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The world’s biggest, most functional city might also be the most pedestrian-friendly. That’s not a coincidence.
For cities that want to reduce the number of cars, bike lanes are a good place to start. They are cheap, usually city-level authorities can introduce them, and they do not require you to raise taxes on people who own cars. What if you want to do something more radical though? What would a city that genuinely wanted to get the car out of its citizens’ lives in a much bigger way do? A city that wanted to make it possible for most people to live decent lives and be able to get around without needing a car, even without needing to get on a bicycle?
There is only one city on Earth I have ever visited that has truly managed this. But it happens to be the biggest city on the planet: Tokyo, the capital of Japan.
In popular imagination, at least in the West, Tokyo is both incredibly futuristic, and also rather foreign and confusing. Before I first visited, in 2017, I imagined it to be an incredibly hectic place, a noisy, bustling megacity. I was on holiday and trying to escape Nairobi, the rather sprawling, low-height, and green city I was living in at the time, and I picked Tokyo largely because I wanted to get as far away from Africa as I could. I needed a break from the traffic jams, the power cuts, the constant negotiation to achieve anything, and the heat. I was looking for an escape somewhere as different as I could think of, and I wanted to ride trains around and look at high-tech skyscrapers and not worry about getting splattered by mud walking in the street. I was expecting to feel bowled over by the height of the buildings, the sheer crush of people, and the noise.
Yet when I emerged from the train station in Shibuya, blinking jetlagged in the morning light after a night flight from Amsterdam, what actually caught me off guard was not the bustle but rather how quiet the city is. When you see cliched images of Tokyo, what invariably is shown are the enormous crowds of pedestrians crossing the roads, or Mount Fuji in the background of the futuristic skyline. I expected something like Los Angeles in Blade Runner, I suppose — futuristic and overwhelming. From photos, Tokyo can look almost unplanned, with neon signs everywhere and a huge variety of forms of architecture. You expect it to feel messy. What I experienced, however, was a city that felt almost like being in a futuristic village. It is utterly calm, in a way that is actually rather strange.
And it took me a little while to realize why. There is simply no traffic noise. No hooting, no engine noise, not even much of the noise of cars accelerating on tarmac. Because there are so few of them. Most of the time you can walk in the middle of the street, so rare is the traffic. There are not even cars parked at the side of the road. That is not true of all of Tokyo, of course. The expressways are often packed. Occasionally, I was told, particularly when it snows, or during holidays when large numbers of people try to drive out to the countryside, jams form that can trap drivers for whole days. But on most residential streets, traffic is almost nonexistent. Even the relatively few cars that you do see are invariably tiny, quiet vehicles.
Among rich cities, Tokyo has the lowest car use in the world. According to Deloitte, a management consultancy, just 12 percent of journeys are completed by private car. It might surprise you to hear that cycling is actually more popular than driving in Tokyo — it accounts for 17 percent of journeys, though the Japanese do not make as much of a big deal out of it as the Dutch do. But walking and public transport dwarf both sorts of vehicles. Tokyo has the most-used public transport system in the world, with 30 million people commuting by train each day. This may sound rather unpleasant. You have probably seen footage of the most crowded routes at rush hour, when staff literally push people onto the carriages to make space, or read about young women being groped in the crush. It happens, but it is not typical. Most of the trains I rode were busy but comfortable, and I was able to get a seat.
And what makes Tokyo remarkable is that the city was almost entirely built after the original city was mostly flattened by American bombers in the Second World War. Elsewhere in the world, cities built after the war are almost invariably car-dependent. Think of Houston, Texas, which has grown from 300,000 people in the 1950s to 10 times that now. Or England’s tiny version, Milton Keynes, which is the fastest-growing city in the country. Or almost any developing world city. Since the advent of the automobile, architects and urban planners worldwide have found it almost impossible to resist building cities around roads and an assumption that most people will drive. Tokyo somehow managed not to. It rebuilt in a much more human-centric way.
It may come as a surprise that Japan is home to the world’s biggest relatively car-free city. After all, Japan is the country that gave the world Mitsubishi, Toyota, and Nissan, and exports vehicles all over the world. And in fairness, a lot of Japanese people do own cars. Overall car ownership in Japan is about 590 vehicles per 1,000 people, which is less than America’s rate of about 800 per 1,000, but comparable to a lot of European countries. On average, there are 1.06 cars per household. But Tokyo is a big exception. In Tokyo, there are only 0.32 cars per household. Most Japanese car owners live in smaller towns and cities than the capital. The highest rate of car ownership, for example, is in Fukui Prefecture, on the western coast of Honshu, one of Japan’s least densely populated areas.
