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“That’s going to cause confusion.”
It’s been nearly two years since the Inflation Reduction Act passed, and two of its programs designed to encourage home electrification and energy efficiency — worth a combined $8.8 billion — are still not operational.
The delay has already caused consternation among homeowners who can’t understand why they still don’t know when the rebates will be available or what they will cover. Now it’s becoming apparent that these programs could look quite different state by state.
This is, to some extent, by design. The rebates will be distributed by state governments, who must first apply to the Department of Energy for their share of the funding. Most states are still in the process of putting together their applications. The law laid out some rules for how these programs would work, e.g. which kinds of appliances and upgrades the rebates will subsidize and the maximum subsidy per appliance and per household. It also put restrictions on who could benefit from the programs, with most of the money earmarked for low- and moderate-income households. But it left plenty of flexibility for states to tailor the programs to their own needs.
That’s mostly a good thing. Many states already offer robust electrification and efficiency rebates, but their existing programs have major shortcomings. Apartment buildings, in particular, have been hard to reach — both because landlords have little incentive to make upgrades and because it’s much more complicated to retrofit a big apartment building than a single-family home. The IRA rebates create an opportunity to try and fill these kinds of gaps.
But the result is also, frankly, messy. The money is taking a long time to get out the door, and when it does the programs are going to be convoluted and challenging to communicate to consumers.This could turn out to be a missed opportunity for Biden. When the polling nonprofit Data for Progress asks voters about their greatest concerns relating to climate, they point to energy costs, pollution, and extreme weather. The IRA rebates are an opportunity to address these concerns, and 71% of voters support the programs — including majorities across party lines — according to the group’s surveys.
“Nobody would say that this rollout has been as fast as they would have wanted,” Sage Briscoe, the federal policy director for Rewiring America, told me. “But I’m hopeful that it's going to be really impactful, and at the end of the day, that’s the main thing.”
Information on how states are thinking about distributing the money is scarce. Some did extensive stakeholder engagement prior to submitting their applications and made their proposed plans public, while others are saving that process until after they apply. I combed through as much publicly available information as I could find and discovered a number of ways in which these rebate programs could diverge. The programs may go by different names in different states. Moreover, a heat pump discount in Maine may not exist in Rhode Island, or a family that qualifies for funding in Wisconsin may not have qualified had they lived in New Jersey.
Here are some of the big themes.
The challenge in understanding these programs starts with their most basic feature. What are they called?
One of the programs will provide point-of-sale rebates on specific appliances and upgrades such as heat pumps, insulation, or a new electric panel. This was originally called the High-Efficiency Electric Home Rebate Act, or HEEHRA. Some states have continued to use that acronym. Others have adopted the name the Home Electrification and Appliance Rebates, or HEAR. (For the sake of brevity, I’ll use HEAR.)
The other program, which is a bit more complicated, provides rebates based on the amount of energy a home retrofit project saves. For example, if a homeowner implements a bunch of improvements that will reduce their energy consumption by at least 20%, they could get up to $4,000 back, while upgrades that result in a 35% reduction are eligible for up to $8,000. This was originally called the HOPE for HOMES Act, and many states simply refer to it as HOMES. Others prefer the title Home Efficiency Rebates, or HER. (To make things more confusing, the Department of Energy refers to its two programs together as the Home Energy Rebates and also uses the acronym HER. For the sake of clarity, I’ll refer to this one as HOMES.)
Meanwhile, some states are funneling the money into their own pre-existing rebate programs or creating new programs with new names. For example, New York — the only state to have received funding under the IRA rebate programs so far— will distribute at least some of the HEAR money through its Empower+ program, which already helps low- and moderate-income households save energy. The state will be able to expand the program’s offerings to include paying for electrical upgrades needed to install heat pumps or induction stoves. Vermont wants to allocate most of the HOMES funding to its Weatherization Assistance Program, which is an older, federally funded, state-implemented efficiency program for low-income households. New Jersey is considering putting most of the funding from both pots toward a new program called M-RISE.
Ultimately, this could mean that many people who apply for or receive these rebates will have no idea that they’re benefiting from Biden’s Inflation Reduction Act.
