Tom Steyer Talks Climate, Billionaire Tax In First Major Interview After California Primary Loss

Billionaire investor and climate activist Tom Steyer came up short in his run for governor, placing third in the state’s June primary.

Now he’s back — and going on the climate offensive.

Steyer ran as a progressive, promising to break up utility company “oligarchies,” take on oil companies and redistribute wealth in the country’s richest state. That message wasn’t enough to vault him over fellow Democrat Xavier Becerra or Trump-backed Republican Steve Hilton. But Steyer isn’t changing course.

POLITICO spoke with Steyer, in his first major interview after the primary, about California’s climate goals, a billionaire tax on the November ballot and a wave of progressive campaign victories that has skipped over the Golden State.

This interview has been edited for length and clarity.

You focused a lot on the issue of climate change during your campaign. Now that the primary is behind you, what are your next steps in this arena? 

I started and co-run a company called Galvanize Climate Solutions, which is about investing across a range of verticals in the energy transition. I’ve done that for years. I took a one-week vacation in Tahoe and then started doing that again.

The climate statistics are terrible. We are getting hotter much faster than people expected. The impacts of that heat are much greater than people expected. It is hitting Californians specifically. It’s hitting us in terms of home insurance because of fires. It’s hitting us in terms of electricity rates. It’s hitting us in terms of the water coming off the Colorado River. It is hitting us in terms of the price of gasoline because there’s war in Iran, and the supply of oil around the world is curtailed, and the companies that sell gasoline to Californians are selling it at a price which has nothing to do with their costs. They’re making record profits at the expense of California.

The price of clean energy has plummeted and continues to plummet. So, what we’re seeing around the world is that virtually all new electricity generation is renewable. The adoption of EVs is going gangbusters. The adoption of solar is gangbusters. Batteries are going crazy. So, the technology is here to turn this around.

But … the narrative is not supporting it. The narrative for most Americans, and that I read every single day, is that if only we could reopen the Strait of Hormuz, everything would be good. We’d be back to cheap energy. And that’s absolutely not true.

What is true is clean energy is much cheaper, and that is why we should be going as hard [on that] as possible, because it not only will bring us cheaper electricity, cheaper cars and cheaper fuel for cars. It will prevent the kind of costs that forest fires bring, that droughts bring, and that floods bring, and extreme heat.

So I want to make these investments, and, to the extent that anyone is willing to listen, I want to make the point that there’s a much better way for California, in terms of jobs, in terms of prices, in terms of economic growth, and in terms of safety and health. I know that’s not the popular opinion, but I have facts on the ground to back me up.

Do you have any immediate policy targets at the moment? 

Look, we have a signature climate bill called cap-and-invest, but no one knows what that means. What it really means is, polluters pay. It was put in place 20 years ago, and it gave polluters a long time to adjust, but it was basically saying if we’re going to stop polluting, we need to make polluters pay for it because that will force them to move to cleaner sources of energy. There has been a move to delay it by five years to give extra permission for oil refineries and other businesses to continue polluting. That flies in the face of the program. Actually, what that’s saying is we need to prolong the fossil fuel economy, to subsidize the fossil fuel economy.

If you ask the people in Altadena or Pacific Palisades, are there costs to climate change? The answer is yeah, there are big costs to climate change. If you ask anybody who has to pay home insurance, there are costs to climate change. And the idea that what we’re doing is subsidizing a continuation of people who are making record profits at our expense, so they can continue not to pay their own costs, so we’ll continue to pick up their costs, so the homeowners of Altadena and Pacific Palisades will come in and pick up their costs — that doesn’t make any sense to me.

It especially doesn’t make sense for this state, which wants to lead the world in every way, including technologically, and wants to develop companies to solve problems. The companies that we’re subsidizing are in Houston. Chevron is a Houston, Texas company. The companies that are actually changing the world are California companies with California workers. It just doesn’t make any sense.

You wrote in a recent blog post that California’s leadership has given way to “climate cowardice.” Say more about that. 

The public discourse is around the need for cheap gasoline and cheap electricity. The people who are selling us gasoline and electricity are making that point. They are also charging us incredibly high prices. … Look, embracing the change has always been the right thing to do in economics. But why do I think this is happening? I think traditional, status quo companies that have been around for a long time make the most money and have the most lobbyists … They are trying to obviously warp the political system.

But I think in addition, very clearly, [President Donald] Trump dominates the airwaves, and he is saying things that are absolutely false and stupid, and they get repeated 1,000 times. But there’s no basis for it. That narrative that he’s telling, that oil is black gold, he took that from “The Beverly Hillbillies” show in the 1960s. That is incredibly stupid. Our future, the future of the world, is moving very definitively and irreversibly to renewables, to batteries, to new technologies, to heat pumps, to electric vehicles. He’s trying to push oil and gas. He’s not letting Americans buy cheap products that are built overseas that are better, and he’s personally, with his failed war in Iran, raised the price of oil at the pump by over a buck for Californians.

The economics here are very clear, and for California to do the wrong thing on this, to me, seems like giving up our leadership.

