains (and energy systems), and COVID-related shocks.

In many counties across the US, including many West Virginia counties, there are no hospitals, or there are clinics with no ICU beds. The lack of healthcare infrastructure is often linked to a low level of everyday economic activity, corresponding to reduced opportunity, government revenues, public services, and quality of life. All of these result in deep underinvestment in local health systems, and that makes the impact of COVID and other degrading health conditions more disruptive.

For a chance at real and sustained inclusive and localized economic development, the people of West Virginia need new climate-related investment. They need federal spending and incentives to transition energy infrastructure, to not only electrify, but optimize and expand electrification of transport infrastructure, and to support critical small business innovation to harness new technologies and new modes of investment.

In its much-lamented ruling in West Virginia v. EPA, the Supreme Court acknowledged that:

“Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day.’”

It then noted “A decision of such magnitude and consequence rests with Congress,” effectively calling on (without ordering) the House and Senate to put forward a clear plan to address the danger posed by unchecked climate change. At local and state levels, and in the private sector, Americans are working to make that transition happen; Congress needs to provide the right investments, incentives, and regulatory interventions to support the nation’s success in this future-building work.

Blocking new climate-related spending is committing to shrink the overall investment in new and ongoing opportunity for the people of West Virginia, while giving the industry most responsible for inflation even greater influence over the lives of people who can least afford it. To fight the current cost-of-living crisis, we need focused and sustained efforts to transform food, energy, and finance, so they do more for places like West Virginia.