Billionaire has unique role in official Washington: climate change radical
By Juliet Eilperin,
“I feel like the guy in the movie who goes into the diner and says, ‘There are zombies in the woods and they’re eating our children,’ ” Steyer said during a recent breakfast at the Georgetown Four Seasons, his first appointment in a day that included meetings with a senator, a White House confidant and other D.C. luminaries.
It’s a somewhat shocking statement for someone who’s in the running to succeed the cerebral Steven Chu as energy secretary. Granted, he’s a long shot — the leading contender is MIT professor Ernest Moniz, who served as the department’s undersecretary during the Clinton administration — but his backers say his strength lies in combining business savvy with an activist’s passion.
John Podesta, who chairs the liberal think tank Center for American Progress, said Steyer has “got the right skill set, the understanding and attitude to lead an energy transformation in this country.”
“I think he would be a fabulous choice for energy secretary,” Podesta added, “and I’ve let my friends in the administration know that.”
But it’s not as if Steyer, 55, needs an official government perch to make an impact. Armed with his wealth and his political connections, Steyer has played a critical behind-the-scenes role in helping shape the country’s national energy policy. He has helped bankroll two successful ballot initiative campaigns in California since 2010, including one last fall that closes a corporate tax loophole and steers $500 million toward energy-efficiency projects for each of the next five years. He has funded initiatives at the Brookings Institution and the Center for American Progress, along with major research centers at Yale and Stanford. And he has spoken with President Obama about how to pursue climate and energy policy in a second term.
But Steyer is taking on a more prominent public role. On Sunday, he spoke to a crowd that organizers estimated at 35,000, gathered on the Mall to call for a stronger national climate policy.“I’m not the first person you’d expect to be here today. I’m not a college professor and I don’t run an environmental organization,” he said. “For the last 30 years I’ve been a professional investor and I’ve been looking at billion-dollar investments for decades and I’m here to tell you one thing: The Keystone pipeline is not a good investment.”
The move stems from an uncomfortable conclusion Steyer has reached: The incremental political victories he and others have been celebrating fall well short of what’s needed to avert catastrophic global warming.
“If we can win every single battle and lose the war, then we’re doing something wrong,” he said, moments after consuming two mochas on the table before him.
The simultaneous mocha-drinking is understandable: Steyer had arrived just hours before on the red-eye, which he chooses over a private jet to reduce his carbon footprint. He may have built one of the nation’s most successful hedge funds — Farallon Capital Management, named after the waters off San Francisco Bay teeming with great white sharks — but he’s not flashy.
Dressed in a blue button-down shirt, a tan houndstooth blazer and black-and-green neon tennis shoes (when asked the brand, Steyer replies, “They’re the kind of sneakers they sell in the tennis club store when you show up at the club and you’ve forgotten your tennis shoes”), Steyer doesn’t appear radical. He excelled at Phillips Exeter Academy, Yale and Stanford Business School; Steyer and his immediate family are responsible for more than $1.1 million in donations to Democratic candidates since 1990, according to the Center for Responsive Politics.
And while plenty of people seek audiences with Obama on their issue of choice, Steyer is one who can claim at least some degree of influence. Steyer, who has prioritized increasing buildings’ energy efficiency in his work, discussed the matter with Obama during a small dinner in October when the president was on a fundraising swing through Northern California; a couple of weeks later during an MTV interview the president mentioned the idea as a key pillar in how the United States can address global warming .
“The next step is to deal with buildings and really ramp up our efficiency in buildings,” Obama said. “If we had the same energy efficiency as Japan, we would cut our energy use by about 20 percent. That means we’d be taking a whole lot of carbon out of our atmosphere.”
Chris Lehane, one of Steyer’s political advisers and a former aide to both Bill Clinton and Al Gore, said Obama administration officials appreciate the fact that Steyer has not only been a generous financial supporter but also has combined his business and political acumen to score electoral wins.
“There are not many donors who have gone out there and been successful in the political world,” Lehane said.
Steyer, who made his initial fortune engaging in arbitrage, has employed unconventional tactics at times to achieve his goals. In 2010 he teamed up with former Reagan secretary of state George P. Shultz to defeat a proposition financed by Texas oil firms to reverse California’s law capping greenhouse gas emissions. The two men learned a month before the election that they were assured of victory. But rather than save the $10 million they still had on handfor the campaign, Steyer and Shultz decided to spend it so they could win by an even larger margin.
“We didn’t just want to beat it, we wanted to beat it big time,” Shultz said in an interview.
In 2012, Steyer targeted a handful of companies exempted from California taxes, spending $32 million on a ballot initiative toclose that loophole and funnel the money to energy efficiency and education initiatives. He convinced the firms directly affected by the change — General Motors, Kimberly-Clark, Chrysler, International Paper and Procter & Gamble — that their image would suffer if they fought it.
“It just blew me away that he was able to persuade these CEOs of major corporations to say, ‘Guys, we’re going to back away from this,’ ” said Art Pulaski, who heads the California Labor Federation.
Not all Californians are as pleased with Steyer’s efforts, even if they’re impressed by his record. Gino DiCaro, spokesman for the California Manufacturers & Technology Association, said Steyer’s push to wean the state off fossil fuels has raised the cost of manufacturing for its member companies.
“Some of the stuff he’s done doesn’t really take into account the challenges our industry has out here in terms of competing and growing,” DiCaro said. “He hasn’t made it easy on us.”
In the past Steyer had dabbled in politics while simultaneously heading a $20 billion hedge fund. But he stepped down from Farallon Capital at the end of 2012, and he is devoting himself primarily to the Center for the Next Generation — the nonprofit organization that he and his brother Jim established.
Steyer is convinced that global greenhouse gas emissions will have to begin to fall within the next few years or the world will suffer catastrophic consequences. Butwhen he talks to many in his circle — including business leaders and prominent politicians — he finds them oblivious to what he sees as a monumental threat.
“I feel as if people have a completely different time frame than I do,” he said, adding that while U.S. leadership is essential in curbing the world’s carbon output, “We’re not going to lead the world on this unless the American people understand why we’re doing this. . . . Have the American people declared war on carbon? No . . . way.”
Steyer has. On Sunday he returned to Washington to speak at a climate rally urging Obama to block construction of the Keystone XL pipeline, which would transport crude oil from Canada to Gulf Coast refineries. He is preparing to launch a report that will quantify how much inaction on climate change will cost the United States, akin to the 2006 report by Sir Nicholas Stern that estimated climate effects ranging from extreme weather to hotter temperatures could sap between 5 and 20 percent from the world’s future annual economic output.
And Steyer is trying to figure out who can communicate this message in a way that Americans will trust, so they don’t see him and others as people straight out of a zombie movie.
“When you talk about global warming, you’ve lost 90 percent of the public unless you make it real to them,” he said.
Steyer may face long odds, but he seems prepared to approach the situation with a sense of humor. He dons Scottish ties every day — although not those bearing the tartan of his own clan, Murray, because he said it was too ugly. “You gotta dress up for a fight,” he said.
Although he and his college-age daughter braved freezing temperatures at Sunday’s climate rally in Washington, he’s not a masochist. While marching with his daughter and her classmates en route to the White House, he declared, “I look forward to buying everyone a warm drink at the Willard [Hotel]” — proof that perhaps he could fit neatly into the Washington establishment after all.
Alice R. Crites and Steven Mufson contributed to this report.