And car ownership in Japan is falling, unlike almost everywhere else on Earth. Part of the reason is just that the country is getting older and the population is falling. But it is also that more and more people live in Tokyo. Annually, Japan is losing about 0.3 percent of its population, or about half a million people a year. Greater Tokyo, however, with its population of 37 million, is shrinking by less than that, or about 0.1 percent a year. And the prefecture of Tokyo proper, with a population of 14 million, is still growing. The reason is that Tokyo generates the best jobs in Japan, and it is also an increasingly pleasant place to live. You may think of Tokyoites as being crammed into tiny apartments, but in fact, the average home in Tokyo has 65.9 square meters of livable floor space (709 square feet). That is still very small—indeed, it is less than the size of the average home in London, where the figure is 80 square meters. But the typical household in London has 2.7 people living in it. In Tokyo, it is 1.95. So per capita, people in Tokyo actually have more space than Londoners.
Overall in fact, people in Tokyo have one of the highest qualities of life in the world. A 2015 survey by Monocle magazine came to the conclusion that Tokyo is the best city on Earth in which to live, “due to its defining paradox of heart-stopping size and concurrent feeling of peace and quiet.” In 2021 The Economist ranked it fourth, after Wellington and Auckland in New Zealand, and another Japanese city, Osaka. Life expectancy overall is 84 years old, one of the highest levels of any city on the planet. A good part of this has to do with the lack of cars. Air pollution is considerably lower than in any other city of equivalent size anywhere in the world. Typical commutes are, admittedly, often fairly long, at 40 minutes each way. But they are not in awful smoggy car traffic.
This article was excerpted from Daniel Knowles' book "Carmageddon: How Cars Make Life Worse and What to Do About It"Abrams Press ©2023
So how has Tokyo managed it? Andre Sorensen, a professor of urban planning at the University of Toronto, who published a history of urban planning in Japan, told me that Japan’s history has a lot to do with it. Japan’s urbanization happened a little more like some poorer countries — quickly. At the start of the 20th century, just 15 percent of Japanese people lived in cities. Now 91 percent do, one of the highest rates of urbanization in the entire world. That rapid growth meant that Tokyo’s postwar growth was relatively chaotic. Buildings sprawled out into rice paddies, with sewage connections and power often only coming later. Electricity is still often delivered by overhead wires, not underground cables. And yet somehow this haphazard system manages to produce a relatively coherent city, and one that is much easier to get around on foot or by public transport than by car.
Part of the reason, Sorensen explained to me, is just historical chance. Japanese street layouts traditionally were narrow, much like medieval alleys in Europe. Land ownership was often very fragmented, meaning that house builders had to learn to use small plots in a way that almost never happened in Europe or America. And unlike the governments there, the government in postwar Japan was much more concerned with boosting economic growth by creating power plants and industrial yards than it was with creating huge new boulevards through neighborhoods. So the layouts never changed. According to Sorensen’s research, 35 percent of Japanese streets are not actually wide enough for a car to travel down them. More remarkably still, 86 percent are not wide enough for a car to be able to stop without blocking the traffic behind it.
Yet the much bigger reason for Tokyo’s high quality of life is that Japan does not subsidize car ownership in the way other countries do. In fact, owning a car in Tokyo is rather difficult. For one thing, cars are far more enthusiastically inspected than in America or most of Europe. Cars must be checked by officials every two years to ensure that they are still compliant, and have not been modified. That is true in Britain too, but the cost is higher than what a Ministry of Transport test costs. Even a well-maintained car can cost 100,000 yen to inspect (or around $850). On cars that are older than 10 years, the fees escalate dramatically, which helps to explain why so many Japanese sell their cars relatively quickly, and so many of them end up in East Africa or Southeast Asia. On top of that there is an annual automobile tax of up to 50,000 yen, as well as a 5 percent tax on the purchase. And then gasoline is taxed too, meaning it costs around 160 yen per liter, or about $6 a gallon, less than in much of Europe, but more than Americans accept.
