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Inside Climeworks’ big experiment to wrest carbon from the air

In the spring of 2021, the world’s leading authority on energy published a “roadmap” for preventing the most catastrophic climate change scenarios. One of its conclusions was particularly daunting. Getting energy-related emissions down to net zero by 2050, the International Energy Agency said, would require “huge leaps in innovation.”
Existing technologies would be mostly sufficient to carry us down the carbon curve over the next decade. But after that, nearly half of the remaining work would have to come from solutions that, for all intents and purposes, did not exist yet. Some would only require retooling existing industries, like developing electric long-haul trucks and carbon-free steel. But others would have to be built from almost nothing and brought to market in record time.
What will it take to rapidly develop new solutions, especially those that involve costly physical infrastructure and which have essentially no commercial value today?
That’s the challenge facing Climeworks, the Swiss company developing machines to wrest carbon dioxide molecules directly from the air. In September 2021, a few months after the IEA’s landmark report came out, Climeworks switched on its first commercial-scale “direct air capture” facility, a feat of engineering it dubbed “Orca,” in Iceland.
The technology behind Orca is one of the top candidates to clean up the carbon already blanketing the Earth. It could also be used to balance out any stubborn, residual sources of greenhouse gases in the future, such as from agriculture or air travel, providing the “net” in net-zero. If we manage to scale up technologies like Orca to the point where we remove more carbon than we release, we could even begin cooling the planet.
As the largest carbon removal plant operating in the world, Orca is either trivial or one of the most important climate projects built in the last decade, depending on how you look at it. It was designed to capture approximately 4,000 metric tons of carbon from the air per year, which, as one climate scientist, David Ho, put it, is the equivalent of rolling back the clock on just 3 seconds of global emissions. But the learnings gleaned from Orca could surpass any quantitative assessment of its impact. How well do these “direct air capture” machines work in the real world? How much does it really cost to run them? And can they get better?
The company — and its funders — are betting they can. Climeworks has made major deals with banks, insurers, and other companies trying to go green to eventually remove carbon from the atmosphere on their behalf. Last year, the company raised $650 million in equity that will “unlock the next phase of its growth,” scaling the technology “up to multi-million-ton capacity … as carbon removal becomes a trillion-dollar market.” And just last month, the U.S. Department of Energy selected Climeworks, along with another carbon removal company, Heirloom, to receive up to $600 million to build a direct air capture “hub” in Louisiana, with the goal of removing one million tons of carbon annually.
Two years after powering up Orca, Climeworks has yet to reveal how effective the technology has proven to be. But in extensive interviews, top executives painted a picture of innovation in progress.
Chief marketing officer Julie Gosalvez told me that Orca is small and climatically insignificant on purpose. The goal is not to make a dent in climate change — yet — but to maximize learning at minimal cost. “You want to learn when you're small, right?” Gosalvez said. “It’s really de-risking the technology. It’s not like Tesla doing EVs when we have been building cars for 70 years and the margin of learning and risk is much smaller. It’s completely new.”
From the ground, Orca looks sort of like a warehouse or a server farm with a massive air conditioning system out back. The plant consists of eight shipping container-sized boxes arranged in a U-shape around a central building, each one equipped with an array of fans. When the plant is running, which is more or less all the time, the fans suck air into the containers where it makes contact with a porous filter known as a “sorbent” which attracts CO2 molecules.

When the filters become totally saturated with CO2, the vents on the containers snap shut, and the containers are heated to more than 212 degrees Fahrenheit. This releases the CO2, which is then delivered through a pipe to a secondary process called “liquefaction,” where it is compressed into a liquid. Finally, the liquid CO2 is piped into basalt rock formations underground, where it slowly mineralizes into stone. The process requires a little bit of electricity and a lot of heat, all of which comes from a carbon-free source — a geothermal power plant nearby.
A day at Orca begins with the morning huddle. The total number on the team is often in flux, but it typically has a staff of about 15 people, Climeworks’ head of operations Benjamin Keusch told me. Ten work in a virtual control room 1,600 miles away in Zurich, taking turns monitoring the plant on a laptop and managing its operations remotely. The remainder work on site, taking orders from the control room, repairing equipment, and helping to run tests.
