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The raw material of America’s energy transition is poised for another boom.
In the town of Superior, Arizona, there is a hotel. In the hotel, there is a room. And in the room, there is a ghost.
Henry Muñoz’s father owned the building in the early 1980s, back when it was still a boarding house and the “Magma” in its name, Hotel Magma, referred to the copper mine up the hill. One night, a boarder from Nogales, Mexico, awoke to a phantom trying to pin her to the wall with the mattress; naturally, she demanded a new room. When Muñoz, then in his fearless early 20s, heard this story from his father, he became curious. Following his swing shift at the mine, Muñoz posted himself to the room with a six-pack of beer and passed the hours until dawn drinking and waiting for the spirit to make itself known.
Muñoz didn’t see a ghost that night, but he has since become well acquainted with others in town. There is the Mexican bakery, which used to sell pink cookies but now opens only when the late owner’s granddaughter feels up to it. There’s the old Magma Club, its once-segregated swimming pool — available one day a week to Hispanics — long since filled in. Muñoz can still point out where all the former bars were on Main Street, the ones that drew crowds of carousing miners in the good years before copper prices plunged in 1981 and Magma boarded up and left town. Now their dusty windows are what give out-of-towners from nearby Phoenix reason to write off Superior as “dead.”
“What happens when a mine closes, the hardship that brings to people — today’s generation has never experienced that,” Muñoz told me.
Superior is home to about 2,400 people, less than half its population when the mine was booming. To tourists zipping past on U.S. 60 to visit the Wild West sites in the Superstition Mountains, it might look half a step away from becoming a ghost town, itself. As recently as 2018, pictures of Main Street were used as stock photos to illustrate things like “America’s worsening geographic inequality.”
But if you take the exit into town, it’s clear something in Superior is changing. The once-haunted boarding house has undergone a multi-million-dollar renovation into a boutique hotel, charging staycationers that make the hour drive south from Scottsdale $200 a night. Across the street, Bellas Cafe whips up terrific sandwiches in a gleaming, retro-chic kitchen. The Chamber of Commerce building, a little further down the block, has been painted an inviting shade of purple. And propped in the window of some of the storefronts with their lights on, you might even see a sign: WE SUPPORT RESOLUTION COPPER.
Resolution Copper’s offices are located in the former Magma Hospital, where Muñoz was born and where his mother died. People in hard hats and safety vests mill about the parking lot, miners without a mine, which is not an unusual sight in Superior these days — no copper has been sold out of the immediate area in over two decades. And yet just a nine-minute drive further up the hill and another 15-minute elevator ride down the deepest mine shaft in the country lies one of the world’s largest remaining copper deposits. It’s estimated to be 40 billion pounds, enough to meet a quarter of U.S. demand, according to the company’s analysis.
That’s “huge,” Adam Simon, an Earth and environmental sciences professor at the University of Michigan, told me, and not just in terms of sheer size.
“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,” Simon said. In May, he published a study with Lawrence Cathles, an Earth and atmospheric sciences researcher at Cornell University, which looked at 120 years of copper-mining data and found that just to meet the demands of “business as usual,” the world will need 115% more of the material between 2018 and 2050 than has been previously mined in all of human history, even with recycling rates taken into account.
Aluminum, used in high-voltage lines, is sometimes floated as a potential substitute, but it’s not as good of a conductor, and copper is almost always the preferred metal in batteries and electricity generation. Renewables are particularly copper-intensive; one offshore wind turbine can require up to 29 tons. What lies in the hills behind Superior, then, represents “millions of electric vehicles, millions of wind turbines, millions of solar panels. And it’s also lots of jobs, from top to bottom — jobs for people with bachelor’s degrees in engineering, mining, geology, and environmental science, all the way down to security officers and truck drivers,” Simon said. He added: “The world will need more copper year over year for both socioeconomic improvement in the Global South and also the energy transition, and neither of those can happen without increasing the amount of copper that we produce.”
Muñoz insisted to me that the promises of jobs and a robust local economy are a kind of Trojan horse. “Everybody’s getting drunk and having a good time: ‘Oh, look at the gift they brought us!’” he said of Superior’s support for Resolution Copper. “But at night, they’re going to sneak out of that horse, and they’re going to leave an environmental disaster.”
For now, though, the copper has just one catch: Resolution isn’t allowed to touch it.
If not for a painted sign declaring the ground HOLY LAND, there would be nothing visible to suggest the 16 oak-shaded tent sites over Resolution Copper’s ore body were anything particularly special. The Oak Flat campground is less than five miles past Superior, but at an elevation of nearly 4,000 feet, it can feel almost 10 degrees Fahrenheit cooler. On the late June day that I visited with Muñoz, Sylvia Delgado, and Orlando “Marro” Perea — the leaders of the Concerned Citizens and Retired Miners Coalition — the floor of the East Valley was 113 degrees Fahrenheit, and the altitude offered only limited relief.
Directly below us and to the east of the campground, beneath a bouldery, yucca-studded desert, lies the copper deposit. At 7,000 or so feet deep, extracting it would require an advanced mining process called block caving, in which ore is collected from below through what is essentially a controlled cave-in, like sand slipping through the neck of an hourglass.
