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In a word: chaos.
A moment of profound uncertainty for many of America’s environmental laws has just become even more uncertain-er. This week, as President-elect Donald Trump considers how to revise or repeal the country’s bedrock climate laws, one of the country’s oldest environmental laws has been thrown into jeopardy.
A three-judge panel on the D.C. Circuit Court of Appeals ruled earlier this week that key rules governing the National Environmental Policy Act, which requires the federal government to study the environmental impact of its actions, do not carry the force of law. The ruling might — might — lay the groundwork for a massive revolution in the country’s environmental permitting regime. But for the time being, they guarantee a lot of chaos.
Whenever the federal government wants to build a new piece of infrastructure — and to some degree, whenever it wants to do anything significant — it has to go through NEPA. That sounds great in theory, but NEPA studies — which were originally meant to be just a few pages long — have now swelled in length, running into the thousands of pages and taking years to complete. They have become the subject of criticism from conservatives and some liberals.
That’s because NEPA doesn’t actually require the government to take the most environmentally friendly action. It only mandates that the government study the alternatives and arrive at a decision. Many critics, including progressives, now argue that NEPA has become a great bulwark of the status quo — a way for wealthy NIMBYs to slow down and block virtually any project they don’t like, including the large-scale solar, wind, and transmission projects necessary for the energy transition.
Other progressives argue that NEPA still serves a purpose — that it’s the only way environmental groups can provide a check on factory farms, new federal construction projects, or other big pieces of infrastructure. They say Congress should reform NEPA by affirmatively expanding parts of the permitting regime, adding new requirements to the process. The NEPA process is so time-consuming today not because it has become unwieldy, they say, but because the federal government does not employ enough civil servants to conduct the required studies on time. (NEPA’s critics reply to this, in essence: Sure, but why does NEPA require all those studies in the first place?)
At the heart of the case is a small federal agency called the Council on Environmental Quality. Since its creation in 1970, the Council on Environmental Quality has issued guidelines about how federal agencies should comply with NEPA. These rules have been treated as legally binding — that is, quasi-law on the same tier as federal regulation — since at least 1977.
In the ensuing decades, presidents from both parties have acted under the impression that the Council on Environmental Quality’s NEPA rules are binding. That’s why the first Trump administration went through the hassle of rewriting the council’s rules, subjecting them to the same notice-and-comment process other federal regulations must go through before they can be changed. The Biden administration later replaced the Trump administration’s rules with its own version.
But that actually isn’t the case, the judges ruled. The Council on Environmental Quality was never allowed to issue binding regulations about NEPA in the first place, they decided.
The Council on Environmental Quality can issue guidelines about how agencies should follow NEPA, the judges said. But these will have the same legal authority as executive orders, which can guide agency decisionmaking but provide no outside legal recourse. Executive orders are sort of like internal corporate policies for the government: They’re supposed to be followed by employees, but nobody can appeal to a court that a company got them wrong. What the council cannot do, the court said, is issue rules, quasi-laws that outside groups can appeal to and claim aren’t being obeyed in court.
If upheld, the ruling would throw virtually the entire body of law around NEPA into question — hundreds of cases, thousands of pages of rules, and hundreds of thousands of analyses all premised on the idea that the Center on Environmental Quality is the final NEPA arbiter. It could also vastly weaken NEPA, allowing the government to build projects quickly while giving Americans and nonprofit groups little recourse to stop them.
“It’s a very big deal,” James Coleman, an energy law professor at the University of Minnesota, told me. “NEPA by itself is a very limited piece of text. When it was adopted, no one imagined that it would lead to this comprehensive permitting system where it would take five years to get a permit.”
Over time, court cases and White House regulations have turned NEPA into the juggernaut that it is today. But now that’s exactly what is up in the air — potentially. “If a judge thinks that the decades of cases we’ve had are misconceived, then they don’t have to follow it any more,” Coleman said.
What’s odd about the case is that neither side intended to get this ruling in the first place. Neither the Federal Aviation Administration nor the Marin Audubon Society, a San Francisco-area birding group, set out to strike down the entire body of NEPA regulations. The FAA had relied on the Council on Environmental Quality’s rules when it approved a plan for tourism flights over national parks, saying that the regulations didn’t require it to conduct a NEPA study. The Marin Audubon Society argued that the air tours didn’t fall under an exemption created by the rules.
