Global Policy Watch: Energy Is Flagging Insights on burning policy issues from an Indian lens — RSJ Who do you think has a better long-term view of the world? An administration struggling to control inflation and rising oil prices, one that’s facing midterm elections with the lowest approval ratings, or large institutional investors projected to own about 20 per cent of all US listed companies by 2028? I don’t know. I mean, it is conventional wisdom that all that the likes of Blackrock, Vanguard and State Street care about is making profits on their investments. On the other hand, the government is expected to take long-term decisions in the interest of society. But when you own 20 per cent of everything, I would suspect you will conclude there’s no other way to maximise profits except trying to do good for everyone. I mean, there won’t be a lot of arbitrage left anymore in choosing specific industries or sectors. You will have to do ‘sabka saath, sabka vikaas’. No wonder ESG (Environment, Social and Governance) investing has been important for these large institutional investors. That ESG is now a critical agenda tracked by the board of every company because of these investors' efforts. All good. Now, let’s look at the incentives of political parties. It is to win elections. Everything else follows only after you have the keys to power. And elections in democracies are a permanent affair. There’s a key election of some kind happening every other year. Will a political party craft a policy that’s painful in the short run but good in the long run? They do, but it requires a combination of inspiring leadership or ideology, a looming crisis and a powerful communication strategy to walk on this difficult path. That’s rare. Instead, what you have is parties taking the easy, opportunistic way out while hoping it will somehow make sense in the long run.  Two Roads Diverged Here are two news items from last week for you. #1: Democrats may be on the verge of passing historic climate legislation after all. The $369 billion of climate spending in the Inflation Reduction Act that Sen. Joe Manchin (D-WV) announced on Wednesday includes funding for clean energy and electric vehicle tax breaks, domestic manufacturing of batteries and solar panels, and pollution reduction. If the bill’s policies work as intended, it would push American consumers and industry away from reliance on fossil fuels, penalize fossil fuel companies for excess emissions of methane, and inject needed funds into pollution cleanup. The bill would use tax credits to incentivize consumers to buy electric cars, electric HVAC systems, and other forms of cleaner technology that would lead to less emissions from cars and electricity generation, and includes incentives for companies to manufacture that technology in the United States. It also includes money for a host of other climate priorities, like investing in forest and coastal restoration and in resilient agriculture. #2: Blackrock warns it will vote against more climate change resolutions BlackRock (BLK.N) said on Tuesday it expected to support fewer shareholder resolutions on issues such as climate change in the current season of annual general meetings, as many proposals were too prescriptive. While BlackRock said its view on the importance of managing climate risk remained unchanged and it continued to engage with companies over their efforts, a number of resolutions put forward at recent AGMs were too constraining on boards. Among such resolutions that it said it could oppose were those requiring management to stop providing finance to traditional energy companies, or those requiring alignment of bank business models to a specific climate scenario. Among votes that BlackRock has already opposed was an April 13 call for Canadian lender Bank of Montreal to adopt a policy to link financing with the International Energy Agency's Net Zero Emissions by 2050 Scenario. Wh