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The story of natural gas taxes and bans this election cycle is far more nuanced than that.
Berkeley, California and Washington State put the transition to all-electric buildings on the ballot last week, and in both cases, it seemed to fail the test. Voters in Berkeley overwhelmingly rejected a proposed tax on natural gas that would raise money for electrification projects. In one fell swoop, voters in Washington State repealed several of their nation-leading policies that encourage electric over gas appliances and barred cities and towns from passing similar policies in the future.
On the face of things, the results appear to show voters retreating from ambitious climate action and rejecting electrification — a concerning signal at a time when federal support for decarbonization is about to evaporate and state and local leadership to cut emissions will become paramount. But the specific circumstances behind each vote suggest that’s not the whole story.
The Berkeley proposal was submitted by a small group of activists who knew it was more ideologically driven than politically feasible, and it proved to be controversial even among diehard climate advocates in the city. The Washington State initiative slid onto the ballot just three months before the election and ultimately passed on a razor thin margin. The two cases offer distinct lessons and takeaways, but to climate advocates, a budding backlash to electrification is not one of them.
The Berkeley proposal, otherwise known as Measure GG, was largely written by one person. Daniel Tahara is a software engineer at Tesla by day, and a climate activist by night with 350 Bay Area, a local chapter of the national climate advocacy group 350.org. For the past few years, he’s been animated by a question that I, too, am frequently asking: How are most people going to afford the steep cost of retrofitting their homes to use electric appliances?
To Tahara, finding an answer became more pressing last year when the Bay Area Air Quality Management District, a regional authority that regulates pollution, approved rules to phase out the sale of gas appliances. Starting in 2027, Berkeley residents will no longer be able to purchase a new gas-fired water heater if their old one fails — they’ll have to go electric. The rule applies to gas-fired furnaces and boilers in 2029. “We've got a lot of old buildings,” Tahara told me. “They would need a lot of electrical work to support new appliances, and people just don't have the money for it.”
His solution was Measure GG, an ordinance that would have imposed a tax of $2.96 per therm of natural gas used by buildings larger than 15,000 square feet. The estimated $26.7 million per year raised by the tax would go into a fund to help everyone else in town pay for electrification retrofits.
Tahara rallied a number of local environmental and community groups around the idea, but he did not have the support of the bigger non-profits and advocacy orgs that work on electrification policy in California, including the Building Decarbonization Coalition, Rewiring America, RMI, the Sierra Club, or the Natural Resources Defense Council.
"Any large blanket tax hike without input from those it would impact, no plans for a managed transition to the new fees, and no analysis on who is most likely to benefit or be burdened is likely to face real challenges with voters,” Alejandra Mejia Cunningham, the senior manager of building decarbonization for the NRDC, told me via email. “It is very important for tax-based policy proposals to be robust and thoroughly socialized."
I also talked to several Berkeley-based electrification supporters who voted no on Measure GG. Tom Graly, who chairs a local electrification working group, told me part of the reason the policy proved so controversial is that it singled out some of the city’s most beloved institutions, such as the Berkeley Bowl supermarket, a local chain, and the Berkeley Repertory Theater. The theater estimated the tax would cost it up to $69,000 per year, while converting off of gas would cost millions. “This well-intentioned ballot measure with its immediate implementation would be very harmful to our struggling organization,” Tom Parrish, the theater’s managing director said in a statement for the “No on GG” campaign.
Tahara based the tax on estimates for what’s called the “social cost of carbon,” or the projected economic damage that every additional ton of carbon dioxide put into the atmosphere will cause. But the number Tahara chose was on the high end — more than double the number the Biden administration uses when it weighs the costs and benefits of new regulations on carbon. If passed, the tax would more than double the cost of using natural gas in large buildings. He said some national groups gave him feedback on the proposal, like phasing in the tax over time and building in more exemptions, which he might consider for a future version. But he and his partners on the measure wanted to preserve their core thesis, which was that climate damages are already happening and are unaccounted for.
“I think part of our responsibility as local activists is to put out new ideas, to push the status quo,” he said. “I don’t think there’s been a lot of that that’s been happening in the last couple years.”
In Tahara’s view, the measure failed because the opposition campaign had a lot more money, and because even though Berkeley is often called the birthplace of the electrify everything movement, there’s still a lot of people in town who are completely unaware of the harm natural gas causes to the climate and to public health. On that, Graly agreed. “There's a huge education gap,” he said. “People just don't think about hot water. They turn on the faucet and the water is hot, and they're happy.”