“That was baked in the cake the way the law was written,” Andy Frank, the founder of the home electrification company Sealed, told me. He said he thinks the bigger communication challenge will be when the first few states start launching their programs. Biden officials may take the opportunity to do a victory lap, inviting national press. People in other states may see the news and think they can get rebates too. “That’s going to cause confusion,” he said.
Briscoe acknowledged the branding challenge but said it was not the most important part of the legislation. “The most important thing is getting families the help that they need, and I think that’s rightfully where the emphasis has been,” she told me.
Congress included a long list of technologies that would be eligible for discounts under the HEAR program: Heat pump space heaters, heat pump water heaters, heat pump clothes dryers, electric stoves, electric panels, electric wiring, insulation, air sealing, and ventilation systems.
While it seems that most states plan to copy and paste the whole list into their plans, a few are narrowing it down. Maine, for example, has proposed offering rebates only for heat pumps, plus electric wiring and panel upgrades if needed. Its draft strategic plan from January says that the state has alternative funding streams to sustain its existing programs for water heaters and insulation, and that the other appliances, like stoves and clothes dryers, “have less impact on home energy costs and carbon emissions.”
Rhode Island, on the other hand, may not allocate any of the funding for heat pumps. The state conducted a “gap analysis” to identify which of the technologies have the least funding support under its existing programs and determined that stoves, clothes dryers, electric panels, and wiring were the best use of the HEAR funds. That doesn’t mean Rhode Islanders wouldn’t be able to get rebates for heat pumps — the state energy office offers incentives, as do all of its utilities. It just means they wouldn’t be able to get more funding on top of what’s already offered.
Wisconsin, which is further behind these Northeast states in promoting electrification, is opting to make all of the technologies eligible. Though narrowing the list would extend the budget for each one, state officials noted, it would also “preclude the state from accelerating market adoption for those upgrades.”
Congress restricted HEAR program funding to low-income households, defined as those making less than 80% of the area median income, and moderate-income households, or those making between 80% and 150% of the area median income. The HOMES program is not income-restricted, though states were instructed to offer higher rebates for low-income households.
There’s going to be a lot of variation between states regarding how much funding they dedicate to each income bracket. But there also may be some variation in the types of buildings that are eligible.
Maine has proposed dedicating 100% of the funding under the HOMES program and much of the funding under HEAR to multifamily buildings. For the HEAR program, it might also prioritize subsidizing heat pump retrofits in manufactured housing, formerly referred to as “mobile homes.” That means if you’re a single family homeowner in Maine, you probably won’t benefit from the program — although Maine already has extensive subsidies for single-family homes and has completed more than 100,000 heat pump retrofits since 2019.
“They're taking this funding to try and move beyond that section of housing and open up robust programs for areas where they still have really high need,” said Briscoe.
New Jersey has proposed a similar approach, dedicating 100% of HOMES funding and 85% of HEAR funding to multifamily buildings in low-income neighborhoods. The remaining 15% will go toward an existing state program called Comfort Partners that subsidizes energy efficiency measures to expand its offerings to heat pumps, electrical panels, wiring, and water heaters.
Sealed and Rewiring America are both working on tools to help consumers and contractors navigate all of this confusion. Frank told me Sealed was developing software for contractors that will help them determine customer eligibility and calculate total savings at the point of sale, and then process the rebate paperwork as quickly and easily as possible. Rewiring America is building what it intends to be a user-friendly calculator in which a homeowner will be able to enter their zip code and income and get information about all of the programs they are eligible for, including state, local, and utility-run offerings.
Or at least Californians are. Dozens have written to the California Energy Commission to ask when the rebates will be available, whether they will qualify, or to express their frustration with how long it’s taking to get the program up and running.
Consider the following comment submitted in April by Kristen Talley, a homeowner who wants to replace her gas furnace with an electric heat pump. “We’d hoped to do the project last fall … and we can’t proceed until the rebates are available,” she wrote. “Please establish criteria and make applications available NOW!!! It’s crazy that it's taken this long!”