Two Republican-appointed judges on the panel then essentially took the case into their own hands, using the dispute as an opportunity to throw modern NEPA procedure into question. In fact, they said, the Council on Environmental Quality never had the authority to issue rules in the first place — so the claimed exemption didn’t matter. (Judge Sri Srinivasan, who dissented from part of the ruling, criticized the judges for opening such big legal questions when they didn’t need to do so.)
The outcome doesn’t mean that the federal government will immediately move faster to approve infrastructure projects — in some cases, it might move slower. As part of its rules, the Council on Environmental Quality has approved a list of “categorical exclusions,” federal actions that do not require a NEPA review. These can include activities like holding a small meeting or taking out a federal farm loan. The judges have now rejected the council’s ability to create categorical exclusions altogether, meaning that many more federal actions may — at least at first — be subject to NEPA oversight. (Congress has also told agencies to create some categorical exclusions — including for oil and gas drilling — and those are not affected by the case.)
For that reason, some environmental lawyers are doubtful that the argument will change NEPA in the way its opponents hope. “What the ruling does is deeply complicate things for both sides,” Sam Sankhar, the senior vice president at Earthjustice, an environmental legal group, told me. “The NEPA regulations are a body of law that has developed over years to guide the way that people do the NEPA process. The absence of those regulations does not mean the absence of NEPA — it means the absence of any guidelines about how to implement NEPA in the future.”
If the NEPA regulations get tossed out, he said, then it will “really be up to each individual judge to wing it” when interpreting the law, he added.
Nicholas Bagley, a University of Michigan law professor who has written critically about NEPA and other liberal laws that focus on procedure, tends to agree with that view. “When you go to court, agencies and challengers both would look at these regulations as a sword or a shield,” he said. Challengers used the White House rules as a weapon, asserting that the government needed to look at some question but failed to do so. But the federal government used those same rules “as a shield,” he said, showing that it faithfully followed the rules, and therefore that judges didn’t need to get involved.
If the rules are gone, then each side has lost a tool — and judges will have much more power. That means federal agencies, which are hesitant to run afoul of the courts, may now become even more timid in their decision-making, Bagley said. What’s more, the White House’s regulations would still act as executive orders, binding agency action. “They just won’t be enforceable in court,” he said. (The Trump administration could also respond by chucking out the White House regulations altogether, he said.)
It’s unclear what happens next. If the FAA appeals, the D.C. Circuit could choose to hear the case again en banc, meaning the full panel of judges — a majority of whom were appointed by Democrats — would consider the questions. But eventually a higher court may weigh in. “I would not be surprised at all to find this eventually find its way to the Supreme Court,” Coleman told me. In the past, the Supreme Court has ruled that the Council on Environmental Quality’s regulations carry the force of law. But the new, arch-conservative court — and the incoming Trump administration — might push for a different approach.
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Rob does a post-vacation debrief with Jesse and Heatmap deputy editor Jillian Goodman on the One Big Beautiful Bill.
It’s official. On July 4, President Trump signed the Republican reconciliation bill into law, gutting many of the country’s most significant clean energy tax credits. The future of the American solar, wind, battery, and electric vehicle industries looks very different now than it did last year.
On this week’s episode of Shift Key, we survey the damage and look for bright spots. What did the law, in its final version, actually repeal, and what did it leave intact? How much could still change as the Trump administration implements the law? What does this mean for U.S. economic competitiveness? And how are we feeling about the climate fight today?
Jillian Goodman, Heatmap’s deputy editor, joins us to discuss all these questions and more. Shift Key is hosted by Jesse Jenkins, a professor of energy systems engineering at Princeton University, and Robinson Meyer, Heatmap’s executive editor.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, YouTube, or wherever you get your podcasts.
You can also add the show’s RSS feed to your podcast app to follow us directly.
Here is an excerpt from our conversation:
Robinson Meyer: I want to ask a version of the Upshift / Downshift question of both of you, which is, how are you feeling?