Initiative 2066 in Washington State was a wide-ranging proposal to both roll back existing policies and preempt future ones. It was so wide-ranging, in fact, that its opponents believe it’s illegal under the state’s “single subject” rule for ballot measures, and they plan to fight it in court.
If the measure stands, it will invalidate the state’s nation-leading residential and commercial energy codes that strongly incentivize builders to forego gas hookups. It will remove a provision in state statute that requires Washington’s energy codes to gradually tighten toward zero-emissions new construction by 2031. It will repeal key parts of a law the state legislature passed earlier this year that require Washington’s biggest utility, Puget Sound Energy, to consider alternatives to replacing aging gas infrastructure or building new gas pipelines. And it will ban cities and towns from passing any local ordinances that “prohibit, penalize, or discourage” the use of gas in buildings.
The initiative was one of four put on the ballot by Let’s Go Washington, a group bankrolled by hedge fund manager and multimillionaire Brian Heywood, and had the Building Industry Association of Washington as its primary sponsor, alongside a number of other pro-gas, pro-business, and realty groups.
There’s no doubt 2066 is a significant setback in the state’s progress toward cutting carbon emissions. But when I asked climate advocates in Washington how they were interpreting the outcome, they pointed to a handful of reasons why they weren’t too concerned about public sentiment around decarbonization.
First, the vote was incredibly close, with just over 51% of voters checking “yes.” Second, another initiative Let’s Go Washington put on the ballot — 2117, which would have repealed the state’s big umbrella climate law that puts a declining cap on emissions — unambiguously failed, with 62% voting “no.” Third, they argue the split reflects confusion about what 2066 would do.
The “yes on 2066” campaign sold it as a measure to “protect energy choice” and “stop the gas ban,” warning that otherwise utility rates would increase and the state would force homeowners to pay tens of thousands of dollars to retrofit their homes. There are kernels of truth to the messaging — the state’s building codes seriously limit developers’ ability to put gas hookups in new construction without outright banning them. The new law affecting Puget Sound Energy is primarily a planning policy that requires the utility to consider alternatives to gas infrastructure, but it doesn’t force anyone to get off gas, and regulators are likely to approve only those alternatives that save ratepayers money.
“I think voters were responding to a lot of misinformation and fear-mongering,” said Leah Missik, the Washington deputy policy director for Climate Solutions, a regional nonprofit that helped spearhead the “no on 2066” campaign. She emphasized that it was put on the ballot in July, giving groups like hers only a few months to drum up their response to it, whereas they knew about 2117 for over a year, and thus had a lot more time to educate voters on what that initiative would do.
The confusion probably also wasn’t helped by the fact that the policies 2066 repealed were incredibly wonky, dealing with building codes and utility planning.
“I think that given all of those headwinds, the fact that about half of Washingtonians still voted against initiative 2066 is a testament to how popular climate action is in the state,” Emily Moore, the director of the climate and energy program at the Sightline Institute, a Seattle-based think tank, told me.
Sightline didn’t campaign for or against the measure, but Moore had some takeaways from the vote. She said environmental groups spent a lot of their energy countering the narrative that there was a gas ban, which may have inadvertently reinforced the idea. One lesson for the future might be to put more emphasis on the benefits of electrification, like the fact that heat pumps provide both heating and cooling and half of the state doesn’t currently have air conditioning. The other anti-climate measure, 2117, may have failed so decisively because Washington’s emission cap policy has raised more then $2 billion in funding for projects that people are already seeing the benefits of, like free transit passes.
“Likely a no vote on that one felt like getting to keep good things,” she told me. “I think we have more to do to show that getting off of gas means getting good things too.”
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Current conditions: In the Atlantic, the tropical storm that could, as it develops, take the name Jerry is making its way westward toward the U.S. • In the Pacific, Hurricane Priscilla strengthened into a Category 2 storm en route to Arizona and the Southwest • China broke an October temperature record with thermometers surging near 104 degrees Fahrenheit in the southeastern province of Fujian.