Richard Pellin, a 77-year-old retiree who does not have enough income to qualify for the tax credits, wrote that he wants to install a new heat pump system so that he can have air conditioning. “We suffered badly last year from the summer heat … Waiting until the state programs are ready to issue rebates would cause us to suffer longer,” he said. He implored the commission to allow the rebates to be claimed retroactively, warning that otherwise there might be “a surge of activity when rebates are approved” that will tax supply chains and labor and cause further delays. (The Department of Energy has specified that the HEAR rebates cannot be claimed retroactively, but it may be possible for the HOMES rebates.)
Some of this frustration is misplaced. California submitted its application for the HEAR program in January and is waiting on the Department of Energy to approve it. In the meantime, it may even be possible that Talley and Pellin are eligible for existing California rebate programs, though discounts through those are significantly lower.
Another public comment from Richard Bailey had the subject line: “Time is of the essence.” Bailey warned that the rebates could be “canceled, denied, delayed, etc” if Trump was elected. “Much is at risk. Do not delay,” he wrote.
I asked Briscoe how much of a risk this was. She said it would require an act of Congress to cancel the programs — in other words, it’s not something Trump could do on day one. Even then, money that’s already been awarded to states cannot be clawed back. Fifteen states have already submitted their applications, and are expected to receive funding by the end of the year.
“Hopefully, we can get a lot of these applications in and processed before any new administration were to take over,” said Briscoe.
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On a new WMO report, FEMA, and Oak Flat
Current conditions: The first U.S. heat wave of the year begins today in the West, with a record high of 107 degrees Fahrenheit possible in Redding, California • India is experiencing its earliest monsoon in 16 years• Power was largely restored in southeast Texas by early Wednesday after destructive winds left nearly 200,000 without electricity.
The global average temperature is expected to “remain at or near” the 2-degree Celsius threshold within the next five years, the World Meteorological Organization shared in a new report Wednesday morning. The 2015 Paris Climate Agreement set a warming limit to under 2 degrees C above pre-industrial times, although the WMO’s prediction will not immediately mean the goal has been broken, since that threshold is measured over at least two decades, the Financial Times reports. Still, WMO’s report represents “the first time that scientists’ computer models had flagged the more imminent possibility of a 2C year,” FT writes. Other concerning findings include:
You can find the full report here.
The Federal Emergency Management Agency has been in disarray since its acting administrator was fired in early May for defending the agency before Congress. His successor, David Richardson, began his tenure by threatening staff. According to an internal FEMA memo obtained by The Handbasket, however, the picture is worse than mere dysfunction: Stephanie Dobitsch, the associate administrator for policy and program analysis, wrote to Richardson last week warning him that the agency’s “critical functions” are at “high risk” of failure due to “significant personnel losses in advance of the 2025 Hurricane Season.”
Of particular concern is the staffing at the Mount Weather Emergency Operations Center, which The Handbasket notes contains the nuclear bunker “where congressional leaders were stashed on 9/11,” and which, per Dobitsch, is now “at risk of not being fully mission capable.” FEMA’s primary disaster response office is also on the verge of being unable to “execute response and initial recovery operations and may disrupt life-saving and life-sustaining program delivery,” the memo goes on. Hurricane season begins on Sunday, and wildfires are already burning in the West. You can read the full report at The Handbasket.
The Supreme Court on Tuesday rejected a religious liberty appeal by the San Carlos Apache Tribe to stop the mining company Rio Tinto from proceeding with its plan to build one of the largest copper mines in the world at Oak Flat in Arizona, which the Tribe considers sacred land. Justices Neil Gorsuch and Clarence Thomas said in a dissent that they would have granted the Tribe’s petition, with Gorsuch calling the court’s decision a “grave mistake” that could “reverberate for generations.” The Trump-appointed justice argued that “before allowing the government to destroy the Apaches’ sacred site, this Court should at least have troubled itself to hear their case.”
