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Delaying congestion pricing is one of the worst climate policy decisions made by any Democrat in recent memory.

If it holds, then Governor Kathy Hochul’s decision today to delay congestion pricing indefinitely in New York will be a generational setback for climate policy in the United States.
It is one of the worst climate policy decisions made by a Democrat at any level of government in recent memory.
It is worse than the Mountain Valley pipeline, the 300-mile gas pipeline that Senator Joe Manchin of West Virginia got approved in 2022 in exchange for supporting the Inflation Reduction Act.
And it is worse than the Willow project in Alaska, the oil mega-project that President Joe Biden okayed last year under pressure from that state’s local and indigenous leaders.
It is so bad because it will set back the development of climate-friendly cities and rapid transit infrastructure in the United States for years if not decades. And it will deter other American cities from implementing the kind of time-saving, pollution-averting, anti-gridlock measure that the country desperately needs.
There is nothing good to be said for this decision. It is bad politics, bad economics, bad governance, and bad for the climate.
Let us briefly count the ways that it is destructive.
It is stupid coalition politics. Hochul has alienated her allies, including environmental groups, state budget hawks, and transit advocates. Bill McKibben, the longtime New Yorker writer who has become one of the country’s most famous climate activists, called Hochul’s decision “one of the most aggressive anti-environmental actions ever undertaken by a Democratic governor.”
In exchange, Hochul has delighted her Republican adversaries, who can praise her wise decision-making in the weeks to come — and therefore brandish their own bipartisan bonafides — but continue to campaign against congestion pricing through November. Congestion pricing is unpopular now, but in her fecklessness, Hochul has guaranteed that it will be a live issue in November.
It is nonsense budget politics. Hochul says that she has delayed congestion pricing because she is worried about the city’s recovery from the pandemic, but regardless of her reasons, she has now left a $1 billion hole in the transit authority’s budget. The New York Times reports that she wants to fill that hole by raising taxes on the state’s businesses.
But that means that she has taken a tax formerly charged to some New York residents and businesses — but which would also fall on New Jersey and Connecticut residents and businesses — and shifted it entirely to in-state entities. She has, in essence, cut taxes on out-of-state residents and raised taxes on New York businesses and consumers.
And instead of taxing the right to use roads in downtown Manhattan, which are a limited public resource, she will instead tax all business activity in the state. What good will that do for New York’s economy?
Those political and financial flaws might be forgiven if her decision was good for the planet. But don’t worry: It’s also bad climate politics.
Cars, SUVs, and trucks belch more climate pollution into the atmosphere than any other single economic activity in the U.S. Nearly 20% of America’s annual carbon pollution comes from individuals and families driving their private vehicles around on roads and highways. This is a far larger share of national pollution than is generated by more famous climate villains, such as air travel.
We have good ways of dealing with all that carbon pollution. In suburbs, small towns, and rural America, the best way to deal with that tailpipe pollution is to gradually transition from gasoline-burning cars to electric vehicles. In some places, the country can also experiment with using experimental, climate-friendly liquid fuels.
But in cities, people have better and cheaper options than getting EVs. We can stop requiring people to drive everywhere and encourage them to walk, bike, and take public transit instead. That will require, at times, treating the use of roads in city centers as the limited public resource that it is — which means charging cars and trucks to enter the most crowded downtown areas of certain cities at certain times of the day.
That’s what congestion pricing is: a way of encouraging cities to grow in pro-climate, pro-environmental ways. Such a policy has already been successfully implemented in London, Singapore, and other congested cities. Even as an urban car owner, I long wanted the city where I lived for a decade — Washington, D.C. — to adopt a similar policy. After all, when Stockholm started its congestion fee, the rate of asthma attacks among its children dropped by half.
So I looked forward to the start of congestion pricing in New York City, America’s biggest, densest, and most transit-friendly city. New York was bushwhacking a trail for everyone else to follow: If congestion policy was a success there, then other American cities could experiment with it in some form.
By pausing that trial before it has even begun, Hochul has essentially frozen our ability to experiment with congestion pricing anywhere else in the country. By shuttering the policy in New York, she has poisoned pro-climate urban politics everywhere. Now people will say: You saw what happened when New York tried to do congestion pricing. Do you really want to try that here?
In the past, when national Democrats have approved new pipelines or oil projects, they have argued that those projects will not affect the country’s carbon pollution because only demand for fossil fuels, and not the supply of them, drives carbon emissions. But what makes congestion pricing so powerful is that demand is precisely what it targets. Congestion pricing makes buses run faster, pays for the subway system, and pushes people and businesses to consider the social cost of their driving before they get in the car.
Congestion pricing, if implemented widely, can actually conserve fossil fuels and cut carbon emissions. Now Hochul has halted its progress everywhere.
She has made, in other words, a local mistake with national and even global consequences. It is such a foolhardy error that it instantly recasts Kathy Hochul’s climate record as governor.