During the huddle, the team discusses any maintenance that needs to be done. If there’s an issue, the control room will shut down part of the plant while the on-site workers investigate. So far, they’ve dealt with snow piling up around the plant that had to be shoveled, broken and corroded equipment that had to be replaced, and sediment build-up that had to be removed.

The air is more humid and sulfurous at the site in Iceland than in Switzerland, where Climeworks had built an earlier, smaller-scale model, so the team is also learning how to optimize the technology for different weather. Within all this troubleshooting, there’s additional trade-offs to explore and lessons to learn. If a part keeps breaking, does it make more sense to plan to replace it periodically, or to redesign it? How do supply chain constraints play into that calculus?
The company is also performing tests regularly, said Keusch. For example, the team has tested new component designs at Orca that it now plans to incorporate into Climeworks’ next project from the start. (Last year, the company began construction on “Mammoth,” a new plant that will be nine times larger than Orca, on a neighboring site.) At a summit that Climeworks hosted in June, co-founder Jan Wurzbacher said the company believes that over the next decade, it will be able to make its direct air capture system twice as small and cut its energy consumption in half.
“In innovation lingo, the jargon is we haven’t converged on a dominant design,” Gregory Nemet, a professor at the University of Wisconsin who studies technological development, told me. For example, in the wind industry, turbines with three blades, upwind design, and a horizontal axis, are now standard. “There were lots of other experiments before that convergence happened in the late 1980s,” he said. “So that’s kind of where we are with direct air capture. There’s lots of different ways that are being tried right now, even within a company like Climeworks."
Although Climeworks was willing to tell me about the goings-on at Orca over the last two years, the company declined to share how much carbon it has captured or how much energy, on average, the process has used.
Gosalvez told me that the plant’s performance has improved month after month, and that more detailed information was shared with investors. But she was hesitant to make the data public, concerned that it could be misinterpreted, because tests and maintenance at Orca require the plant to shut down regularly.
“Expectations are not in line with the stage of the technology development we are at. People expect this to be turnkey,” she said. “What does success look like? Is it the absolute numbers, or the learnings and ability to scale?”
Danny Cullenward, a climate economist and consultant who has studied the integrity of various carbon removal methods, did not find the company’s reluctance to share data especially concerning. “For these earliest demonstration facilities, you might expect people to hit roadblocks or to have to shut the plant down for a couple of weeks, or do all sorts of things that are going to make it hard to transparently report the efficiency of your process, the number of tons you’re getting at different times,” he told me.
But he acknowledged that there was an inherent tension to the stance, because ultimately, Climeworks’ business model — and the technology’s effectiveness as a climate solution — depend entirely on the ability to make precise, transparent, carbon accounting claims.
Nemet was also of two minds about it. Carbon removal needs to go from almost nothing today to something like a billion tons of carbon removed per year in just three decades, he said. That’s a pace on the upper end of what’s been observed historically with other technologies, like solar panels. So it’s important to understand whether Climeworks’ tech has any chance of meeting the moment. Especially since the company faces competition from a number of others developing direct air capture technologies, like Heirloom and Occidental Petroleum, that may be able to do it cheaper, or faster.
However, Nemet was also sympathetic to the position the company was in. “It’s relatively incremental how these technologies develop,” he said. “I have heard this criticism that this is not a real technology because we haven’t built it at scale, so we shouldn’t depend on it. Or that one of these plants not doing the removal that it said it would do shows that it doesn’t work and that we therefore shouldn’t plan on having it available. To me, that’s a pretty high bar to cross with a climate mitigation technology that could be really useful.”
More data on Orca is coming. Climeworks recently announced that it will work with the company Puro.Earth to certify every ton of CO2 that it removes from the atmosphere and stores underground, in order to sell carbon credits based on this service. The credits will be listed on a public registry.
But even if Orca eventually runs at full capacity, Climeworks will never be able to sell 4,000 carbon credits per year from the plant. Gosalvez clarified that 4,000 tons is the amount of carbon the plant is designed to suck up annually, but the more important number is the amount of “net” carbon removal it can produce. “That might be the first bit of education you need to get out there,” she said, “because it really invites everyone to look at what are the key drivers to be paid attention to.”