And even if you are willing to pay all of the taxes, you cannot simply go and buy a car in the way that you might in most countries. To be allowed to purchase a car, you have to be able to prove that you have somewhere to park it. This approval is issued by the local police, and is known as a shako shomeisho, or “garage certificate.” Without one, you cannot buy a car. This helps to explain why the Japanese buy so many tiny cars, like the so-called Kei cars. It means they can have smaller garages. Even if the law didn’t exist though, owning a car in Japan without having a dedicated parking space for it would be a nightmare. Under a nationwide law passed in 1957, overnight street parking of any sort is completely illegal. So if you were to somehow buy a car with no place to store it, you could not simply park it on the street, because it would get towed the next morning, and you would get fined 200,000 yen (around $1,700). In fact, most street parking of any sort is illegal. There are a few exceptions, but more than 95 percent of Japanese streets have no street parking at all, even during the day.
This, rather than any beautiful architecture, explains why Tokyo’s streets feel so pleasant to walk down, or indeed to look at. There are no cars filling them up. It also means that land is actually valued properly. If you want to own a car, it means that you also have to own (or at least rent) the requisite land to keep it. In rural areas or smaller towns, this is not a huge deal, because land is relatively cheap, and so a permit might only cost 8,000 to 9,000 yen, or about $75 a month. But in Tokyo, the cost will be at least four times that. Garages in American cities can cost that much too, but in Japan there is no cheap street parking option, as in much of New York or Chicago. Most apartment buildings are constructed without any parking at all, because the developers can use the space more efficiently for housing. Only around 42 percent of condominium buildings have parking spaces for residents. Similarly, even if you own a parking space, it is almost never free to park anywhere you might take your car. Parking in Tokyo typically costs 1,000 yen an hour, or around $8.50.
This is a big disincentive to driving. Sorensen told me that when he lived in Tokyo, some wealthy friends of his owned a top-end BMW, which they replaced every few years, because they were car nuts. But because they did not have anywhere to park it near their home, if they wanted to use it, they had to take public transport (or a taxi) to get to it at its garage. As a result, they simply did not use their car very much. In their day-to- day life, they used the trains, the same as everybody else, or took taxis, because that was cheaper than picking up the car. This sort of thing probably helps to explain why the Japanese, despite relatively high levels of car ownership, do not actually drive very far. Car owners in Japan typically drive around 6,000 kilometers per year. That is about half what the average British car owner drives, and less than a third of what the average American does.
Parking rules are not, however, the limit of what keeps cars out of Tokyo. Arguably, an even bigger reason is how infrastructure has been funded in Japan. That is, by the market, rather than directly by taxes. In the 1950s and ’60s, much like Europe and the United States, Japan began building expressways. But unlike in Europe and America, it was starting from a considerably more difficult place. In 1957, Ralph J. Watkins, an American economist who had been invited to advise the Japanese government, reported that “the roads of Japan are incredibly bad. No other industrial nation has so completely neglected its highway system.” Just 23 percent of roads were paved, including just two-thirds of the only highway linking Osaka, Japan’s historical economic hub, to Tokyo.
But unlike America, the idea of making them free never seemed to cross politicians’ minds, probably because Japan in the postwar era was not the world’s richest country. Capital was not freely available. To build the roads, the national government formed corporations such as the Shuto Kōsoku-dōro Kabushiki-gaisha, or Metropolitan Expressway Company, which was formed in greater Tokyo in 1959. These corporations took out vast amounts of debt, which they had to repay, so that the Japanese taxpayer would not be burdened. That meant that tolls were imposed from the very beginning. The tolls had to cover not just the construction cost, but also maintenance and interest on the loans. Today, to drive on the Shuto Expressway costs from 300 to 1,320 yen, or $2.50 to $11 for a “standard-size” automobile. Overall, tolls in Japan are the most expensive in the world — around three times higher than the level charged on the private autoroutes in France, or on average, about 3,000 yen per 100 kilometers ($22 to drive 62 miles).
What that meant was that, from the beginning, roads did not have an unfair advantage in their competition with other forms of transport. And so in Japan, unlike in almost the entire rest of the rich world, the postwar era saw the construction of enormous amounts of rail infrastructure. Indeed, at a time when America and Britain were nationalizing and cutting their railways to cope with falling demand for train travel, in Japan, the national railway company was pouring investment into the system. The world’s first high-speed railway, the Tokaido Shinkansen, was opened in 1964 to coincide with the Tokyo Olympics, with a top speed of 210 kilometers per hour. That was almost double what trains elsewhere mostly managed. From 1964 to 1999, the number of passengers using the Shinkansen grew from 11 million annually to more than 300 million.