The Department of Energy appears poised to revoke awards to two major Direct Air Capture Hubs funded by the Infrastructure Investment and Jobs Act in Louisiana and Texas, Heatmap’s Emily Pontecorvo reported Tuesday. She got her hands on an internal agency project list that designated nearly $24 billion worth of grants as “terminated,” including Occidental Petroleum’s South Texas DAC Hub and Louisiana's Project Cypress, a joint venture between the DAC startups Heirloom and Climeworks. An Energy Department spokesperson told Emily that he was “unable to verify” the list of canceled grants and said that “no further determinations have been made at this time other than those previously announced,”referring to the canceled grants the department announced last week. Christoph Gebald, the CEO of Climeworks, acknowledged “market rumors” in an email, but said that the company is “prepared for all scenarios.” Heirloom’s head of policy, Vikrum Aiyer, said the company wasn’t aware of any decision the Energy Department had yet made.
While the list floated last week showed the Trump administration’s plans to cancel the two regional hydrogen hubs on the West Coast, the new list indicated that the Energy Department planned to rescind grants for all seven hubs, Emily reported. “If the program is dismantled, it could undermine the development of the domestic hydrogen industry,” Rachel Starr, the senior U.S. policy manager for hydrogen and transportation at Clean Air Task Force told her. “The U.S. will risk its leadership position on the global stage, both in terms of exporting a variety of transportation fuels that rely on hydrogen as a feedstock and in terms of technological development as other countries continue to fund and make progress on a variety of hydrogen production pathways and end uses.”
Remember the Tesla announcement I teased in yesterday’s newsletter? The predictions proved half right: The electric automaker did, indeed, release a cheaper version of its midsize SUV, the Model Y, with a starting price just $10 shy of $40,000. Rather than a new Roadster or potential vacuum cleaner, as the cryptic videos the company posted on CEO Elon Musk’s social media site hinted, the second announcement was a cheaper version of the Model 3, already the lower-end sedan offering. Starting at $36,990, InsideEVs called it “one of the most affordable cars Tesla has ever sold, and the cheapest in 2025.” But it’s still a far cry from Musk’s erstwhile promise to roll out a Tesla for less than $30,000.
That may be part of why the company is losing market share. As Heatmap’s Matthew Zeitlin reported, Tesla’s slice of the U.S. electric vehicle sales sank to its lowest-ever level in August despite Americans’ record scramble to use the federal tax credits before the September 30 deadline President Donald Trump’s new tax law set. General Motors, which sold more electric vehicles in the third quarter of this year than in all of 2024, offers the cheapest battery-powered passenger vehicle on the market today, the Chevrolet Equinox, which starts at $35,100.
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Trump’s pledge to revive the United States’ declining coal industry was always a gamble — even though, as Matthew reported in July, global coal demand is rising. Three separate stories published Tuesday show just how stacked the odds are against a major resurgence:
As you may recall from two consecutive newsletters last month, Secretary of Energy Chris Wright said “permitting reform” was “the biggest remaining thing” in the administration’s agenda. Yet Republican leaders in Congress expressed skepticism about tacking energy policy into the next reconciliation bill. This week, however, Utah Senator Mike Lee, the chairman of the Senate Committee on Energy and Natural Resources, called for a legislative overhaul of the National Environmental Policy Act. On Monday, the pro-development social media account Yimbyland — short for Yes In My Back Yard — posted on X: “Reminder that we built the Golden Gate Bridge in 4.5 years. Today, we wouldn’t even be able to finish the environmental review in 4.5 years.” In response, Lee said: “It’s time for NEPA reform. And permitting reform more broadly.”
Last month, a bipartisan permitting reform bill got a hearing in the House of Representatives. But that was before the government shutdown. And sources familiar with Democrats’ thinking have in recent months suggested to me that the administration’s gutting of so many clean energy policies has left Republicans with little to bargain with ahead of next year’s midterm elections.
Soon-to-be Japanese prime minister Sanae Takaichi.Yuichi Yamazaki - Pool/Getty Images
On Saturday, Japan’s long-ruling Liberal Democratic Party elected its former economic minister, Sanae Takaichi, as its new leader, putting her one step away from becoming the country’s first woman prime minister. Under previous administrations, Japan was already on track to restart the reactors idled after the 2011 Fukushima disaster. But Takaichi, a hardline conservative and nationalist who also vowed to re-militarize the nation, has pushed to speed up deployment of new reactors and technologies such as fusion in hopes of making the country 100% self-sufficient on energy.