She walked me through a chart that illustrated the various ways in which some of Orca’s potential to remove carbon can be lost. First, there’s the question of availability — how often does the plant have to shut down due to maintenance or power shortages? Climeworks aims to limit those losses to 10%. Next, there’s the recovery stage, where the CO2 is separated from the sorbent, purified, and liquified. Gosalvez said it’s basically impossible to do this without losing some CO2. At best, the company hopes to limit that to 5%.
Finally, the company also takes into account “gray emissions,” or the carbon footprint associated with the business, like the materials, the construction, and the eventual decommissioning of the plant and restoration of the site to its former state. If one of Climeworks’ plants ever uses energy from fossil fuels (which the company has said it does not plan to do) it would incorporate any emissions from that energy. Climeworks aims to limit gray emissions to 15%.
In the end, Orca’s net annual carbon removal capacity — the amount Climeworks can sell to customers — is really closer to 3,000 tons. Gosalvez hopes other carbon removal companies adopt the same approach. “Ultimately what counts is your net impact on the planet and the atmosphere,” she said.
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Despite being a first-of-its-kind demonstration plant — and an active research site — Orca is also a commercial project. In fact, Gosalvez told me that Orca’s entire estimated capacity for carbon removal, over the 12 years that the plant is expected to run, sold out shortly after it began operating. The company is now selling carbon removal services from its yet-to-be-built Mammoth plant.
In January, Climeworks announced that Orca had officially fulfilled orders from Microsoft, Stripe, and Shopify. Those companies have collectively asked Climeworks to remove more than 16,000 tons of carbon, according to the deal-tracking site cdr.fyi, but it’s unclear what portion of that was delivered. The achievement was verified by a third party, but the total amount removed was not made public.
Climeworks has also not disclosed how much it has charged companies per ton of carbon, a metric that will eventually be an important indicator of whether the technology can scale to a climate-relevant level. But it has provided rough estimates of how much it expects each ton of carbon removal to cost as the technology scales — expectations which seem to have shifted after two years of operating Orca.
In 2021, Climeworks co-founder Jan Wurzbacher said the company aimed to get the cost down to $200 to $300 per ton removed by the end of the decade, with steeper declines in subsequent years. But at the summit in June, he presented a new cost curve chart showing that the price was currently more than $1,000, and that by the end of the decade, it would fall to somewhere between $400 to $700. The range was so large because the cost of labor, energy, and storing the CO2 varied widely by location, he said. The company aims to get the price down to $100 to $300 per ton by 2050, when the technology has significantly matured.
Critics of carbon removal technologies often point to the vast sums flowing into direct air capture tech like Orca, which are unlikely to make a meaningful difference in climate change for decades to come. During a time when worsening disasters make action feel increasingly urgent, many are skeptical of the value of investing limited funds and political energy into these future solutions. Carbon removal won’t make much of a difference if the world doesn’t deploy the tools already available to reduce emissions as rapidly as possible — and there’s certainly not enough money or effort going into that yet.
But we’ll never have the option to fully halt climate change, let alone begin reversing it, if we don’t develop solutions like Orca. In September, the International Energy Agency released an update to its seminal net-zero report. The new analysis said that in the last two years, the world had, in fact, made significant progress on innovation. Now, some 65% of emission reductions after 2030 could be accounted for with technologies that had reached market uptake. It even included a line about the launch of Orca, noting that Climeworks’ direct air capture technology had moved from the prototype to the demonstration stage.
But it cautioned that DAC needs “to be scaled up dramatically to play the role envisaged,” in the net zero scenario. Climeworks’ experience with Orca offers a glimpse of how much work is yet to be done.
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For the first time in six years, House Democrats have put forward a climate platform.
Well, sort of. On Tuesday, a subset of nine House Democrats who are part of the Sustainable Energy and Environment Coalition published a menu of hundreds of policy proposals called the Thriving Economy Project. It’s a federal blueprint for the age of AI, surging energy demand, worsening natural disasters, and growing geopolitical uncertainty.
Kathy Castor, a representative from Florida who led the project, told me that instead of a platform, I should think of the project as “a workable plan for long term economic and job growth.”
“We’re not introducing a bill after this,” she said. “We’re providing it to policymakers in Washington for them to build the bipartisan support you need to get something across the finish line. The Trump administration is going to be there for two more years. What can we get done now that would have bipartisan support?”