Sorensen told me about how in the 1950s and ’60s, the trains were a huge point of national pride for the Japanese government, a bit like car industries were elsewhere. “And justifiably! It was a fantastic invention. To say we can make electric rail go twice as fast. What an achievement.” Thanks to that, the railways ministry became a huge power center in government, rather than a neglected backwater as it often had become elsewhere. In rail, the Japanese “built up expertise in engineering, in bureaucratic resources and capacities, and political clout that just lasted,” he told me. “Whereas the road-building sector was weak.” Elsewhere, building roads became a self-reinforcing process, because as more was poured into constructing them, more people bought cars and demanded more roads. That did not happen in Japan. Instead, the growth in railway infrastructure led to growth in, well, more railway infrastructure.
If you visit Tokyo now, what you will find is that the most hectic, crowded places in the city are all around the train and subway stations. The reason is that Japan’s railway companies (the national firm was privatized in the 1980s) do not only provide railways. They are also big real estate investors. A bit like the firm that built the Metropolitan Railway in the 1930s in Britain, when Japan’s railway firms expanded service, they paid for it by building on the land around the stations. In practice, what that means is that they built lots of apartments, department stores, and supermarkets near (and directly above) railway stations, so that people can get straight off the train and get home quickly. That makes the trains more efficient, because people can get where they need to go without having to walk or travel to and from stations especially far. But it also means that the railways are incredibly profitable, because unlike in the West, they are able to profit from the improvement in land value that they create.
What this adds up to is that Tokyo is one of very few cities on Earth where travel by car is not actively subsidized, and funnily neither is public transport, and yet both work well, when appropriate. However, Tokyo is not completely alone. Several big cities across Asia have managed to avoid the catastrophe (cartastrophe?) that befell much of the western world. Hong Kong manages it nearly as well as Tokyo; there are just 76 cars per 1,000 people in the city state. So too does Singapore, with around 120 per 1,000 people. What those cities have in common, which makes them rather different from Japan, is a shortage of land and a relentless, centralized leadership that recognized early on that cars were a waste of space.
Unfortunately, replicating the Asian model in countries in Europe, America, or Australia from scratch will not be easy. We are starting with so many cars on our roads to begin with, that imposing the sorts of curbs on car ownership that I listed above is almost certainly a political nonstarter. Just look at what happens when politicians in America or Britain try to take away even a modest amount of street parking, or increase the tax on gasoline. People are already invested in cars, sadly. And thanks to that, there is also a chicken-and-egg problem. Because people are invested in cars, they live in places where the sort of public transport that makes life possible for the majority of people in Tokyo is simply not realistic. As it is, constructing rail infrastructure like Japan’s is an extraordinarily difficult task. Look at the difficulties encountered in things like building Britain’s new high-speed train link, or California’s, for example.
And yet it is worth paying attention to Tokyo precisely because it shows that vast numbers of cars are not necessary to daily life. What Tokyo shows is that it is possible for enormous cities to work rather well without being overloaded by traffic congestion. Actually, Tokyo works better than big cities anywhere else. That is why it has managed to grow so large. The trend all over the world for decades now has been toward greater wealth concentrating in the biggest metropolises. The cost of living in somewhere like New York, London, or Paris used to be marginally higher than living in a more modest city. That is no longer the case. And it reflects the fact that the benefits of living in big cities are enormous. The jobs are better, but so too are the restaurants, the cultural activities, the dating opportunities, and almost anything else you can think of. People are willing to pay for it. The high cost of living is a price signal — that is, the fact that people are willing to pay it is an indicator of the value they put on it.
Especially in this post-pandemic era where many jobs can be done from anywhere, lots of New Yorkers could easily decamp to, say, a pretty village upstate, and save a fortune in rent, or cash in on their property values. Actually, hundreds of thousands do every year (well, not only to upstate). But they are replaced by newcomers for the simple reason that New York City is, if you set aside the cost, a pretty great place to live. And yet, if everyone who would like to live in a big city is to be able to, those cities need to be able to grow more. But if they continue to grow with the assumption that the car will be the default way of getting around for a significant proportion of residents, then they will be strangled by congestion long before they ever reach anything like Tokyo’s success. People often say that London or New York are too crowded, but they are wrong. They are only too crowded if you think that it is normal for people to need space not just for them but also for the two tons of metal that they use to get around.