Jillian Goodman: Dizzy. I’m feeling dizzy.
Jesse Jenkins: I would like a break. Yes.
Meyer: You both had your faces up against the coalface of this policy change over the past two weeks. And I’m not someone who thinks how we feel about climate change is always the most salient question. At some point of working on it professionally, I think one just kind of is like, well, this is the thing I work on, and I get up in the morning and I try to make it better, and it doesn’t really matter whether I’m optimistic or pessimistic at the moment because you just keep pushing. That’s how it works.
Jenkins: I think it’s how you survive in this game this long, is adopting an attitude like that to some degree.
Meyer: The U.S. just went through a kind of clattering change to its energy and climate policy and got rid of a number of policies that, although flawed, were pushing the U.S. energy system in the right direction, and were a real vote of confidence and of good faith in the energy transition. Has watching the events of the past two weeks made you feel pessimistic about the energy transition to come? Or are you feeling like, you know, for a world where Trump won, for a world where the U.S. faced the constraints and the political environment that it did in 2023 and 2024 and 2025, we can work with this and there’s gonna be new stuff coming down the pipeline and we’re gonna keep deploying.
Goodman: I will say, kind of similar to you, Rob, doing this work is sort of my way of processing my climate anxiety, or at least putting some kind of wall of professionalism between that climate anxiety and my daily life. Like, this is my contribution, and I think about it as a professional, and I don’t really think about it as a human as often.
I will say, it’s shocking to me how much of a … you know, it is not a 100% policy reversal, but the extent to which the government of the United States was willing to throw out its existing climate policy that took however many years and decades to get to just really kind of floors me. And it’s the kind of thing that we can’t do again, at least not in this way. It’s not that U.S. companies will never again trust a climate-oriented tax credit. I think that’s a bit of an overstatement. But this approach has been tried, and then it’s been undone. And so whatever approach is tried in the future will have to be something new, and it’ll have to be motivated by different arguments, and it will have to have different structures. And that project, I think, is also kind of daunting.
Jenkins: Yeah, so look, this is a terrible piece of policy for the United States, and for the world. And so on the one hand, I’m mad as hell about it, right? I mean, we haven’t even talked about the broader effects beyond climate of this bill. It’s going to kick nearly one in 20 Americans off of their health insurance. It’s going to explode the deficit so that we can mostly give tax cuts to wealthy people and corporations who don’t need it. It’s going to reduce food stamp spending for people who can’t afford to eat so that people who can afford first class flights can have another vacation. Like, this is just bad policy, and it is a bad way to do energy policy, to completely reverse course just because the other guy won the election, rather than to have a more thoughtful rationalization of the tax code for energy investment.
I think it’s particularly scary to think about the implications for our automotive sector, having basically replaced a pretty thoughtful and fairly successful domestic industrial strategy around EVs and batteries with basically nothing except for some subsidies that build a wall around the United States is really concerning.I don’t know that we’re gonna have a globally relevant auto industry in five years …
Mentioned:
The REPEAT Project report on what the OBBBA will mean for the future of American emissions
The Bipartisan Policy Center’s foreign entities of concern explainer
The new White House executive order about renewables tax credits
And here’s more of Heatmap’s coverage from the endgame of OBBBA.
This episode of Shift Key is sponsored by …
The Yale Center for Business and the Environment’s online clean energy programs equip you with tangible skills and powerful networks—and you can continue working while learning. In just five hours a week, propel your career and make a difference.
Music for Shift Key is by Adam Kromelow.
When Congress rescinded unobligated funds from the historic climate law, it inadvertently answered a question climate advocates have been asking for months.
The Biden administration left office without ever disclosing how much of the historic climate funding from the Inflation Reduction Act it had spent.
Politico reached out to every federal agency in November in an attempt to answer that question and could only conclude that it was a “big mystery.” The administration had announced awards for about 67% of the $145.4 billion in grants created by the IRA, the outlet found, but the amount that had been obligated — meaning legally committed and therefore, at least in theory, protected — remained largely unknown.