Muñoz, a fifth-generation miner, prefers the metaphor of going to the dentist. “They drill out your tooth and refill it: that’s basically traditional cut-and-fill mining,” he told me. “Block cave, on the other hand, would be going to the dentist and having them pull out the whole molar. It just leaves a vacant hole.” In this case, the resulting cavity would be almost two miles wide and over 1,000 feet deep by the time the ore was exhausted sometime in the 2060s.
Even four decades is just a blink of an eye for Oak Flat, though, where human history goes back at least 1,500years; anthropologists say the mine’s sinkhole would swallow countless Indigenous burial locations and archeological sites, including petroglyphs depicting antlered animals that Muñoz and Perea showed me hidden deep in the rocks. Even more alarmingly, the subsidence would obliterate Chí'chil Biłdagoteel, the Western Apache’s name for the lands around Oak Flat, which are sacred to at least 10 federally recognized tribes. The members of the San Carlos Apache who are leading the opposition effort, and use the location for a four-day-long girlhood coming-of-age ceremony, say it is the only place where their prayers can reach the Creator directly.
Mining and Indigenous sovereignty have been at odds in Arizona for over a century. “The Apache is as near the lobo, or wolf of the country, as any human being can be to a beast,” The New York Times wrote in 1859, claiming the tribe was “the greatest obstacle to the operations of the mining companies” in the area. Three years later, the U.S. Army’s departmental commander ordered Apache men killed “wherever found,” the social archaeologist John Welch writes in his eye-opening historical survey of the region, in which he also advocates for using the term “genocide” to describe the government’s policies. That violence still casts a shadow in Superior: Apache Leap, an astonishing escarpment that looms over the town and backs up against Oak Flat, is named for a legend that cornered Apache warriors jumped to their deaths from its cliffs rather than surrender to the U.S. Cavalry.
As the Apache were being forced onto reservations and into residential boarding schools during the late 1890s, a treaty with the government set aside Oak Flat for protection. The land was later fortified against mining by President Dwight D. Eisenhower, with the federal protections reconfirmed by the Nixon administration in the 1960s. (The defunct Magma Mine that fueled the first copper boom in Superior is located just off this 760-acre “Oak Flat Withdrawal Area.”)
In 1995, the enormity of the Oak Flat ore body — and the billions it would be worth if it could be accessed — started to become apparent. The British and Australian mining companies Rio Tinto and BHP Billiton formed a U.S. subsidiary, Resolution Copper, which bought the old Magma mine and began to lobby Arizona politicians to sign over the neighboring parcel of Oak Flat. Between 2004 and 2013, lawmakers from the state introduced 11 different land transfer bills into Congress, none of which managed to earn broad support.
Then, in December 2014, President Barack Obama signed a must-pass defense spending bill. On page 1,103 was a midnight rider, inserted by Arizona Republican Senators John McCain and Jeff Flake, which authorized a land transfer of 2,400 acres of Tonto National Forest, including Oak Flat, to Resolution Copper in exchange for private land the company had bought in other parts of the state. (Flake previously worked as a paid lobbyist for a Rio Tinto uranium mine, and the company contributed to McCain’s 2014 Senate campaign.)
Heatmap Illustration / Esri, TomTom, Garmin, FAO, NOAA, USGS, © OpenStreetMap contributors, and the GIS User Community
The senators’ rider also included an odd little twist. While the National Environmental Policy Act requires the Forest Service to conduct an environmental impact statement for a potential mine, the bill stipulated that the land transfer to Resolution Copper had to be completed within a 60-day window of the final environmental impact statement’s release, regardless of what the FEIS found.
After six years of study, the FEIS was rushed to publication by President Donald Trump in the final five days of his term, triggering that 60-day countdown. President Biden rescinded Trump’s FEIS once he took office in 2021, pending further consultation with the tribes, but the clock will begin anew once a revised FEIS is released, potentially later this year. (The new FEIS was expected last summer, but the Forest Service has since reported there is no timeline for its release. The agency declined to comment to Heatmap for this story, citing ongoing litigation.)
A spokesperson for Resolution Copper told me that the company is “committed to being a good steward of the land, air, and water throughout the entirety of this project,” and described programs to restore the local ecology and preserve certain natural features, including Apache Leap. “At each step,” the spokesperson said, “we have taken great care to solicit and act upon the input of our Native American and other neighbors. We have made many changes to the project scope to accommodate those concerns and will continue those efforts over the life of the project.”
Meanwhile, Apache Stronghold — the San Carlos Apache-led religious nonprofit opposing the mine — filed a lawsuit to block the land transfer, arguing that the destruction of Oak Flat infringes on their First Amendment right to practice their religion. The lower courts haven’t agreed, citing a controversial 1988 decision against tribes who made a similar argument in defense of a sacred grove of trees in California. Apache Stronghold, joined by the religious liberty group Becket, is now asking the U.S. Supreme Court to hear its case, a decision that is expected any day now. Nearly everyone I spoke with for this story, however, was pessimistic that the Justices would agree to hear the battle over Oak Flat, meaning the lower court’s ruling against Apache Stronghold would stand.