“She wants energy security over climate ambition, nuclear over renewables, and national industry over global corporations,” Mika Ohbayashi, director at the pro-clean-energy Renewable Energy Institute, told Bloomberg. Shares of nuclear reactor operators surged by nearly 7% on Monday on the Tokyo Stock Exchange, while renewable energy developers’ stock prices dropped by as much as 15%
Researchers at the United Arab Emirates’ University of Sharjah just outlined a new method to transform spent coffee grounds and a commonly used type of plastic used in packaging into a form of activated carbon that can be used for chemical engineering, food processing, and water and air treatments. By repurposing the waste, it avoids carbon emitting from landfills into the atmosphere and reduces the need for new sources of carbon for industrial processes. “What begins with a Starbucks coffee cup and a discarded plastic water bottle can become a powerful tool in the fight against climate change through the production of activated carbon,” Dr. Haif Aljomard, lead inventor of the newly patented technology, said in a press release.
Last week’s Energy Department grant cancellations included funding for a backup energy system at Valley Children’s Hospital in Madera, California
When the Department of Energy canceled more than 321 grants in an act of apparent retribution against Democrats over the government shutdown, Russ Vought, President Trump’s budget czar, declared that the money represented “Green New Scam funding to fuel the Left's climate agenda.”
At least one of the grants zeroed out last week, however, was supposed to help keep the lights on at a children’s hospital.
The $29 million grant was intended to build a 3.3-megawatt long-duration energy storage system at Valley Children’s Hospital, a large pediatric hospital in Madera, California. The system would “power critical hospital operations during outage events,” such as when the California grid shuts down to avoid starting wildfires, according to project documents.
“The U.S. Department of Energy’s cancellation of funding for [the] long-duration energy storage demonstration grant is disappointing,” Zara Arboleda, a spokesperson for the hospital, told me.
Valley Children’s Hospital is a 358-bed hospital that says it serves more than 1.3 million children across California’s Central Valley. It has 116 neonatal intensive care unit beds and nationally ranked specialties in pediatric neurology, orthopedics, and lung surgery, among others.
Energy Secretary Chris Wright has characterized the more than $7.5 billion in grants canceled last week as part of an ongoing review of financial awards made by the Biden administration. But the timing of the cancellations — and Vought’s gleeful tweets about them — suggests a more vindictive purpose. Republican lawmakers and President Trump himself threatened to unleash Vought as a kind of rogue budget cutter before the federal government shut down last week.
“We don’t control what he’s going to do,” Senator John Thune told Politico last week. “I have a meeting today with Russ Vought, he of PROJECT 2025 Fame, to determine which of the many Democrat Agencies, most of which are a political SCAM, he recommends to be cut,” Trump posted on the same day.
Up until this year, canceling funding that is already under contract with a private party would have been thought to be straightforwardly illegal under federal law. But the Supreme Court’s conservative majority has allowed the Trump administration to act with previously unimaginable freedom while it considers ruling on similar cases.
Faraday Microgrids, the contractor that was due to receive the funding, is already building a microgrid for the hospital. The proposed backup power system — which the grant stipulated should be “non-lithium-ion” — was supposed to be funded by the Energy Department’s Office of Clean Energy Demonstrations, with the goal of finding new ways of storing electricity without using lithium-ion batteries, and was meant to work in concert with that new microgrid and snap on in times of high stress.
That microgrid project is still moving forward, Arboleda, the hospital’s spokesperson, told me. “Valley Children’s Hospital continues to build and soon will operate its microgrid announced in 2023 to ensure our facilities have access to reliable and sustainable energy every minute of every day for our patients and our care providers,” she added. That grid will contain some storage, but not the long-term storage system discussed in the official plan.
Faraday Microgrids, formerly known as Charge Bliss, didn’t respond to a request for comment, but its website touts its ability to secure grants and other government funding for energy projects.
In a statement, a spokesman for the Energy Department said that the grant was canceled because the project wasn’t feasible. “Following an in-depth review of the financial award, it was determined, among other reasons, that the viability of the project was not adequate to warrant further disbursements,” Ben Dietderich, a spokesman for the Energy Department, told me.
The children’s hospital, at least, is in good company. On Tuesday, a Trump administration document obtained by Heatmap News suggested the Energy Department is moving to kill bipartisan-backed funding for two direct air capture hubs in Texas and Louisiana. And although California has lost the most grants of any state, the Energy Department has also sought to terminate funding for new factories and industrial facilities across Republican-governed states.