Nevertheless, this is still the most sweeping environment and energy policy document Democrats have published since 2020, when the House Select Committee on the Climate Crisis — which Castor also chaired — published a nearly 550-page plan to “solve the climate crisis.” Much of that work became a part of the 2021 bipartisan infrastructure law and the 2022 Inflation Reduction Act. Of course, significant chunks of those laws, including tax credits for wind and solar projects, were later dismantled by the Trump administration in the One Big Beautiful Bill Act.
The Climate Crisis Committee disbanded in 2023, but the Thriving Economy Project is, in some ways, a continuation of its work. The document itself is the product of an independent nonprofit, which Democrats from the Sustainable Energy and Environment Coalition enlisted to probe experts, local leaders, companies, and advocates around the country for ideas about what Congress should do to create jobs, lower energy costs, foster innovation, and shore up communities. The nonprofit, known as the Sustainable Energy and Environment Coalition Institute, convened working groups, roundtables, and listening sessions. It also issued a public Request for Information that generated more than 1,300 policy recommendations from around 150 responders, including businesses and trade associations, local governments, nonprofits, and universities, the report said, and assembled a “20-person steering committee of ideologically diverse experts” to challenge its own assumptions.
The resulting report asserts that it is “not a consensus document, nor was it ever intended to be. It is a menu of ideas that have been challenged, refined, and improved by people approaching the same problems from very different perspectives.”
Perhaps that’s why the document reads a little bit like throwing spaghetti at the wall. There’s plenty in it that could conceivably be bipartisan, but there’s also a lot that stands no chance of passing under Trump, even if Democrats take the House and Senate in November’s midterm elections. In that light, it’s both a menu for the next two years and a window into how Democrats are generally thinking about climate policy in the post-IRA era. Here are five of my takeaways after going through it.
The authors do not spill any digital ink lamenting Trump’s dismantling of the IRA. They do, however, propose restoring a bunch of what’s been lost and building on the lessons learned from the brief time the policies were in effect.
For example, the report suggests reinstating federal tax credits for home energy efficiency improvements and residential clean energy systems such as rooftop solar, but recommends offering the credits as a point-of-sale rebate rather than a return claimed on the buyer’s taxes. That would be similar to the way electric vehicle buyers could transfer their tax credit to the dealer to get the discount on their purchase immediately. The goal, according to the report, is to “minimize the upfront costs and administrative frictions for consumer-facing incentives.”
Speaking of the electric vehicle tax credit, bringing it back is also on the menu, justified as a demand pull to support domestic supply chains and as a complement to the manufacturing tax credits, which largely survived the IRA purge (more on that below). Interestingly, a separate section of the report proposes a perhaps more politically palatable consumer rebate for new vehicles based on fuel efficiency rather than a strict EV-only subsidy, framing the idea as an option to address “unaffordable gasoline.”
There is a meaty section on extending and expanding the manufacturing tax credits, which, as you may remember, will no longer apply to wind turbine components after 2027, thanks to Trump’s One Big Beautiful Bill Act. The report suggests cancelling that early termination. It also proposes extending the subsidy to a long list of additional advanced energy technologies, including power transformers, industrial heat pumps, and long duration energy storage components. Additionally, there are several sections on improving federal support for early-stage technologies, helping them get through the “valley of death” to commercial deployment — a major theme in both the bipartisan infrastructure law and IRA.
Notably absent is any discussion of reinstating the tax credits for wind and solar generation. When I asked Castor about that, she said “a lot of that ground had been plowed already,” referring to the contentious battle over the credits during the OBBBA negotiations. “In this Congress, that’s not going to happen. This effort is driven by solving problems ASAP where we think there can be bipartisan support going forward.”
The report intentionally stays away from one of the most significant ways Congress could speed up solutions to address rising energy demand: permitting reform. A disclaimer at the top notes that since Congress was actively debating legislation on that issue while the report was being written, the authors chose not to tackle it directly.
It does, however, spend plenty of time working around the edges on ways to clear up clogged interconnection queues and fix bottlenecks to getting more transmission online. For one, it suggests more funding for the Department of Energy’s Transmission Facilitation Program, which allows the agency to temporarily serve as an anchor customer for new transmission lines. Creating a 30% investment tax credit for transmission lines is another idea in the report.
A lot of the recommendations revolve around improving grid planning and integrating grid-enhancing technologies, advanced conductors, and energy storage into the process. The report suggests establishing a national transmission conductor standard, for example, setting a minimum efficiency level for the wires strung along transmission lines to reduce waste.