Hochul has previously been seen as a center-left governor playing a difficult but moderate environmental hand. But is that really her record? She has struggled to build wind farms off the coast of New York, even though it is essential to decarbonizing the state’s power grid. She has so far failed to pass the NY HEAT Act, which would help the state transition away from using fossil fuels to heat its buildings. She has even failed to pass little climate measures that would fund the state’s more modest climate goals.
I would compare her to Senator Joe Manchin, the fossil-fuel-friendly West Virginia lawmaker who repeatedly refused to vote for Biden’s climate policy — except at least Manchin put his political reputation on the line when it mattered and ultimately negotiated, and voted for, the Inflation Reduction Act. At least Manchin has many qualities to recommend him: He was canny, risk-taking, proud, and courageous when it counted. Hochul is just a loser.
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A chat with CleanCapital founder Jon Powers.
This week’s conversation is with Jon Powers, founder of the investment firm CleanCapital. I reached out to Powers because I wanted to get a better understanding of how renewable energy investments were shifting one year into the Trump administration. What followed was a candid, detailed look inside the thinking of how the big money in cleantech actually views Trump’s war on renewable energy permitting.
The following conversation was lightly edited for clarity.
Alright, so let’s start off with a big question: How do investors in clean energy view Trump’s permitting freeze?
So, let’s take a step back. Look at the trend over the last decade. The industry’s boomed, manufacturing jobs are happening, the labor force has grown, investments are coming.
We [Clean Capital] are backed by infrastructure life insurance money. It’s money that wasn’t in this market 10 years ago. It’s there because these are long-term infrastructure assets. They see the opportunity. What are they looking for? Certainty. If somebody takes your life insurance money, and they invest it, they want to know it’s going to be there in 20 years in case they need to pay it out. These are really great assets – they’re paying for electricity, the panels hold up, etcetera.
With investors, the more you can manage that risk, the more capital there is out there and the better cost of capital there is for the project. If I was taking high cost private equity money to fund a project, you have to pay for the equipment and the cost of the financing. The more you can bring down the cost of financing – which has happened over the last decade – the cheaper the power can be on the back-end. You can use cheaper money to build.
Once you get that type of capital, you need certainty. That certainty had developed. The election of President Trump threw that into a little bit of disarray. We’re seeing that being implemented today, and they’re doing everything they can to throw wrenches into the growth of what we’ve been doing. They passed the bill affecting the tax credits, and the work they’re doing on permitting to slow roll projects, all of that uncertainty is damaging the projects and more importantly costs everyone down the road by raising the cost of electricity, in turn making projects more expensive in the first place. It’s not a nice recipe for people buying electricity.
But in September, I went to the RE+ conference in California – I thought that was going to be a funeral march but it wasn’t. People were saying, Now we have to shift and adjust. This is a huge industry. How do we get those adjustments and move forward?
Investors looked at it the same way. Yes, how will things like permitting affect the timeline of getting to build? But the fundamentals of supply and demand haven’t changed and in fact are working more in favor of us than before, so we’re figuring out where to invest on that potential. Also, yes federal is key, but state permitting is crucial. When you’re talking about distributed generation going out of a facility next to a data center, or a Wal-Mart, or an Amazon warehouse, that demand very much still exists and projects are being built in that middle market today.
What you’re seeing is a recalibration of risk among investors to understand where we put our money today. And we’re seeing some international money pulling back, and it all comes back to that concept of certainty.
To what extent does the international money moving out of the U.S. have to do with what Trump has done to offshore wind? Is that trade policy? Help us understand why that is happening.
I think it’s not trade policy, per se. Maybe that’s happening on the technology side. But what I’m talking about is money going into infrastructure and assets – for a couple of years, we were one of the hottest places to invest.
Think about a European pension fund who is taking money from a country in Europe and wanting to invest it somewhere they’ll get their money back. That type of capital has definitely been re-evaluating where they’ll put their money, and parallel, some of the larger utility players are starting to re-evaluate or even back out of projects because they’re concerned about questions around large-scale utility solar development, specifically.
Taking a step back to something else you said about federal permitting not being as crucial as state permitting–
That’s about the size of the project. Huge utility projects may still need federal approvals for transmission.
Okay. But when it comes to the trendline on community relations and social conflict, are we seeing renewable energy permitting risk increase in the U.S.? Decrease? Stay the same?
That has less to do with the administration but more of a well-structured fossil fuel campaign. Anti-climate, very dark money. I am not an expert on where the money comes from, but folks have tried to map that out. Now you’re even seeing local communities pass stuff like no energy storage [ordinances].
What’s interesting is that in those communities, we as an industry are not really present providing facts to counter this. That’s very frustrating for folks. We’re seeing these pass and honestly asking, Who was there?
Is the federal permitting freeze impacting investment too?
Definitely.
It’s not like you put money into a project all at once, right? It happens in these chunks. Let’s say there’s 10 steps for investing in a project. A little bit of money at step one, more money at step two, and it gradually gets more until you build the project. The middle area – permitting, getting approval from utilities – is really critical to the investments. So you’re seeing a little bit of a pause in when and how we make investments, because we sometimes don’t know if we’ll make it to, say, step six.
I actually think we’ll see the most impact from this in data center costs.