If Mila Besich could have it her way, Biden would visit Superior. He’d marvel at Apache Leap and Picketpost Mountain, visit the impressive new Superior Enterprise Center — paid for partially with money from his 2021 American Rescue Plan Act — and maybe wrap up the day with a purple scoop of prickly pear ice cream from Felicia’s Ice Cream Shop. And, most importantly, he’d hear her pitch: that “Superior and the state of Arizona have a once-in-a-generation opportunity to be the leader in advancing your green energy strategy.” She says Superior — and America — needs this mine.
Superior is a blue town, and Besich, its mayor, is a Democrat, which means she has found herself in the awkward position of defending Resolution Copper against colleagues like Congressman Raúl Grijalva of Tucson and Senator Bernie Sanders of Vermont, who have introduced unsuccessful bills in Congress to prevent the land transfer. There is something of a bitter irony, too, in seeing her party tout the economic upsides of the energy transition while standing in the way of Superior’s mine, which would employ an average of 1,434 workers per year and add over $1 billion annually to Arizona’s economy during its lifespan, according to the FEIS.
“Every mayor wants more jobs in their community,” Besich told me simply. But, she also pointed out, “Copper is critical to the green economy, so if we want the green economy, we should want to be mining American copper.”
Superior, of course, isn’t just any town. “Everybody here either worked in the mines or had family that worked in the mines,” James Schenck, a former employee of Resolution Copper who supports the mine and serves as the treasurer for Rebuild Superior, a nonprofit working to diversify the local economy, told me. “They understand the downsides, and some of them, for a while, were having a hard time understanding how this is different than what went on before.”
Though everyone seems to be on cordial terms — at one point during my visit, I was having lunch with Muñoz and Delgado when Besich walked in, and everyone smiled politely at one another — there are still clear factions. A Facebook group for locals warns against “posts concerning DRAMA, POLITICS, RELIGION, and MINING,” presumably the same topics to be avoided at family Thanksgivings.
The critical mineral experts I talked to for this story, though, said Schenck is largely right on that point. “Mining in 2024 is radically different than mining in 1954 or in 1904,” Simon told me. “It is really surgical.”
Muñoz is one of those in town who still isn’t buying it, and has converted his garage into an interpretive center for exposing the perceived infiltrators. As soft classic rock played over the speakers and a fan whirred to keep us cool, he showed me the 3D model he had commissioned of the Oak Flat sinkhole, with a miniature Eiffel Tower subsumed in its crater for scale. Laid out on a table on the other side of the room was a row of six dictionary-thick, spiral-bound sections of the FEIS, their most pertinent sections bookmarked. On the walls, Muñoz had hung pictures of comparable tailings sites in other parts of the world — cautionary tales of the hazards posed during the long lifespan of mines. (Including the water demands, no small concern in a place like Arizona, which opens a whole other can of worms).
“I use my experience to educate the people,” Muñoz said. “This isn’t what it’s made out to be. They’re going to play you.”
Muñoz was employed at the Magma Copper mine until 1982, when he was 27. “One day they said, ‘We’re shutting down.’ They folded up just like a carnival does on Monday morning,” he recalled. The abrupt departure devastated Superior: In These Timesdescribed the following years as an “economic cataclysm” for the town. By 1989, the median household income was just $16,118 compared to $36,806 in Queen Creek, the nearest Phoenix suburb just a 45-minute drive away.
“I witnessed grown men cry,” Muñoz said. “Men who’d been in the mines pretty close to 30 years — they never knew nothing else.” His father, the former boarding house owner, was among them: “He had limited writing abilities and what have you. He was 58. People lost their homes here. They lost their cars. There were divorces. Some people committed suicide. The drinking, the drugs. It was a bad time.”
Muñoz went on food stamps and unemployment. “This generation that is coming up, they’ve never experienced that,” he said. “They’ve never experienced a repossession note in the mail from the bank. They’ve never experienced a disconnection notice hanging from your front door knob. And they’ve never experienced calling up the utilities and saying, ‘Hey, can you wait until Friday when my unemployment check comes in?’”
Superior’s story isn’t unique; Arizona’s Copper Triangle is a constellation of hollowed-out company towns. Like many other out-of-work Magma miners, Muñoz eventually found a job at San Manuel, a BHP-owned block cave mine about an hour south of Superior. Then, in 1999, copper prices stuttered again, and by 2003, it shut down, too.
Muñoz had just returned from a car show in San Manuel when we met in his garage, and he reported it was still a sorry sight. “The main grocery store is closed, the Subway, all the buildings are boarded up, and the schools are shut down,” he said. The mine “just abandoned that town.”
Even as Muñoz and the Concerned Citizens and Retired Miners Coalition work with Apache Stronghold and national environmentalist groups like HECHO, the Sierra Club, and the National Wildlife Federation try to block Resolution Copper’s mine, there is a distinct feeling in Superior of its inevitability. Schenck, the treasurer for Rebuild Superior, told me he suspects just “10% or 15%” of people in town are “against the project.”