The sheer anger of motorists might mean that banning overnight parking on residential streets proves difficult. But if we want to be bold, some of Tokyo’s other measures are more realistic. We could, for example, do a lot more to build more housing around public transport, and use the money generated to help contribute to the network. According to the Centre for Cities, a British think tank, there are 47,000 hectares of undeveloped land (mostly farmland) within a 10-minute walk of a railway station close to London or another big city. That is enough space to build two million homes, more than half of which would be within a 45-minute commute to or from London. The reason we do not develop the land at the moment is because it is mostly Metropolitan Green Belt, a zoning restriction created in the late 1940s by the Town and Country Planning Act intended to contain cities and stop them sprawling outward. But the problem with it as it works in Britain at the moment is that it does not stop sprawl — it just pushes it further away from cities, into places where there really is no hope of not using a car.
Developing the green belt too would not be popular. People have an affection for fields near their homes, and they do not necessarily want the trains they use to be even more crowded. But there are projects that show it is possible to overcome NIMBYism. In Los Angeles in 2016, voters approved the Transit Oriented Communities Incentive Program, which creates special zoning laws in areas half a mile from a major transit stop (typically, in L.A., a light rail station). This being Los Angeles, it is fairly modest. One of the rules is that the mandatory parking minimums applied are restricted to a maximum of 0.5 car parking spaces per bedroom, and total parking is not meant to exceed more than one space per apartment, which is still rather a lot of parking. But nonetheless, it does allow developers to increase the density of homes near public transport, and it has encouraged developers to build around 20,000 new homes near public transport that probably would not have been constructed otherwise. These are small but real improvements.
Ultimately, no city will be transformed into Tokyo overnight, nor should any be, at least unless a majority of the population decides that they would like it. I am trying to persuade them; for now, not everyone is as enamored with the Japanese capital as I am. But NIMBYism and other political problems can be gradually overturned, if the arguments are made in the right way, even in the most automotive cities.
This article was excerpted from Daniel Knowles’ book Carmageddon: How Cars Make Life Worse and What to Do About It, published by Abrams Press ©2023.
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On power plant emissions, Fervo, and a UK nuclear plant
Current conditions: A week into Atlantic hurricane season, development in the basin looks “unfavorable through June” • Canadian wildfires have already burned more land than the annual average, at over 3.1 million hectares so far• Rescue efforts resumed Wednesday in the search for a school bus swept away by flash floods in the Eastern Cape province of South Africa.
EPA
The Environmental Protection Agency plans to announce on Wednesday the rollback of two major Biden-era power plant regulations, administration insiders told Bloomberg and Politico. The EPA will reportedly argue that the prior administration’s rules curbing carbon dioxide emissions at coal and gas plants were misplaced because the emissions “do not contribute significantly to dangerous pollution,” per The Guardian, despite research showing that the U.S. power sector has contributed 5% of all planet-warming pollution since 1990. The government will also reportedly argue that the carbon capture technology proposed by the prior administration to curb CO2 emissions at power plants is unproven and costly.
Similarly, the administration plans to soften limits on mercury emissions, which are released by burning coal, arguing that the Biden administration “improperly targeted coal-fire power plants” when it strengthened existing regulations in 2024. Per a document reviewed by The New York Times, the EPA’s proposal will “loosen emissions limits for toxic substances such as lead, nickel, and arsenic by 67%,” and for mercury at some coal power plants by as much as 70%. “Reversing these protections will take lives, drive up costs, and worsen the climate crisis,” Climate Action Campaign Director Margie Alt said in a statement. “Instead of protecting American families, [President] Trump and [EPA Administrator Lee] Zeldin are turning their backs on science and the public to side with big polluters.”
Fervo Energy announced Wednesday morning that it has secured $206 million in financing for its 400-megawatt Cape Station geothermal project in southwest Utah. The bulk of the new funding, $100 million, comes from the Breakthrough Energy Catalyst program.
Fervo’s announcement follows on the heels of the company’s Tuesday announcement that it had drilled its hottest and deepest well yet — at 15,000 feet and 500 degrees Fahrenheit — in just 16 days. As my colleague Katie Brigham reports, Fervo’s progress represents “an all too rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.” Read her full report on the clean energy startup’s news here.