Beyond transmission, there are a slew of ideas for reforming energy markets to better support demand response and virtual power plants. Congress could create federal guidance for how grid operators and state regulators assess the value of energy storage to the grid, and direct the DOE to provide more technical assistance to operators on incorporating flexible resources that can shift load, relieve congestion, and integrate more renewables into the grid.
One of the biggest challenges Democrats will have to contend with is writing policy that can endure past a change in party control. Trump has found myriad ways to block projects approved by the previous administration and withhold congressionally mandated funding. The courts are still deciding whether his administration’s methods are actually legal. Nonetheless, the report reflects an interest in creating more certainty for federal grantees and restoring trust in the federal government as a funding partner.
For one, it explicitly recommends that Congress restore awards that were legally obligated under IRA programs such as the Greenhouse Gas Reduction Fund, the Environmental and Climate Justice Block Grants, the Community Change Grants, and the Neighborhood Access and Equity Grants that the Trump administration has attempted to terminate — though it stops short of specifying how.
In the future, though, it recommends that federal funding be funneled through “trusted third-party fiscal intermediaries to allow for nimbler program management and structural insulation from political shifts.” Congress should also more narrowly define the circumstances under which an award can be terminated, it says, offering the suggested language: “funds awarded under [identified programs] may not be rescinded, reprogrammed, or deferred except by law.”
In cases where an administration does rescind or terminate funding, it recommends that Congress put in law that any legal challenge to the termination belongs in the U.S. District Courts. The Department of Justice is attempting to argue that the disputes over Trump’s grant terminations constitute breach of contract claims, and therefore belong in the court of federal claims. If the cases end up there, however, the grantees will only be able to sue for damages — they won’t be eligible to get their grants reinstated. A provision explicitly placing these cases in the district court would ensure awardees have a path to actually contributing to congressionally-mandated goals.
While these provisions are promising, however, it’s hard to imagine that Trump would sign off on them.
One of the most obvious differences between the world we live in now and the world lawmakers occupied in 2020 is that the race for artificial intelligence is in full swing, driving a surge in electricity demand the country has not seen in decades. Data centers have become the locus of a number of intersecting issues — permitting obstacles for energy infrastructure, rising electricity costs, local opposition to anything getting built at all, fear of AI, and concerns about cybersecurity.
The Thriving Economy Project treats data centers as a central organizing problem across several of its chapters. It offers policies to address environmental concerns such as requiring data centers to use closed-loop cooling systems to reduce water use. It proposes unifying the piecemeal approach states are taking to meet data center electricity demand under a federal standard that would require large loads to pay the full cost of connecting to the grid.
There’s a whole section on the challenges of meeting data centers’ power needs that contains more than two dozen policy ideas. A few that stand out include mandatory energy and water use disclosure requirements, a federal Energy Star-equivalent for AI tools, and the creation of a “U.S. Electron Accelerator.” That last idea is one of the most interesting proposals I came across. Data centers would pay into a fund for every kilowatt-hour of their demand not met with clean electrons generated at the same time and in the same location. The funds would then be available to help data centers cover the premium for procuring round-the-clock clean electricity from nuclear and geothermal plants.
Similarly, the report suggests requiring data centers to pay into a fund to support the Low Income Home Energy Assistance Program and the Weatherization Assistance Program, two perennially underfunded federal programs that help Americans who are struggling to pay their energy bills.
It also raises the concern that data centers powered by behind-the-meter natural gas plants will drive up the price of natural gas for other customers, thereby increasing home heating and residential electricity bills. The report suggests several ideas to reduce natural gas price volatility, including taxing oil and gas companies to create a “strategic energy affordability reserve.” If the president declares an “energy affordability emergency,” it says, the funds can be released to states to help residents pay their bills. Additionally, Congress could create an “energy price safety valve” to temporarily ban exports of key fuels when prices spike.
A lot of the Thriving Economy Project reads like a manual for playing defense in an increasingly dangerous world. It is consumed with addressing risk — the risk of cybersecurity attacks on our electric grid, water systems, and airports, and of global supply shocks that throttle domestic energy prices and supply chains. While discussion of “climate change” as a problem to tackle is notably absent from the report, a rhetorical shift I wrote more about here, adapting to the realities of a warming planet is one of its main preoccupations.