“My personal belief is this copper deposit is going to be developed at some point,” Schenck said. “It’s too important.”
Besich, the mayor, gave this impression too. “What people need to understand is, this ore body is not going anywhere,” she said. “Someone will mine it in the future.” She views Superior and the copper industry as partners in an “arranged marriage,” and her job as mayor is helping them “figure out how to get along.”
From the outside, though, Resolution Copper looks more like a sugar daddy. To date, Rio Tinto and BHP have spent more than $2 billion combined pursuing the Oak Flat mine, including pumping money into the Chamber of Commerce building, the Enterprise Center, and the fire department. When the town of Kearny, downstream of the mine’s proposed tailings site, needed a new ambulance, Resolution Copper offered to help foot the bill. Local high schoolers and tribal members can even apply for Resolution Copper scholarships.
Critics say Resolution Copper is buying political and social influence in the Copper Corridor, a modern-day iteration of the propaganda tactics that swept aside the Apache in the late 1800s. Rio Tinto and BHP “remain committed to influencing U.S. government decisions about the use of public lands and minerals, regardless of additional harms to those lands, to Native Americans, or to National Register historic sites and sacred places,” the archaeologist Welch wrote in his Oak Flat study.
Rio Tinto is infamous even in the mining industry for its poor history of handling community- and heritage-related concerns. To pick a recent example, the company drew international condemnation for its 2020 destruction of the Juukan Gorge cave in Western Australia, a sacred site to the Aboriginal people that had evidence of continuous human occupation going back to the Ice Age. Though Rio Tinto had the legal right to destroy the 45,000-year-old caves, “it is hard to believe community engagement is being taken seriously” by the company, Glynn Cochrane, a former Rio Tinto senior advisor, said in a testimony in the aftermath. Archaeologists and sympathetic politicians have warned that the cultural and spiritual loss caused by mining Oak Flat would be like a second Juukan Gorge.
The San Carlos Apache are not a monolith, however, and the community has differing beliefs about the cultural importance of Oak Flat. Tribal members who support the mine or work for Resolution Copper are often cited by non-Native supporters as proof of Apache Stronghold’s supposedly arbitrary defense of Oak Flat. (Apache Stronghold, which is on a prayer journey to petition the Supreme Court, did not return Heatmap’s request for comment.)
Muñoz and his team are specifically worried about how Superior, the town, will make out. U.S. copper smelters are already at capacity, meaning Resolution Copper would likely send much if not all of the raw copper extracted at Oak Flat to China for processing. (Rio Tinto’s largest shareholder is the Aluminum Corporation of China.) The spokesperson for Resolution Copper told me that it’s the company’s priority to process the ore domestically, and Rio Tinto does have its own facility in the U.S., the Kennecott copper smelting facility in Utah. Yet it hasn’t committed publicly to processing the Arizona ore there, and it’s far from clear that it even has the capacity to do so.
For Simon, the University of Michigan professor, that shouldn’t be a deterrent: “If we mine more copper here and it just means we have to export it — who cares?” he pushed back. “If it has to go to China and they smelt it, then you send it to China and they smelt it. Climate is the prize, and if we want to mitigate our impact, we’ve got to do it. There are no ifs, ands, or buts.”
Oak Flat is also located outside of Superior’s town limits, meaning the community would only recoup about $500,000 in tax revenue, on the high end, from the mine annually, according to the 2021 FEIS — Schenek told me the town’s budget is around $3 million, so it’s hardly insignificant, though it is peanuts compared to the $38 million the state would reap. The FEIS additionally estimated that only about a quarter of the mine’s eventual employees would actually “seek to live in or near Superior;” many would choose instead to commute the hour or so from Phoenix’s Maricopa County.
Because of technological advances in mining and robotics, the mine also won’t bring back the physical jobs locals remember from the 1970s — by Resolution Copper’s own admission. Besich, at least, isn’t bothered by this detail: “In all reality, I don’t see my children and their peers wanting to do the manual physical labor that my grandfather, my father, and certainly my great-grandfather did,” she told me. “So the change in technique is good, and I think that it’s actually better for the environment in the long term.” She added that Resolution Copper’s investment in things like local infrastructure and worker training programs will compensate for the comparably insignificant tax revenue the town will otherwise receive, ensuring Superior gets a fair cut of the bonanza.
What supporters and opponents of the mine can agree on is that Superior must avoid the devastation of the 1980s if or when the Oak Flat mine is exhausted in 40 or more years. Besich and Schenck told me their vision is for Superior to be a town with a mine, not a mining town. But is such a thing even possible? In recent years, Superior has tried to position itself as an outdoor recreation gateway to the many climbing routes and hiking trails in the area. Yet I struggle to imagine anyone would want to vacation or recreate so close to a massive mining operation.
Muñoz believes Superior should throw itself entirely into tourism, which brings in three times as much revenue as the copper industry in Arizona. He dismissed arguments that losing the mine this far into negotiations and preparations would set the town back two decades, telling me about a conversation he had with Vicky Peacey, the president of Resolution Copper. “She said, ‘How do I tell my 300-plus employees that they don’t have a job?’” he recalled. “I said, ‘The same way BHP told the 3,300 in San Manuel they didn’t have a job. Magma Copper didn’t have a problem telling us we didn’t have a job in ‘82.”