I traveled to Superior, Arizona, last year to learn more about Rio Tinto’s project, which analysts estimate could extract enough copper to meet a quarter of U.S. demand. “Copper is the most important metal for all technologies we think of as part of the energy transition: battery electric vehicles, grid-scale battery storage, wind turbines, solar panels,” Adam Simon, an Earth and environmental sciences professor at the University of Michigan, told me of the project. But many skeptics say that beyond destroying a culturally and religiously significant site, there is not the smelting capacity in the U.S. for all of Rio Tinto’s raw copper, which the company would likely extract from Oak Flat and send to China for processing. According to court documents, Oak Flat could be transferred to Rio Tinto’s subsidiary Resolution Copper as soon as June 16. In a statement, Wendsler Nosie Sr. of Apache Stronghold — the San Carlos Apache-led religious nonprofit opposing the mine — said, “While this decision is a heavy blow, our struggle is far from over.”
MTA
New York won a court order on Tuesday temporarily preventing the Trump administration from withholding funding for state transportation projects if it doesn’t end congestion pricing, Gothamist reports. The toll, which went into effect in early January, charges most drivers $9 to enter Manhattan below 60th street, and has been successful at reducing traffic and raising millions for subway upgrades. The Trump administration has argued, however, that the toll harms poor and working-class people by “unfairly” charging them to “go to work, see their families, or visit the city.”
The Federal Highway Administration warned New York’s Metropolitan Transportation Authority that it had until May 28 to end the program, or else face cuts to city and state highway funding. Judge Lewis J. Liman blocked the government from the retaliatory withholding with the court order on Tuesday, which extends through June 9, arguing the state would “suffer irreparable harm” without it. Governor Kathy Hochul, a Democrat, celebrated the move, calling it a “massive victory for New York commuters, vindicating our right as a state to make decisions regarding what’s best for our streets.”
European Union countries agreed on Tuesday to dramatically scale back the bloc’s carbon border tariff so that it will cover only 10% of the companies that currently qualify, Reuters reports. The scheme applies a fee on “imported goods that is equivalent to the carbon price already paid by EU-based companies under the bloc’s CO2 emissions policies,” with the intent of protecting Europe-based companies from being undercut by foreign producers in countries that have looser environmental regulations, Reuters writes. The EU justified the decision by noting that the approximately 18,000 companies to which the levy still applies account for more than 99% of the emissions from iron, steel, aluminum, and cement imports, and that loosening the restriction will benefit smaller businesses.
The famous “climate stripes” graphic — which visualizes the annual increases of global average temperature in red and blue bands — has been updated to include oceanic and atmospheric warming. “We’ve had [these] warming estimates for a long time, but having them all in one graphic is what we’ve managed to do here,” the project’s creator, Ed Hawkins, told Fast Company.
And coal communities and fracking villages and all the rest.
Amid last month’s headlines about departures from the Department of Energy, the exits of Brian Anderson and Briggs White received little attention. Yet their departures foreshadowed something larger: the quiet dismantling of federal support for the economic diversification of fossil fuel–dependent regions of the country.
Anderson and White led the Energy Communities Interagency Working Group, created by a 2021 executive order to coordinate the federal strategy to support coal–reliant regions through a global transition to cleaner energy. This Biden-era strategy recognized that communities where employment opportunities and tax bases depend on fossil fuels face serious risks — local levels of prosperity generally rise and fall with production levels — and they require support to build new engines of economic activity.
In contrast, President Donald Trump’s prescription for fossil fuel communities is to produce more fossil fuels. In addition to cutting clean energy incentives, the budget reconciliation bill passed by the House of Representatives last week seeks to directly support fossil fuel production by accelerating leasing and permitting, lowering royalty rates, and repealing the methane emissions fee.
History suggests that Trump’s ability to help fossil fuel communities by boosting production is limited — similar efforts in Trump’s first term failed to significantly alter the trajectory of coal, oil, or natural gas output. But the funding cuts codified in the current reconciliation bill could do real harm by dismantling federal programs that support economic diversification. Communities that depend on fossil fuel industries will be vulnerable to severe economic shocks when demand for their products eventually declines.
The need to help transitioning regions isn’t new, but federal support for struggling communities has long been stigmatized. In 1980, a federal commission urged policymakers to focus less on struggling places and more on helping individuals move to where opportunity existed. President Ronald Reagan used this report to justify cutting federal economic development programs, including proposing to eliminate the Appalachian Regional Commission. Congress did not fully abolish the ARC, but its budget was slashed nearly in half, leading to staff reductions and the phasing out of the programs designed to bolster the economy of the persistently struggling region.