Editor’s note: This story initially misstated the number of neonatal intensive care unit beds at Valley Children’s Hospital. It has been corrected.
Rob and Jesse break down China’s electricity generation with UC San Diego’s Michael Davidson.
China announced a new climate commitment under the Paris Agreement at last month’s United Nations General Assembly meeting, pledging to cut its emissions by 7% to 10% by 2035. Many observers were disappointed by the promise, which may not go far enough to forestall 2 degrees Celsius of warming. But the pledge’s conservatism reveals the delicate and shifting politics of China’s grid — and how the country’s central government and its provinces fight over keeping the lights on.
On this week’s episode of Shift Key, Rob and Jesse talk to Michael Davidson, an expert on Chinese electricity and climate policy. He is a professor at the University of California, San Diego, where he holds a joint faculty appointment at the School of Global Policy and Strategy and the Jacobs School of Engineering. He is also a senior associate at the Center for Strategic and International Studies, and he was previously the U.S.-China policy coordinator for the Natural Resources Defense Council.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
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Here is an excerpt from our conversation:
Robinson Meyer: Your research and other people’s research has revealed that basically, when China started making capacity payments to coal plants, in some cases, it didn’t have the effect on the bottom line of these plants that was hoped for, and also we didn’t really see coal generation go down or change in the year that it happened. It wasn’t like they were paying these plants to stick around and not run. They were basically paying these plants, it seems like, to do the exact same thing they did the year before, but now they also got paid. And maybe that was needed for their economics, we can talk about it.
Why did coal get those payments and not, say, batteries or other sources of spare capacity, like pumped hydro storage, like nuclear? Why did coal, specifically, get payments for capacity? And does it have to do with spinning reserve? Or does it have to do with the political economy of coal in China?
Michael Davidson: When it came out, we said exactly the same thing. We said, okay, this should be a technology neutral payment scheme, and it should be a market, not a payment, right? But China’s building these things up little by little. Over time we’ve seen, historically, actually, a number of systems internationally started with payments before they move to markets because they realize that you could get a lot more competitive pressure with markets.
The capacity payment scheme for coal is extremely simple, right? It says, okay, for each province, we’re going to say what percentage of our benchmark coal investment costs are we going to subsidize. It’s extremely simple. It does not account for how much you’re using it at a plant by plant level. It does not account for other factors, renewables, etc. It’s a very coarse metric. But I wouldn’t say that it had had some, you know, perverse negative effect on the outcome of what coal generation is. Probably more likely is that these payments were seen, for some, as extra support. But then for some that are really hurting, they’re saying, okay, well then we will maybe put up less obstacles to market reforms.
But then on top of that, you have to put in the hourly energy demand growth story and say, okay, well you have all these renewables, but you don’t have enough storage to shift to evening peaks. You are going to rely on coal to meet that given the current rigid dispatch system. And so you’re dispatching them kind of regardless of whether or not you have the payment schemes.
I will say that I was a skeptic, right? Because when people told me that China should put in place a capacity market, I said, China has overcapacity. So if you have an overcapacity situation, you put in place a market, the prices should be zero. So what’s the point? But actually, when you’re looking out ahead with all of this surplus coal capacity that you’re trying to push down, you’re trying to push those capacity factors of those coal plans from 50%, 60%, down to 20% or even lower, they need to have other revenue schemes if you’re not going to dramatically open up your spot markets, which China is very hesitant to do — very risk averse when it comes to the openness of spot markets, in terms of price gaps. So that’s a necessary part of this transition. But it can be done more efficiently, and it should done technology neutral.
And by the way that is happening in certain places. That’s a national scheme, but we actually see that the implementation — for example, Shaanxi province, we have a technology neutral scheme that would include other resources, not just coal.
Mentioned:
China’s new pledge to cut its emissions by 2035
What an ‘ambitious’ 2035 electricity target looks like for China
China’s Clean Energy Pledge is Clouded by Coal, The Wire China
Jesse’s upshift; Rob’s upshift.
This episode of Shift Key is sponsored by …
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A warmer world is here. Now what? Listen to Shocked, from the University of Chicago’s Institute for Climate and Sustainable Growth, and hear journalist Amy Harder and economist Michael Greenstone share new ways of thinking about climate change and cutting-edge solutions. Find it here.
Music for Shift Key is by Adam Kromelow.