Can you explain that a bit more for me?
Look at northern Virginia for a second. There wasn’t a lot of new electricity added to that market but you all of the sudden upped demand for electricity by 20 percent. We’re literally seeing today all these utilities putting in rate hikes for consumers because it is literally a supply-demand question. If you can’t build new supply, it's going to be consumers paying for it, and even if you could build a new natural gas plant – at minimum that will happen four-to-six years from now. So over the next four years, we’ll see costs go up.
We’re building projects today that we invested in two years ago. That policy landscape we invested in two years ago hasn’t changed from what we invested into. But the policy landscape then changed dramatically.
If you wipe out half of what was coming in, there’s nothing backfilling that.
Plus more on the week’s biggest renewables fights.
Shelby County, Indiana – A large data center was rejected late Wednesday southeast of Indianapolis, as the takedown of a major Google campus last year continues to reverberate in the area.
Dane County, Wisconsin – Heading northwest, the QTS data center in DeForest we’ve been tracking is broiling into a major conflict, after activists uncovered controversial emails between the village’s president and the company.
White Pine County, Nevada – The Trump administration is finally moving a little bit of renewable energy infrastructure through the permitting process. Or at least, that’s what it looks like.
Mineral County, Nevada – Meanwhile, the BLM actually did approve a solar project on federal lands while we were gone: the Libra energy facility in southwest Nevada.
Hancock County, Ohio – Ohio’s legal system appears friendly for solar development right now, as another utility-scale project’s permits were upheld by the state Supreme Court.
The offshore wind industry is using the law to fight back against the Trump administration.
It’s time for a big renewable energy legal update because Trump’s war on renewable energy projects will soon be decided in the courts.
A flurry of lawsuits were filed around the holidays after the Interior Department issued stop work orders against every offshore wind project under construction, citing a classified military analysis. By my count, at least three developers filed individual suits against these actions: Dominion Energy over the Coastal Virginia offshore wind project, Equinor over Empire Wind in New York, and Orsted over Revolution Wind (for the second time).
Each of these cases are moving on separate tracks before different district courts and the urgency is plain. I expect rulings in a matter of days, as developers have said in legal filings that further delays could jeopardize the completion of these projects due to vessel availability and narrow timelines for meeting power contracts with their respective state customers. In the most dire case, Equinor stated in its initial filing against the government that if the stop work order is implemented as written, it would “likely” result in the project being canceled. Revolution Wind faces similar risks, as I’ve previously detailed for Heatmap.
Meanwhile, around the same time these cases were filed, a separate lawsuit was dropped on the Interior Department from a group of regional renewable energy power associations, including Interwest Energy Alliance, which represents solar developers operating in the American Southwest – ground zero for Trump’s freeze on solar permits.
This lawsuit challenges Interior Secretary Doug Burgum’s secretarial orders requiring his approval for renewable energy decisions, the Army Corps of Engineers’ quiet pause on wetlands approvals, and the Fish and Wildlife Services’ ban on permitting eagle takes, as well as its refusal to let developers know if they require species consultations under the Endangered Species Act. The case argues that the administration is implementing federal land law “contrary to Congress’ intent” by “unlawfully picking winners and losers among energy sources,” and that these moves violate the Administrative Procedures Act.
I expect crucial action in this case imminently, too. On Thursday, these associations filed a motion declaring their intent to seek a preliminary injunction against the administration while the case is adjudicated because, as the filing states, the actions against the renewables sector are “currently costing the wind and solar industry billions of dollars.”
Now, a victory here wouldn’t be complete, since a favorable ruling would likely be appealed and the Trump administration has been reluctant to act on rulings they disagree with. Nevertheless, it would still be a big win for renewables companies frozen by federal bureaucracy and ammo in any future legal or regulatory action around permit activity.
So far, Trump’s war on solar and wind has not really been tested by the courts, sans one positive ruling against his anti-wind Day One executive order. It’s easy in a vacuum to see these challenges and think, Wow, the industry is really fighting back! Maybe they can prevail? However I want to remind my readers that simply having the power of the federal government grants one the capacity to delay commercial construction activity under federal purview, no matter the legality. These matters can become whack-a-mole quite quickly.
Dominion Energy’s Coastal Virginia offshore wind project is one such example. Intrepid readers of The Fight may remember I was first to report the Trump administration might try to mess around with the permits previously issued for construction through litigation brought by anti-renewables activists, arguing the government did not adequately analyse potential impacts to endangered whales. Well, it appears we’re getting closer to an answer: In a Dec. 18 filing submitted in that lawsuit, Justice Department attorneys said they have been “advised” that the Interior Department is now considering whether to revoke permits for the project.
Dominion did not respond to a request for comment about this filing, but it is worth noting that the DOJ’s filing concedes Dominion is aware of this threat and “does not concede the propriety” of any review or revocation of the permits.
I don’t believe this alone would kill Coastal Virginia given the project is so far along in construction. But I expect a death by a thousand cuts strategy from the Trump team against renewable energy projects writ large, regardless of who wins these cases.