Whatever gets decided about Oak Flat will reverberate far beyond Superior, though. “We’ve got to keep our eyes on the prize,” Simon told me. “And if the prize is mitigating human impacts on climate, and that requires the energy transition, and that requires copper, and we have a potential mine in Arizona that would provide 500,000 tons of copper every year for decades — we need to do that.”
At the end of my day in Superior, I went with Muñoz and Delgado, another former miner, to visit the haunted boarding house.
The renovated interior was surprisingly beautiful, decorated with period-appropriate details like iron bed frames, clawfoot bathtubs, and lace curtains that softened the harshness of the mid-afternoon light. Though even the FEIS warns that “mining in Arizona has followed a ‘boom and bust’ cycle, which potentially leads to great economic uncertainty,” it was with a pang that I imagined the building one day falling back into disrepair. It, and the town, had survived too much.
After peeking into Room 103, where Muñoz had passed his tipsy night all those decades ago, we asked the friendly woman working the front desk if she’d had any supernatural experiences herself — surely she’d seen the mattress-flipping phantom, or swinging chandeliers, or perhaps a white-boot miner who’d come down from the hills?
To our disappointment, she shook her head. For now, whatever ghosts there once might have been in Superior had gone.
Editor’s note: This story has been updated to include comment from Resolution Copper.
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The Ways and Means Committee released its proposed budget language, and it’s not pretty for clean energy.
The House Ways and Means Committee, which oversees tax policy, released its initial proposal to overhaul the nation’s clean energy tax credits on Monday afternoon. These are separate and in addition to the extensive cuts to Inflation Reduction Act grant programs proposed by the Energy and Commerce Committee, Transportation Committee, and Natural Resources Committee in the past few weeks.
Here’s a rundown of the tax credit proposal, which, at first glance, appears to amount to a back-door full repeal of the climate law. There’s a lot that could change before we get to a final budget, let alone have a text head to the Senate. We’ll have more analysis on what these changes would mean in the days and weeks to come.
The text proposes ending the tax credit for new EVs (that is, 30D) on December 31, 2025 — with one exception. The credit would remain in effect for one year, through the end of 2026, for vehicles produced by automakers that have sold fewer than 200,000 tax credit-qualified cars between 2010 and the end of this year. That means that no Teslas would qualify for the tax credit next year, as the company has sold far more than 200,000 tax credit-eligible vehicles. A new entrant to EVs, like Honda with its Prologue model, will likely still qualify.
The committee also proposes ending the tax credit for used EVs (25E) and commercial EVs (45W) by the end of this year. This would effectively end the “leasing loophole” that allowed Americans to redeem the tax credit on vehicles that didn’t qualify for 30D because they didn’t meet domestic content requirements, meaning consumers could get discounts on leases of a wide range of makes and models.
Lastly, the draft proposes terminating the tax credit for residential EV chargers (30C) at the end of this year.
The GOP has proposed an early phase-out of the technology-neutral production and investment tax credits, which subsidize zero-emissions power generation projects including wind, solar, energy storage, advanced nuclear, and geothermal. It also proposed significant changes for the years they remain in effect.
Currently, new clean electricity projects can earn a 2.75 cents for every kilowatt-hour they produce for the first 10 years under section 45Y of the tax code. Alternatively, project developers can get a 30% investment tax credit (48E) on new projects. The Inflation Reduction Act scheduled both of these programs to phase out beginning in 2032, and expire at the end of 2035. It included a major caveat, however: that this phase-out would only happen if greenhouse gas emissions from U.S. power generation fell below 25% of 2022 levels. Otherwise, the tax credits would be maintained at their initial amounts until this target was met.
Under the GOP proposal, both credits would start to phase down in 2029, and new projects would no longer be eligible for either credit beginning in 2032. The proposal also cuts out a key provision that would have grandfathered many more projects into the tax credit. Under current law, a project only has to start construction within a certain year to qualify for that year’s tax credit amount. The draft text changes this, requiring a project to be “placed in service” before 2032 in order to qualify.
A separate tax credit for existing nuclear power generation (45U) would also phase down on the same timeline, despite Trump and other Republicans’ interest in boosting nuclear energy.
“Transferability” supercharged the nation’s clean energy tax credits by allowing project developers with low tax liability to sell their credits to another entity that stood to benefit from them. Previously, developers could only monetize their unusable tax credits through complicated tax equity deals.
Recipients of a wide range of tax credits, including those for clean manufacturing, clean fuels, carbon capture, nuclear power, and hydrogen, can all take advantage of transferability. The provision channeled new capital into the climate economy as corporations looking to reduce their tax liability began scooping up tax credits, indirectly helping to finance clean energy projects. It also helped lower the cost of wind and solar, as developers could earn a premium on tax credits compared to what they got for tax equity transfers, because the whole transaction was cheaper to do.
The proposal would get rid of this option across all of the tax credits beginning in 2028.