Some lawmakers are worried that ambitious climate policy is a liability with voters who are worried about the cost of living. Do they have a point? 

The frame there is that clean energy is expensive. That’s bullshit. … I obviously have a point of view on this, and maybe I’m wrong, but my view is that this is and has always been an economic issue. We’re talking about a commodity, the biggest commodity in the world, called energy, and the people who have basically dominated with 20th-century energy, the 20th-century refineries and electricity generation plants, are dominating the airwaves. But the truth is we are going to a completely different place, and the problem is the politicians don’t know it. They still think gasoline is the future. They absolutely do. And the oil companies are out there trying to push that.

Do Californians know this? No. But I want to write as much as possible: Here are the facts. This world is changing. It’s not just that the Iranians are able to keep the U.S. Navy from opening the Strait of Hormuz. It’s also true that the Ukrainians are able to defeat a much larger country with many more people and tanks with drones. The Houthis are having a real impact on fossil fuels with drones. My point is that all these big refineries, pipelines, ships are at risk.

What isn’t at risk are the solar panels on your house. It’s going to distributed clean energy, and our technology, our businesses and our workers should be pushing that. And that’s also the best thing for climate. Solar doesn’t have to go through the Strait of Hormuz.

You criticized Xavier Becerra during the campaign as being in the pocket of Big Oil, but you have since endorsed him. Have you spoken to him since the primary, and do you want to help support him in developing his climate and energy platform?

I really haven’t talked to him. But I’m always happy to help the governor of California do the right thing.

What are your thoughts on Gov. Gavin Newsom’s current push for a proposal on wildfire liability, which some have said shields utilities?

It’s actually sitting on my desk, and I read it. But really understanding what this means is going to be critical. We have a very unusual rule about utilities and their responsibility for wildfires, and I want to understand exactly what this is. I really only saw it yesterday, and before I comment on it, I need to make sure that I actually understand the details.

But, of course, I want to make sure that Californians are taken care of, and I want to make sure that there is protection for them. I want to make sure that we actually use our technology to reduce wildfire risk, and that we also work with homeowners to make sure their houses are hardened because the Earth’s getting hotter, and there’s no question that these risks are going to be greater, not less. At the same time that we fight to stop that increase in heat, we have to adapt to it, be smart, use our technology, and hold people accountable. You have to harden your house, and is that doable? Yes. I talked about this on the campaign.

And then, we have to make sure the insurance companies don’t charge us as if we hadn’t done it. We can dramatically reduce risk, which means we can dramatically reduce the cost of insurance, and we have to insist that insurance costs go down if we reduce the risk. That’s where we have to go.

You supported the billionaire tax when you were running and said billionaires need to pay their fair share, but you haven’t committed to putting any money behind the proposal. Why?

We have dramatic inequality; that’s not right. We have a tax system that is not addressing that. We have a structural deficit. We need to redo that. And I actually came in with [a proposal to tax commercial property at market value], basically saying, as governor, I will pass split roll ASAP, which provides more money over five years than the billionaires’ tax, because the billionaires’ tax, whereas it appears to deal with the problem, is problematic in multiple ways. It’s a one-time tax. The money goes to only one thing. Normally, tax money is distributed to all the different needs of the government, such as education, which gets a very, very small part of this money. So there are multiple issues with this tax that make it less than perfectly designed.

But what’s also true is it is addressing something, which is we have a shortfall in terms of structural deficit, and we have a grossly unequal, increasingly unequal populace in terms of money, and it’s not right. And so, to me, what I said was, this is better than nothing, but this is not the solution. It’s addressing the problem, but in a way that we can do a much better job on, and that’s been my point all along. And when everyone else was against it, I was like, “I can show you what I can do better than this.”

And the truth is, there are real issues for this state in terms of taxing, and we have a screwed-up tax system. And I proposed the first step of something that brings in more money, and that actually doesn’t cause any of the problems.

Why do you think the progressive surge we’re seeing across the country (New York, Michigan, Colorado) seems to be skipping California?

I think there’s a progressive surge in this country because people recognize how unequal this society is. They’re very dissatisfied with today, and very worried about tomorrow, and no one is addressing that with a vision. That’s why people are mad. I think the democratic socialists are at least saying what they want. It’s very hard to discern what the Democratic Party wants. It’s very easy to discern what democratic socialists want. And I think that if you add up all the people who were in the Democratic primary for governor of California, who were progressives in one shape or form, that was the biggest number, no question. So actually, I don’t think it’s skipping California. I think it’s just a function of how many people were running.

Do you think you’d have the biggest impact on climate issues in elected office? Do you plan to run again in the future? 

Look, I think the biggest thing that needs to change on climate is a general understanding of what’s going on. That’s bigger than anything. There’s this sense that fossil fuels are cheap. That’s not true. That fossil fuels are secure and convenient. That’s not true. That we are never supposed to talk about climate change, which is somehow becoming a dirty word. That’s ridiculous, … that’s crazy. [What] we need to do is embrace a vision of the future that’s much more positive, much more healthy, much more realistic and much more inclusive. That’s the [most important] thing anybody can do.