The United Kingdom said Tuesday that it will move forward with plans to construct a $19 billion nuclear power station in southwest England. Sizewell C, planned for coastal Suffolk, is expected to create 10,000 jobs and power 6 million homes, The New York Times reports. Sizewell would be only the second nuclear power plant to be built in the UK in over two decades; the country generates approximately 14% of its total electricity supply through nuclear energy. Critics, however, have pointed unfavorably to the other nuclear plant under construction in the UK, Hinkley Point C, which has experienced multiple delays and escalating costs throughout its development. “For those who have followed Sizewell’s progress over the years, there was a glaring omission in the announcement,” one columnist wrote for The Guardian. “What will consumers pay for Sizewell’s electricity? Will it still be substantially cheaper in real terms than the juice that will be generated at Hinkley Point C in Somerset?” The UK additionally announced this week that it has chosen Rolls-Royce as the “preferred bidder” to build the country’s first three small modular nuclear reactors.
The European Union on Tuesday proposed a ban on transactions with Nord Stream 1 and 2 as part of a new package of sanctions aimed at Russia, Bloomberg reports. “We want peace for Ukraine,” the president of the European Commission, Ursula von der Leyen, said at a news conference in Brussels. “Therefore, we are ramping up pressure on Russia, because strength is the only language that Russia will understand.” The package would also lower the price cap on Russian oil to $45 a barrel, down from $60 a barrel, von der Leyen said, as well as crack down on Moscow’s “shadow fleet” of vessels used to transport sanctioned products like crude oil. The EU’s 27 member states need to unanimously agree to the package for it to be adopted; their next meeting is on June 23.
The world’s oceans hit their second-highest temperature ever in May, according to the European Union’s Earth observation program Copernicus. The average sea surface temperature for the month was 20.79 degrees Celsius, just 0.14 degrees below May 2024’s record. Last year’s marine heat had been partly driven by El Niño in the Pacific, so the fact that the oceans remain warm in 2025 is alarming, Copernicus senior scientist Julien Nicolas told the Financial Times. “As sea surface temperatures rise, the ocean’s capacity to absorb carbon diminishes, potentially accelerating the build-up of greenhouse gases in the atmosphere and intensifying future climate warming,” he said. In some areas around the UK and Ireland, the sea surface temperature is as high as 4 degrees Celsius above average.
Image: Todd Cravens/Unsplash
The Pacific Island nation of Tonga is poised to become the first country to recognize whales as legal persons — including by appointing them (human) representatives in court. “The time has come to recognize whales not merely as resources but as sentient beings with inherent rights,” Tongan Princess Angelika Lātūfuipeka Tukuʻaho said in comments delivered ahead of the U.N. Ocean Conference in Nice, France.
Microsoft, Amazon, Google, and the rest only have so much political capital to spend.
When Donald Trump first became a serious Presidential candidate in 2015, many big tech leaders sounded the alarm. When the U.S. threatened to exit the Paris Agreement for the first time, companies including Google, Microsoft, Apple, and Facebook (now Meta) took out full page ads in The New York Times and The Wall Street Journal urging Trump to stay in. He didn’t — and Elon Musk, in particular, was incensed.
But by the time specific climate legislation — namely the Inflation Reduction Act — was up for debate in 2022, these companies had largely clammed up. When Trump exited Paris once more, the response was markedly muted.
Now that the IRA’s tax credits face clear and present threats, this same story is playing out again. As the Senate makes its changes to the House’s proposed budget bill, tech giants such as Microsoft, Google, Meta, and Amazon are keeping quiet, at least publicly, about their lobbying efforts. Most did not respond to my request for an interview or a statement clarifying their position, except to say they had “nothing to share on this topic,” as Microsoft did.
That’s not to say they have no opinion about the fate of clean energy tax credits. Microsoft, Google, Meta, and Amazon have all voluntarily set ambitious net-zero emissions targets that they’re struggling to meet, largely due to booming data center electricity demand. They’re some of the biggest buyers of solar and wind energy, and are investing heavily in nuclear and geothermal. (On Wednesday morning, Pennsylvania’s Talen Energy announced an expanded power purchase agreement with Amazon, for nearly 2 gigawatts of power through 2042.) All of these energy sources are a whole lot more accessible with tax credits than without.
There’s little doubt the tech companies would prefer an abundant supply of cheap, clean energy. Exactly how much they’re willing to fight for it is the real question.