It suggests establishing a federal climate relocation program, for example, and setting federal climate-adapted transportation standards, such as elevation in flood zones and transit facility shading. There’s a recommendation to build a “national climate-health early warning system” to alert people about extreme heat, wildfire smoke, vector-borne diseases, and harmful algal blooms. Along those lines, it suggests that severe wildfire smoke events qualify for federal disaster assistance. At the same time, federal disaster assistance is too fragmented across various agencies, it says, and the government could establish a single, mobile-friendly app “as the front door to all federal individual disaster aid.”
It recommends creating an independent National Disaster Safety Board, an independent watchdog to investigate deaths and damages after a disaster and issue recommendations for how governments at all levels can prevent these losses the next time. Congress could also establish a national climate risk disclosure standard for the real estate industry, giving homebuyers access to more consistent, transparent data about property risks.
These are just a few of many dozens of proposals to improve federal leadership on this especially local, disjointed issue.
A new set of policy proposals from House illustrates a marked change in rhetoric since 2020.
Nine House Democrats from the Sustainable Energy and Environment Coalition published a sweeping federal policy blueprint on Tuesday called the Thriving Economy Project. While it is explicitly not a policy platform, it is the first window we’ve gotten into how lawmakers are thinking about their next set of climate moves in the post-One Big Beautiful Bill Act era.
The last time House Democrats published a major energy and environment policy document was in 2020, when the House Select Committee on the Climate Crisis released the aptly titled report “Solving the Climate Crisis.” The Thriving Economy Project covers many of the same themes as that 2020 platform — energy, agriculture, disaster recovery, innovation. It even contains some of the same policy proposals. But as the contrast in titles suggests, the approach is markedly different.
The 2026 version doesn’t call itself climate policy at all. Though it contains plenty of proposals to support cleaner energy and reduced emissions, it frames them in terms of affordability, economic opportunity, resilience, and competitiveness, rather than as a means to stop planetary warming. The words “climate change” aren’t entirely absent, but they appear primarily as the context for proposals to improve disaster preparedness, response, and recovery, or to adapt infrastructure to higher seas and hotter days.
This isn’t a huge shock. We’ve written quite a bit at Heatmap about how climate change advocacy is shifting away from talking about the crisis directly to messaging about the benefits of actions that just so happen to cut carbon or shore up communities against disasters. When I compared the number of times certain words and phrases appeared in the 2020 package versus this new one, the evidence of that rhetorical shift was decisive.
Mentions of “climate change” dropped from more than 500 to 22. Whereas the 2020 package cited the “climate crisis” more than 150 times, the new report casually references it in just four places. In 2020, Democrats framed their entire platform around hitting “net-zero” by 2050, citing the goal 139 times. Net-zero appears just once in the new package in a chapter about investing in innovation. According to the International Energy Agency’s “Net Zero Roadmap,” it says, about a third of the emissions reductions required to get there “will come from technologies still under development.”
While lawmakers took a stand six years ago to fight for “environmental justice,” that term is wholly absent from the new report. Instead of pushing for policies that improve outcomes for “communities of color,” a phrase which appears just five times in the Thriving Economy Project, it focuses on building “thriving communities” and improving outcomes for “low income” and “underserved” populations.
It’s easy to be cynical about the political calculation these rhetorical shifts reflect, but the two policy platforms were also written for different audiences. Florida Representative Kathy Castor, a Democrat who led the creation of both versions, told me that the goal of the Thriving Economy Project was to come up with policies that could be adopted in the next two years. “This effort is driven by solving problems ASAP where we think there can be bipartisan support,” she said. The 2020 document, by contrast, was a wishlist for a future Democrat-led Congress and administration. Much of what was in it later became part of the Infrastructure Investment and Jobs Act and the IRA, but has since been dismantled under Trump.
The increased frequency of certain other terms — such as “energy security,” “cybersecurity,” and “geopolitical” — is also a reminder that between the war over Ukraine, the war in Iran, and the AI race, a lot really has changed since 2020.
Just because the report is not explicitly about climate change doesn’t mean it’s not a climate policy document, however. When I asked Sean Casten, a Democratic representative from Illinois who also worked on the project, whether he considered the policies to be about addressing climate change, he responded that there was no way to talk about energy or home insurance and not talk about climate. “You also don’t necessarily have to use the word climate to talk about all of those things, right?” he added.