That continued to be true right up until the legislative process for Trump’s One Big Beautiful Bill. In addition to overhauling the IRA’s clean energy tax credits, Republicans in Congress rescinded the unobligated funds from 47 of the law’s more than 80 climate and environmental programs. According to scores from the Congressional Budget Office, $31.7 billion of the $93.4 billion for those programs, or about 34%, was left.
That means the Biden administration spent or contracted out about two-thirds of the funding from these programs. The data puts into focus what the ultimate effects and outcomes of the Inflation Reduction Act will be over the coming decades — or rather, what they could be, if the Trump administration upholds existing contracts. Whether the administration must honor these agreements is the subject of several ongoing lawsuits.
But we can see, for example, that the Environmental Protection Agency, which had the largest appropriation from the IRA of any agency, obligated the vast majority of that money to states, tribes, nonprofits, and other beneficiaries. Billions of dollars to monitor and address air pollution in low-income communities and at schools, to phase down planet-warming refrigerants and transition to next-generation technologies, and to help states build out and implement their climate action plans should theoretically be flowing into the economy, so long as the contracts are ultimately honored. The entirety of the $27 billion Greenhouse Gas Reduction Fund was obligated, and while the EPA has attempted to claw back roughly $20 billion of that — a process that has been held up in the courts — the $7 billion set aside for a low-income solar program called Solar For All is actively funding new projects around the country.
The agency under Biden was less successful in standing up a series of programs designed to advance greenhouse gas emissions reporting. Initiatives to improve the labeling systems for low-carbon construction materials and to standardize corporate emissions reporting never really got off the ground.
The Department of Agriculture was also an efficient spender. While the data shows it had obligated only about $7 billion of the more than $18 billion allocated for climate-focused conservation programs, only $10 billion of the funding was actually available for the department to use by the time Biden left office. On the one hand, that means it awarded 70% of the available funds. On the other, that means Congress has now evaporated a whopping $11 billion that could have been disbursed.
The Forest Service, which is under the USDA, also deployed more than $2 billion, or about 93% of its funding for National Forest restoration, urban forestry, and climate mitigation grants for private forest owners.
There are limitations to the data. It shows that the Department of Energy only spent about 39% of its funding, but because the Budget Office did not break out the rescissions by program, we can’t see how far along the agency got with each one, or how much of each was clawed back. The data can also be somewhat misleading, as several of the programs provide loans and loan guarantees, while the OBBB only rescinded “credit subsidies,” i.e. money to cover the costs of this lending service. In other words, this doesn’t tell us much about how much Biden’s Loan Programs Office accomplished. But in this case the office’s website helps fill out the picture: It lists 23 active loans that were made after the IRA passed, worth nearly $58 billion. (The IRA appropriated about $11.7 billion in credit subsidies to the Loan Programs Office.)
I also put together a list of programs that Congress did not rescind, as they show which IRA creations the GOP either deemed worthwhile or too depleted, a.k.a. obligated, to be worth the effort. Several big-ticket items jump out. As I’ve previously written, two rebate programs for home efficiency improvements remain intact, although most of the $8.8 billion in funding is currently paused. Drought mitigation, water access, and tribal electrification and climate resilience grants were also untouched. A $3 billion EPA program to reduce air pollution at ports made it through the gambit after an initial House draft of the OBBB had proposed killing it.
Republicans in Congress also preserved a nearly $10 billion program to help rural electric cooperatives invest in clean energy and energy efficiency. Rural coops disproportionately rely on coal-fired power plants, burdening their members with higher energy prices and dirtier air. While the National Rural Electric Cooperative Association is a major advocate for coal power and has applauded Trump’s moves to boost it, the group also championed the rural clean energy program, with its CEO telling E&E News last fall that the program was oversubscribed and that “there is an appetite for investing in clean energy.”
To be sure, the question of whether and to what extent the Trump administration will disburse previously obligated funds or continue to spend down the remaining programs is a big one. But the supposition that the OBBB “killed” the IRA is also not really accurate. Between obligated funds and the programs that weren’t rescinded, more than $105 billion could still flow into the economy to fight climate change.
Unlike just about every other car sales event, this one has a real — congressionally mandated — end date.