The answer may come down to priorities. “It’s hard to overstate how much this race for AI has just completely changed the business models and the way that these big tech companies are thinking about investment,” Jeff Navin, co-founder of the climate-focused government affairs firm Boundary Stone Partners, told me. “While they’re obviously going to be impacted by the price of energy, I think they’re even more interested and concerned about how quickly they can get energy built so that they can build these data centers.”
The tech industry has shown much more reluctance to stand up to Trump, period, this time around. As the president has moved from a political outsider to the central figure in the Republican party, hyperscalers have increasingly curried his favor as they advocate against actions that could pose an existential risk to their business — think tighter regulations on the tech sector or AI, or tariffs on key supplies made in Asia.
As Navin put it to me, “When you have a president who has very strong opinions on wind turbines and randomly throws companies’ names in tweets in the middle of the night, do you really want to stick your neck out and take on something that the president views as unpopular if you’ve got other business in front of him that could be more impactful for your bottom line?”
It is undeniably true that the AI-driven data center boom is pushing these companies to look for new sources of clean power. Last week Meta signed a major nuclear deal with Constellation Energy. Microsoft is also partnering with Constellation to reopen Three Mile Island, while Google and Amazon have both announced investments in companies developing small modular reactors. Meta, Google, and Microsoft are also investing in next-generation geothermal energy startups.
But while the companies are eager to tout these partnerships, Navin suspects most of their energy lobbying is now being directed towards efforts such as permitting reform and building out transmission infrastructure. Publicly available lobbying records confirm that these are indeed focus areas, as they’re critical to bringing data centers online quickly, regardless of how they’re powered and whether that power is subsidized. “They’re not going to stop construction on an energy project that has access to electricity just because that electricity is marginally more expensive,” Navin told me. “There’s just too much at stake.”
Tech companies have lobbied on numerous budget, tax, sustainability, and clean energy issues thus far this year. Amazon’s lobbying report is the only one to specifically call out efforts on “renewable energy tax credits,” while Meta cites “renewable energy policy” and Microsoft name-drops the IRA. But there’s no hard and fast standard for how companies describe the issues they’re lobbying on or what they’re looking to achieve. And perhaps most importantly, the reports don’t disclose how much money they allot to each issue, which would illuminate their priorities.
Lobbying can also happen indirectly, via industry groups such as the Clean Energy Buyers Association and the Data Center Coalition. Both have been vocal advocates for preserving the tax credits. The Wall Street Journal recently detailed a lobbying push by the latter — which counts Microsoft, Amazon, Meta, and Google among its most prominent members — that involved meetings with about 30 Republican senators and a letter to Senate Majority Leader John Thune.
DCC didn’t respond to my request for an interview. But CEBA CEO Rich Powell told me, “If we take away these incentives right now, just as we’re getting the rust off the gears and getting back into growth mode for the electricity economy, we’re really concerned about price spikes.”
The leader of another industry group, Advanced Energy United, shared Powell’s concern that passing the bill would mean higher electricity prices. Taking away clean energy incentives would ”fundamentally undercut the financing structure for — let’s be frank — the vast majority of projects in the interconnection queue today,” Harry Godfrey, the managing director of AEU, told me.
Being part of an industry association is by no means a guarantee of political alignment on every issue. Microsoft, Google, Meta, and Amazon are also members of the U.S. Chamber of Commerce — by far the largest lobbying group in the U.S. — which has a long history of opposing climate action and the IRA itself. Apple even left the Chamber in 2009 due to its climate policy stances.
But Powell and Godfrey implied that the tech giants' views are — or at least ought to be — in alignment with theirs. “Many of our members are lobbying independently. Many of them are lobbying alongside us. And then many of them are supporting CEBA to go and lobby on this,” Powell told me, though he wouldn’t reveal what actions any specific hyperscalers were taking.
Godfrey said that AEU’s positions are “certainly reflective of what large energy consumers, notably tech companies, have been working to pursue across a variety of technologies and with applicability to a couple of different types of credits.”
And yet hyperscalers may have already spent a good deal of their political capital fighting for a niche provision in the House’s version of the budget bill, which bans state-level AI regulation for a decade. That would make the AI boom infinitely easier for tech companies, who don’t want to deal with a patchwork of varying regulations, or really most regulations at all.