In the decades that followed, manufacturing towns were largely left to fend for themselves as globalization accelerated. A study by MIT’s David Autor and colleagues showed that 86% of the manufacturing job losses from trade shocks in the early 2000s were still reflected in depressed local employment rates in 2019. Most workers didn’t find new jobs or migrate.
If the loss of dominant employers causes “miniature Great Depressions” in local economies across the country, then a rapid decline in fossil fuels spells acute risks for communities that depend on these industries for jobs and public revenues. We see this happening already in coal-reliant regions. In Boone County, West Virginia, coal production declined by over 80% from 2009 to 2019, causing the county’s gross domestic product to decline by over 60%. Three of Boone’s 10 elementary schools were forced to close.
President Trump entered office in 2017 pledging to “bring the coal industry back 100%” with a deregulatory strategy much like the one his administration is pursuing today. But during his first four-year term, domestic coal mining employment fell by 26%, and coal-fired power plant capacity declined by 13%, demonstrating the futility of doubling down on an economic model when macroeconomic forces are working against it.
These outcomes are not inevitable. Four-hundred miles west of Boone, the far more economically diverse Hopkins County, Kentucky was able to weather its own 75% decline in coal production without a comparable economic crash. In Germany’s Ruhr Valley, the German government paired a coal phase-out with over €100 billion in long-term investments — new universities, industrial incentives, environmental restoration, and worker retraining. While some towns in the region are still struggling, the Ruhr Valley’s shift from a coal powerhouse to a more diverse, knowledge-based economy shows that fossil fuel regions can reinvent themselves.
Recent policies in the U.S. began to take similar steps. As part of a broader federal place-based economic strategy, the American Rescue Plan dedicated hundreds of millions to rebuilding coal communities in 2021. Then came the Infrastructure Investment and Jobs Act, which included billions for cleaning up abandoned mines and orphaned oil wells and funding large-scale demonstration projects for carbon capture and hydrogen production. The Inflation Reduction Act added bonus tax credits and carve-outs to grant programs that target fossil fuel communities.
The now-defunct Energy Communities Interagency Working Group helped knit these efforts together. It served as a clearinghouse for funding opportunities, published “how-to” guides for local leaders, and deployed “rapid response teams” to coal regions.
To be sure, the strategy had limitations. Most programs focused narrowly on coal regions and clean energy solutions, and the IWG had minimal funding for its coordinating efforts. But the strategy shift marked real progress and has generated promising early signs, such as an iron air battery manufacturing facility at an old steel mill in Weirton, West Virginia, carbon capture projects in North Dakota and Texas, and “hydrogen hubs” in the Gulf Coast and Appalachia.
Under the Trump administration, that progress is at risk. Government efficiency initiatives have already led to the gutting of federal programs best positioned to support investments in fossil fuel communities, including the Loan Programs Office, the Office of Clean Energy Demonstrations. and the Federal Thriving Communities Network Initiative.
Trump’s budget proposes severe cuts to the federal support for regional economic development, including eliminating the Economic Development Administration, the federal agency dedicated to helping communities strengthen their local economies.
The reconciliation bill passed by the House of Representatives is a step toward codifying those cuts — with reductions in non-defense discretionary annual spending of $163 billion (over 20%) — and it would also eliminate most of the tax credits and grant programs that encourage investments in energy infrastructure projects in fossil fuel communities. Certain policies that are especially well suited for fossil fuel communities, like incentives for enhanced geothermal energy, may be phased out before ever really getting off the ground.
Rolling back support for fossil fuel communities will curb these regions’ opportunities to build new engines of economic prosperity. Without credible, lasting commitments from the federal government, many fossil fuel communities have little choice but to stick to the economic model they know best, despite their vulnerability to the eventual end of fossil fuels.
Revisiting a favorite episode with guest Kate Marvel.
Shift Key is off this week for Memorial Day, so we’re re-running one of our favorite episodes from the past. With Republicans in the White House and Congress now halfway to effectively repealing the Inflation Reduction Act, the United States’ signature climate law, we thought now might be a good moment to remind ourselves why emissions reductions matter in the first place.