Car salespeople, like all salespeople, love to project a sense of urgency. You know the familiar seasonal rhythm of the TV commercial: Toyotathon is on now — but hurry in, because these deals won’t last. The end of the discount is, of course, an arbitrary deadline invented to juice that month’s sales figures; there’ll be another sale soon.
But in the electric vehicle market there’s about to be a fire sale, and this time it really is a race against the clock.
Federal incentives for EVs and EV equipment were critically endangered the moment Donald Trump won the 2024 presidential election. Now, with the passage of the omnibus budget reconciliation bill on the Fourth of July, they have a hard expiration date. Most importantly, the $7,500 federal tax credit for an EV purchase is dead after September 30. Drivers who might want to go electric and dealerships and car companies eager to unload EVs are suddenly in a furor to get deals done before the calendar turns to October.
The impending end of the tax credit has already become a sales pitch. Tesla, faced with sagging sales numbers thanks in part to Elon Musk’s misadventures in the Trump administration, has been sending a steady slog of emails trying to convince me to replace my just-paid-off Model 3 with another one. The brand didn’t take long to turn the impending EV gloom into a short-term sales opportunity. “Order soon to get your $7,500,” declared an email blast sent just days after Trump signed the bill.
On Reddit, the general manager of a Mississippi dealership posted to the community devoted to the Ioniq 9, Hyundai’s new three-row all-electric SUV, to appeal to anyone who might be interested in one of the three models that just appeared on their lot. It’s an unusual strategy, a local dealer seeking out a nationwide group of enthusiasts just to move a trio of vehicles. But it’s not hard to see the economic writing on the wall.
The Ioniq 9 is a cool and capable vehicle, but one that starts at $59,000 in its most basic form and quickly rises into the $60,000s and $70,000s with fancier versions. Even with the discount, the Ioniq 9 costs far more than many of the more affordable gas-powered three-row crossovers. And now the vehicle has come down with a serious case of unlucky timing, with deliveries beginning this summer just ahead of the incentive’s disappearance. As of October 1, the EV could become an albatross that nobody in suburban Memphis wants to drive off the lot.
Over the past year, Ford has offered the Ford Power Promise, an excellent deal that throws in a free home charger plus the cost of installation to anyone who buys a new EV. That deal was supposed to expire this summer. But the Detroit giant has extended its offer until — surprise — Sept. 30, in the hopes of enticing a wave of buyers while the getting is good.
This isn’t the first time EV-makers have been through such a deadline crunch. When the $7,500 federal tax credit for EV purchases first started in 2010, the law was written so that the benefit phased out over time once a car company passed a particular sales threshold. By the time I bought my EV in the spring of 2019, for example, Tesla had already sold so many vehicles that its tax credit was halved from $7,500 to $3,750. We had to rush to take delivery in the last few days of June as the benefit was slated to fall again, to $1,875, on July 1, before it disappeared completely in 2020.
The Inflation Reduction Act passed under President Biden not only reinstated the $7,500 credit but also took away the gradual decline of the benefit; it was supposed to stick around, in full, until 2032. But despite Trump’s on-again, off-again bromance with Elon Musk, the president followed through on his long-term antagonistic rhetoric against EVs by repealing the benefit as part of this month’s disastrous big bill.
Trump, despite his best efforts, won’t kill the EV. The electric horse has simply left the barn — the world has come too far and seen too much of what electrification has to offer to turn back just because the current U.S. president wants it to. But the end of the EV tax credit (until a different regime comes into power, at least) seriously imperils the economic math that allowed EV sales to rise steadily over the past few years.
As a result, now might be the best time for a long time to buy or lease an electric vehicle, with remarkably low lease payments to be found on great EVs like the Hyundai Ioniq 5 and Chevy Equinox. Once the tax breaks are gone, lease deals (which got lots of drivers into EVs without them having to worry about long-term ownership questions) are likely to grow less enticing. EVs that would have been cost-competitive with gasoline counterparts when the tax credits taken into account suddenly aren’t.
Plenty of drivers will continue to choose electric even at a premium price because it’s a better product, sure. But hopes of reaching many more budget-first buyers have taken a serious hit. It could be a dream summer to buy an EV, but we’re all going to wake up when September ends.