The proposal would also impose new sourcing requirements across all of the tax credits, prohibiting developers from using components, subcomponents, or critical minerals sourced from “foreign entities of concern,” a term that applies to companies based in China, Russia, North Korea, or Iran. The consequences would be huge, as China dominates global markets for refined lithium, cobalt, graphite, and rare earths — key materials used in clean energy technologies.
The draft text would also terminate the clean manufacturing credit (45X) in 2032 — one year earlier than under existing law. Wind energy components such as blades, towers, and gearboxes would lose their eligibility sooner, in 2028.
The text proposes repealing three tax credits for residential energy efficiency improvements at the end of 2025. Starting next year, homeowners would no longer be able to claim the Energy Efficiency Home Improvement Credit (25C), which provides up to $3,200 per year for home energy audits, energy-saving windows and doors, air sealing and insulation, heat pumps, and new electrical panels.
It also proposes killing the Residential Clean Energy Credit (25D), which offered homeowners 30% off the cost of solar panels and battery systems to store energy from those solar panels. This credit also subsidizes geothermal home heating systems.
Both of these tax credits have existed in some form since the Energy Policy Act of 2005.
The third credit that would end this year is an up to $5,000 subsidy for contractors who construct new, energy efficient homes (45L).
The proposal would not repeal the energy efficiency tax deduction for improvements made to commercial buildings (179D).
The Inflation Reduction Act created a technology-neutral tax credit for low-carbon transportation fuels, like sustainable aviation fuel and biodiesel (45Z). It operates on a sliding scale, depending on how carbon-intensive the fuel is. The credit is set to expire after 2027, however the GOP proposal would extend it for four years, through the end of 2031.
That said, it would also make a significant change to how the credit is calculated, making it much easier for projects with questionable emissions benefits to qualify. Under the Biden administration, the Treasury Department issued rules that said producers had to account for the emissions tied to indirect land use changes resulting from fuel production. That meant that corn ethanol producers, for example, had to account for the expansion of croplands resulting from the increase of biofuel production and use — which would, in most cases, disqualify corn ethanol from claiming the tax credit. But under the GOP proposal, producers would explicitly not have to account for indirect land use changes.
The GOP proposal would deal a rapid and ruthless death blow to the 45V clean hydrogen production tax credit, requiring developers to begin construction before the end of this year if they want to claim it.
Other than ending transferability, the text makes no changes to the 45Q carbon capture and sequestration tax credit.
Most of the tax credits have provisions that allow project developers to qualify for higher amounts if they pay prevailing wages, hire apprentices, build in a qualified “energy community” or a low-income community, or use a certain percentage of domestically-produced materials. This initial draft from the GOP would not change any of those provisions.
The Energy and Commerce Committee dropped its budget proposal Sunday night.
Republicans on the House Committee on Energy and Commerce unveiled their draft budget proposal Sunday night, which features widespread cuts to the Inflation Reduction Act and other clean energy and environment programs.
The legislative language is part of the House’s reconciliation package, an emerging tax and spending bill that will seek to extend much of the 2017 Tax Cuts and Jobs Act, with reduced spending on the IRA and Medicaid helping to balance the budgetary scales.
The Energy and Commerce committee covers energy and environmental programs, while the Ways and Means Committee has jurisdiction over the core tax credits of the IRA that power much of America’s non-carbon power generation. Ways and Means has yet to release its draft budget proposal, which will be another major shoe to drop.
The core way the Energy and Commerce proposal generates budgetary savings is by proposing “rescissions” to existing programs, whereby unspent money would be yanked away.
The language also includes provisions to auction electromagnetic spectrum, as well as changes to Medicaid.Overall, the Congressional Budget Office told the committee, the recommendations would “reduce deficits by more than $880 billion” from 2025 to 2034, which was the target the committee was instructed to hit. The Sierra Club estimated that the cuts specifically to programs designed to help decarbonize heavy industry would add up to $1.6 billion.
The proposed rescissions would affect a number of energy financing and grant programs, including:
And that’s just the “energy” cuts. The language also includes a number of cuts to environmental programs, including:
Lastly, the proposal would also repeal federal tailpipe emission standards starting in the 2027 model year. These rules, which were finalized just last year, would have provided a major boost to the electric vehicle industry, perhaps pushing EV sales to over half of all new car sales by the beginning of the next decade. The language also repeals the latest gas-mileage standards, which were released last year and would have applied to the 2027 through 2031 model years, eventually bumping up miles-per-gallon industry-wide to over 50 by the 2031 model year.
What the Council on Foreign Relations’ new climate program gets drastically wrong.
Let’s start with two basic facts.
First, the climate crisis is here now, killing people, devastating communities, and destroying infrastructure in Los Angeles and Asheville and Spain and Pakistan and China. And it will get worse.
Second, Donald Trump is the President of the United States. He began the process to withdraw the United States from the Paris Agreement on January 20, 2025, his first day in office in his second term. (He, of course, did this in his first term as well.) He illegally froze funding for climate programs that had passed and became law during the Biden administration, and his administration continues to ignore court orders to unfreeze these monies. He has signed numerous executive orders, including onreinvigorating clean [sic] coal,reversing state-level climate policies, “Zero-based regulatory budgeting to unleash American energy,” and “unleashing” American energy, the last of which revoked more than a dozen Biden era executive orders.