To that end, we’re resurfacing our chat from November with Kate Marvel, an associate research scientist at Columbia University and the NASA Goddard Institute for Space Studies. At the time, Trump had just been reelected to the presidency, casting a pall over the annual United Nations climate conference, which was then occurring in Azerbaijan. Soon after, he fulfilled his promise to pull the U.S. out of the Paris Agreement, with its goal of restraining global warming to 1.5 degrees Celsius over pre-industrial levels.
In this episode, we talk with Kate about why every 10th of a degree matters in the fight against climate change, the difference between tipping points and destabilizing feedback loops, and how to think about climate change in a disappointing time. 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.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: I want to dive into tipping points for a second. Are there particular tipping points that are really frightening to you? Because sometimes it feels like that phrase gets used for almost two different things: There are some tipping points where once we start them … these are physical effects in the climate system that once we start, we won’t be able to really reverse them, and I think the Atlantic Meridional Overturning [Circulation] is the classic example, and we should probably explain what that is.
But then there are other tipping points, sometimes, where it’s like once you start them, they don’t only have this cascading physical effect that’s irreversible, but they have a cascading effect on the carbon cycle.
Kate Marvel: Yeah, no, I mean, they all freak me out quite a lot for different reasons. Your point that we use, at least colloquially, tipping points to refer to a lot of bad stuff deserves a little bit more attention — I personally see tipping points getting confused with feedback loops and runaway greenhouse effect.
So, a feedback process is when global warming affects things that exist on the globe, which themselves feed back onto that global warming. So a classic example of a feedback process is ice melt. Ice is super shiny. It’s very reflective. It turns back sunlight that would otherwise fall on the planet and warm it. And we know — you know, science is very solid on this — that when it gets hot, ice melts.
Jesse Jenkins: That’s a good one. Yeah, we’re clear on that.
Marvel: So when ice melts, you take something that used to be shiny and reflective, and now you’ve got darker ocean or darker ground underneath, and so you’re no longer turning back that sunlight. It’s getting absorbed, and that itself feeds back to the warming. That makes the warming worse. So that is an example of what scientists call — and this is the worst terminology in all of science — we call it a ‘positive feedback.’ Because when normal people hear positive feedback, they’re like, Oh, I’m doing a great job. But when scientists say ‘positive feedback,’ we mean ‘destabilizing process that is making warming worse and might lead to catastrophe.’ So I’ll try to say destabilizing feedback and stabilizing feedback, but catch me out on it if I say positive and negative.
So there are a lot of these feedback processes that we understand pretty well. We know that warmer air holds more water vapor — that’s why we’re seeing more intense, extreme downpours. And we know that water vapor is itself a greenhouse gas. So when the planet gets warmer, you’ve got more water vapor in the atmosphere, which itself is trapping more of the heat coming up from the planet. That is an example of a destabilizing feedback.
So there’s a lot of these feedback processes that we understand fairly well. And then there’s some processes that we are not completely baffled by, but we haven’t really nailed down as much. So that’s why clouds are a huge wild card. A lot of the reason we don’t know exactly how hot it’s going to get is we don’t know what clouds are going to do. We don’t know how clouds are going to reorganize themselves. We don’t know if we’re going to get more of this one type of cloud, less of this other type, if they’re going to get more reflective, more absorbent, whatever. Clouds are really complicated, and that’s a feedback process that we don’t necessarily understand.
But feedback processes are already happening in the climate system right now. They are going on as we speak. That makes them different from something like a tipping point. A tipping point is generally defined as something that we break that we can’t fix on any timescale that’s relevant to us. So an example of a tipping point is the disintegration of the West Antarctic Ice Sheet. It turns out that once you break an ice sheet, it’s relatively really hard to make a new one. We can’t just rock up in Antarctica with, you know, freezer guns or whatever Arnold Schwarzenegger had in the Batman movie. We can’t do that. That’s not real. Once we break the West Antarctic Ice Sheet, it’s going to be broken for the rest of our lives, and our children’s lives, and our grandchildren’s lives.
Music for Shift Key is by Adam Kromelow.