Under new rules, the United States will impose virtually no limits on greenhouse gas pollution from power plants.
This is an edition of Heatmap Daily, an evening review of the day’s news written by our executive editor. Sign up for it here.
Happy Monday. It’s going to be a big week. Let’s begin with the immediate news.
This afternoon, the Environmental Protection Agency formally rolled back limits on greenhouse gas pollution from existing power plants — and proposed scrapping the rest. If the proposal is finalized, then coal and natural gas power plant operators could soon release as much heat-trapping pollution as they want into the atmosphere. And thanks to other recent rollbacks, power plants can release more mercury, microscopic soot, and other hazardous air pollutants, too.
EPA Administrator Lee Zeldin made the announcement at a Group of 20 energy minister meeting in Houston.
On a legal basis, the agency is formalizing the change in two steps: First, it partially repealed some rules for power plant emissions; second, it filed a separate legal argument that the Clean Air Act “does not authorize the EPA to regulate emissions from power plants” to fight climate change. Both documents will likely go into effect later this year. Those documents were released as I wrote this newsletter, and we’re still digging through them at Heatmap.
But there are two broader ways, I think, to see this news.
The first is that it confirms America’s abdication of environmental leadership under the Trump administration. Global climate politics is now in a quite different situation than it was in, say, 2018, when the Trump administration last made similar deregulatory moves. China now operates the world’s largest carbon emissions trading system — and while that system targets an odd “intensity” measurement, and gives away many free allowances, it is expanding to other sectors of the economy and the country plans to adopt more conventional targets next year.
Which isn’t to say it’s perfect. I could find something important to criticize about China, Canada, and the European Union’s various carbon schemes. But they have policies at the national or supranational level, and the United States does not. While we still have a handful of state regional policies — such as the-cap and-trade market for Northeastern states — they have been transformed by the politics of inflation.
And things could still get worse. Earlier this year, the Trump administration repealed the EPA’s scientific finding that heat-trapping greenhouse gases can endanger the environment. If it successfully defends that move in court, then any future government will face extra hurdles when seeking to limit carbon pollution. And if the Trump administration secures the Supreme Court ruling it is obviously angling for — and gets the high court to overturn its landmark 2007 decision that said the EPA could regulate greenhouse gases in the first place — then a future Democratic administration might find itself virtually without tools to limit carbon emissions.
The second way of seeing this news, though, is that little has actually changed on the ground — and the biggest unanswered question in American climate policy remains unanswered. Since the Obama administration, the federal government has regulated carbon pollution from cars and trucks (though Trump has of course sought to put an end to those rules, too). But it has never found a way to limit power plant carbon emissions in a comprehensive way.
Instead, successive Democratic presidents, Trump administrations, and the Supreme Court have played a slow-motion, 12-year-long game of regulatory ping pong. In 2014, President Obama proposed a scheme to cut carbon emissions from power plants. Since then, the first Trump administration repealed those rules, the Supreme Court stayed them (and then eventually nixed them), and President Biden proposed a new and more narrow version of them — which the Trump administration has just repealed. And Trump wants to end the game forever by preventing the Clean Air Act from ever regulating carbon emissions.
Trump and his officials are acting irresponsibly by doing so — to say the least. But the truth is that Democratic presidents have never found an enduring way to regulate power plant carbon emissions that the Supreme Court has blessed. And doing so has only gotten harder as the court has marched right over the past decade.
We will keep diving into these new documents here at Heatmap. But we have already covered this story in depth over the past 18 months, too. Check out:
There is one more thing to look forward to this week, by the way. On Wednesday, the Federal Reserve will decide whether to raise interest rates. Investors now expect it to bump the federal funds rate by one-quarter of a percentage point, which will affect the investment climate for every part of the energy system — including renewables.
As my colleague Matt Zeitlin has written, interest rates dictate the economics of clean energy because most spending on renewables and other zero-carbon power plants happens at the front end, as capital expenditure. Spending on fossil fuel projects, on the other hand, is more spread out, because operators must purchase fuel over time.
One big question that the Fed will eventually need to confront: Is there any way to rein in above-trend inflation without reducing artificial intelligence spending?
We’ll be covering that story and more as the week develops. Thanks as always for reading.