How do we address a world that is increasingly shaped by these two facts?
One attempt can be seen in the Council on Foreign Relations’s new “Climate Realism Initiative.” Its statement of purpose attempts to make climate action palatable to MAGA world by securitizing it, framing climate change as a foreign threat to Fortress America. It calls for investing in next-generation technologies and geoengineering in the hopes of leapfrogging the Chinese-led clean energy revolution that is beginning to decarbonize the world today is the best realistic way forward.
This attempt is doomed to failure. Real climate realism for the United States is to stop the destruction of American state capacity, and then to reflect and build on areas of core strength including finance and software.
CRI’s launch document does not call for the U.S. to reduce its own emissions. I’ll say that again: There is no call for the U.S. to reduce its own emissions in the essay establishing the mission and objectives of the Climate Realism Initiative. Written by Varun Sivaram, formerly chief strategy and innovation officer at wind energy developer Orsted and now the leader of the initiative, the essay proposes that four dug-in “fallacies” are getting in the way of effective policy-making: that climate change “poses a manageable risk” to the U.S.; that “the world’s climate targets are achievable;” that the clean energy transition is a “win-in for U.S. interests and climate action;” and that “reducing U.S. domestic greenhouse gas emissions can make a meaningful difference.” For Sivaram, the problem is always other places and their emissions.
He then goes on to propose three “pillars” of climate realism: the need for America to prepare for a world “blowing through climate targets;” to “invest in globally competitive clean technology industries;” and to “lead international efforts to avert truly catastrophic climate change.” How an America that does not commit to reduce its own emissions will have any credibility or standing to lead international efforts is left unstated.
Sivaram attempts to trick the reader into overlooking America’s emissions by ignoring the facts of the past and focusing instead on guesses about the future. It’s true that in 2023, China produced more than a quarter of new global carbon pollution — more than the United States, Europe, and India combined. But no country has contributed more to the blanket of pollution that traps additional heat in our atmosphere than the United States, which has emitted over 430 billion tons of CO2, or 23% of the world’s total historical emissions. Even in 2023, the U.S. remained the world’s number two carbon polluter.
Sivaram goes further than merely minimizing the U.S. role in creating our current climate problems. Indeed, he sets up climate change as a problem that foreign countries are imposing on Americans. “Foreign emissions,” he writes, “are endangering the American homeland,” and the effects of climate disasters “resemble those if China or Indonesia were to launch missiles at the United States.” There is something to this rhetoric that is powerful — we should think about climate-induced disasters as serious threats and respond to them with the kind of resources that we lavish on the military industrial complex. But the idea that it is foreign emissions that are the primary source of this danger is almost Trumpian.
The initiatives proposed in the Climate Realism launch are the initiatives of giving up. Investing in resilience and adaptation is needed in any scenario, but tying this spending on adaptation to Trumpian notions of protecting our borders reeks of discredited lifeboat ethics, which only cares to save ourselves and leaves others to suffer for our sins. And while supporting next-generation technologies is an appropriate piece of the policy puzzle, they should be like the broccoli at a steakhouse: off to the side and mostly superfluous compared with the meat and potatoes of deployment and mitigation to decarbonize today.
Sivaram may argue that there’s no point in trying to compete against China in the technologies of today when Chinese firms are so dominant and apparently willing to make these products while earning minimal profits. And from a parochial profit-maximizing perspective, there is a business case that firms should not be building lots of new solar cell manufacturing facilities given global manufacturing capacity.
But if American automotive firms simply ignore the coming EV wave and hope against hope that some breakthrough in solid state batteries will allow them to leapfrog over the firms vying today, they are fooling themselves. Electric vehicle giant BYD and world-leading battery manufacturer CATL have both announced batteries that can charge a car in five minutes. Both are also moving in the solid state space, and CATL is pushing into sodium ion batteries.
The notion that U.S. firms ought to sit out this fight for strategic reasons also ignores how China has come to dominate these sectors — by investing in today’s state of the art and pushing it forward through incremental process improvements at scale. The Thielian notion that “competition is for losers” leads to an immense amount of waste as wannabe founders search for unbreakable technological advantages. If venture capitalists want to fund such bets, I’m not going to stop them. But as a policy prescription for climate realism, it fails.
The final gambit of the essay is to advocate for America-controlled geoengineering. This, too, is an area where research may be needed. But regardless, it is the kind of emergency backup plan that you hope that you never need to use, rather than something that should be central to anyone’s policy strategy. Trump is currently decimating American capacity to research hard problems, whether they be cancer or vaccines or social science or anything else, so it is difficult to imagine that this administration is likely to spend real resources to investigate geoengineering.
The Climate Realism Initiative pitches itself as “bipartisan.” But where is the MAGA coalition that supports this? Even simple spending on adaptation and resilience seems unlikely to find much of a political home given the Trump administration’s drastic cuts in weather and disaster forecasting. Sivaram even mentions the need to balance the budget as part of climate realism, which must be a sick joke. For all of the fanfare over cuts to the federal government under Trump, the budget deficit is the last thing that they care about. Tax cuts remain the coin of the realm, with the House budgetary guidelines expanding the deficit by $2.8 trillion. Elon Musk’s Department of Government Efficiency, similarly, has a distorted notion of government efficiency, ignoring the returns to government investments and gutting the tax collection capacity of the IRS.