On top of everything else, big tech in particular is dealing with government-led anti-trust lawsuits, both at home and abroad. Google recently lost two major cases to the Department of Justice, related to its search and advertising business. A final decision is pending regarding the Federal Trade Commission’s antitrust lawsuit against Meta, regarding the company’s acquisition of Instagram and WhatsApp. Not to be outdone, Amazon will also be fighting an antitrust case brought by the FTC next year.
As these companies work to convince the public, politicians, and the courts that they’re not monopolistic rule-breakers, and that AI is a benevolent technology that the U.S. must develop before China, they certainly seem to be relinquishing the clean energy mantle they once sought to carry, at least rhetorically. We’ll know more once all these data centers come online. But if the present is any indication, speed, not green electrons, is the North Star.
Editor’s note: This story has been updated to reflect Amazon’s power purchase agreement with Talen Energy.
The new funding comes as tax credits for geothermal hang in the balance.
The good news is pouring in for the next-generation geothermal developer Fervo Energy. On Tuesday the company reported that it was able to drill its deepest and hottest geothermal well to date in a mere 16 days. Now on Wednesday, the company is announcing an additional $206 million in financing for its Cape Station project in Utah.
With this latest tranche of funding, the firm’s 500-megawatt development in rural Beaver County is on track to deliver 24/7 clean power to the grid beginning in 2026, reaching full operation in 2028. The development is shaping up to be an all-too-rare phenomenon: A first-of-a-kind clean energy project that has remained on track to hit its deadlines while securing the trust of institutional investors, who are often wary of betting on novel infrastructure projects.
The bulk of this latest financing comes from the Bill Gates-backed Breakthrough Energy Catalyst program, which provided $100 million in project-level equity funding. The energy and commodity trading company Mercuria provided $60 million in corporate loans, increasing its existing fixed-term loan from $40 million to $100 million. An additional $45.6 million in short-term debt financing came from XRL-ALC, an affiliate of X-Caliber Rural Capital, which provides loans to infrastructure projects in rural areas. That comes on top of a previous $100 million loan from the firm.
The plan is for Cape Station to deliver 100 megawatts of grid power in 2026, with the additional 400 megawatts by 2028. The facility has the necessary permitting to expand production to two gigawatts — twice the size of a standard nuclear reactor. And on Monday, the company announced that an independent report from the consulting firm DeGolyer & MacNaughton confirms that the project could expand further still — eventually supporting over 5 gigawatts of clean power at depths of up to 13,000 feet. The company’s latest drilling results, which reached 15,765 feet at 520 degrees Fahrenheit, could push the project’s potential power output even higher.
Traditional geothermal wells normally max out at around 10,000 feet, and must be built in locations where a lucky confluence of geological features come together: high temperatures, porous rock, and naturally occurring water or steam. But because Fervo can drill thousands of feet deeper, it’s able to access hot rocks in locations that weren’t previously suitable for geothermal development, pumping high-pressure water down into the wells to fracture rocks and thus create its own geothermal reservoirs.
The primary customer for Fervo’s Cape Station project is Southern California Edison, which signed a 320-megawatt power purchase agreement with the company last year, advertised as the largest geothermal PPA ever. Shell was also announced as a customer this year. Fervo is already providing 3.5 megawatts of power to Google via a pilot project in Nevada, which it’s seeking to expand, entering into a 115 megawatt PPA with NV Energy and the tech giant to further build out production at this location.
Fervo’s latest funding comes on top of last February’s $244 million Series D round led by Devon Energy, as well as an additional $255 million in corporate equity and debt financing that it announced last December. On top of investments from well known climate tech venture firms such as Breakthrough Energy Ventures and Galvanize Climate Solutions, the company has secured institutional investment from Liberty Mutual as well as public pension funds such as the California State Teachers’ Retirement System and the Canada Pension Plan Investment Board.
Fervo, like all clean energy startups, also stands to benefit greatly from the Inflation Reduction Act’s clean energy tax credits, which are now in jeopardy as President Trump’s One Big, Beautiful Bill works its way through the Senate. While Secretary of Energy Chris Wright has traditionally been a booster of geothermal energy and is advocating to keep tax incentives for the technology in place through 2031, the bill as it stands would essentially erase incentives for all geothermal projects that start construction more than 60 days after the bill’s passage.
Fervo broke ground on Cape Station in 2023, so that project will make the cut. For future Fervo developments, it’s much less clear. But for now, the company seems to be flush with cash and potential in a climate tech world awash in ill omens.