The Biden administration had plans — “all of the above” energy among them — that were coherent, if not necessarily the most appealing to the world. They were based on the idea that a resilient climate coalition in the U.S. required more than just deploying Chinese-made products.
CRI seems to want to engage instead in a fantasy conversation where anti-Chinese nationalism can unite Americans to fight climate change — an all-form, no-content negative sum realpolitik that does little to address the real, compelling, and deeply political questions that the climate crisis poses.
Alternative visions are possible. The American economy is services based. Americans and American firms will inevitably make some of the hardware components of the energy transition, but the opportunities that play to our strengths are mostly on the software side.
It is critical to remember that the clean technologies that power the energy transition are categorically different from the fossil fuels that the world burned (and still burns) for energy. We do not require a constant stream of these technologies to operate our economy. The solar panels on your roof or in the field outside of town still generate electricity even if you can’t buy new ones because of a trade war. Same with wind turbines. In fact, renewables are a source of energy security because the generation happens from domestic natural resources — the sun and wind. Yet smart thinkers like Jake Sullivan fall into the trap of treating “dependence” on Chinese renewable technologies as analogous to European dependence on Russian natural gas.
Even China’s ban on U.S.-bound rare earth exports won’t make much of a dent. Despite the name, rare earths aren’t that rare, and while China does dominate their processing, it’s a tiny industry; in making fun of the “critical” nature of rare earths, Bloomberg opinion writer Javier Blas noted that the total imports of rare earths from China to the U.S. in 2024 was $170 million, or about 0.03% of U.S.-China trade. That being said, the major concern is if supplies fall to zero then major processes that require tiny amounts of rare earths (like Yttria and turbine construction) could be completely halted with serious fallout.
The American government should carefully choose what industries it would like to support. Commodity factories that have little-to-no profits, like solar cells, seem unattractive. There are many more jobs in installing solar than there are in manufacturing it, after all.
On the other hand, sectors with a much larger existing domestic industry, such as wind turbines and especially automobiles, should not be left to wither. But rather than a tariff wall to protect them, the U.S. auto firms should be encouraged to partner with the leading firms — even if those firms are Chinese — to build joint ventures in the American heartland, so that they and the American people can participate in the EV shift.
But the core of real climate realism for the United States is not about new factories. It’s about playing to our strengths. The United States has the best finance and technology sectors in the world, and these should be used to help decarbonize at home and around the world. This climate realism agenda can come in left- and right-wing flavors. A leftist vision is likely state-led with designs, guides, and plans, while the right-wing vision relies on markets.
Take Texas. On May 7, 2020, the Texas grid set a record with 21.4 gigawatts of renewable electricity generation. Just five years later, that figure hit 41.9 gigawatts. Solar and batteries have exploded on the grid, with capacity hitting 30 gigawatts and 10 gigawatts respectively. They have grown so rapidly because of the state’s market-based system, with its low barriers to interconnection and competitive dynamics.
Of course, not every location is blessed with as much wind, sun, and open space as Texas. But there’s no reason why its market systems can’t be a template for other states and countries. This, too, is industrial policy — not just the factory workers building the technologies or even the installers deploying them. There is lots of work for the lawyers and power systems engineers and advertisers and policy analysts and bankers and consultants, as well.
Yet instead of seizing these real chances to push climate action forward at home and abroad, the Trump administration is eviscerating American state capacity, the rule of law, and global trust in the government. The whipsawing of Trump’s tariffs generates uncertainty that undercuts investment. The destruction of government support for scientific exploration hits at the next-generation moonshots that Sivaram is so enamored of, as well as the institutions that educate our citizens and train our workforce. Trump’s blatant disregard for court orders and his regime’s cronyism undercut belief in the rule of law, and that investments will rise and fall based on their economics rather than how close they are to the President.
But it’s not just Trump. Texas legislators are on the verge of destroying the golden goose of cheap electricity through rapid renewables deployment out of a desire to own the libs. Despite the huge economic returns to rural communities that have seen so much utility-scale expansion in the state, some Republican legislators are pushing bills that would stick their fingers into the electricity market pie, undercutting the renewable expansion and mandating expensive gas expansion.
The Trump business coalition, which was mostly vibes in the first place, is fracturing. There are conflicting interests between those who want to fight inflation and those who see low oil prices as a problem. Pushing down oil prices by pressuring OPEC+ to pump more crude and depressing global economic outlooks with the trade war (Degrowth Donald!) has hurt the frackers in Texas. Ironically, one way to lower their costs is to electrify operations, so they don’t have to rely on expensive diesel.
Climate change is here, but so is Donald Trump. Ignoring either one is a recipe for disaster as they both create destructive whirlwinds and traffic in uncertainty. The real solution to both is mitigation — doing everything possible today to stop as much of the damage as possible before it happens.