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Maybe you’re reading this in a downpour. Perhaps you’re reading it because you have questions about the upcoming hurricane season. Or maybe you’re reading it because you’re one of the 150 million Americans enduring record-breaking temperatures in this week’s heat dome.
Whatever the reason, you have a question: Is this climate change?
There’s an old maxim — that, like many things, is often dubiously attributed to Mark Twain — that goes something like, “Climate is what you expect and weather is what you get.” Weather refers to the event itself, while climate refers to the trends (averaged over 30 years or more, usually) that might make such an event more or less likely.
Climate change is almost always an exacerbating factor in the case of something like a heat wave or a heat dome. In other situations, the picture is far more complicated and uncertain. It can take years to understand if and how climate change made an extreme weather event more likely, and while organizations like World Weather Attribution work hard to provide quick and accurate estimations, getting the science wrong can fuel climate skepticism and bolster deniers’ arguments. While it might be tempting to pin all extreme weather on climate change, the truth is, not all of it is.
Still, we do know a lot about how climate change influences the weather — and we’re always learning more. While this guide is far from the be-all and end-all of attribution and should be referred to with caveats, here is what we know about how climate change is shaping the extreme weather we see today.
“When you’re looking at heat extremes, there is almost always a climate change signal,” Clair Barnes, a research associate with World Weather Attribution, told me. “I don’t think there’s ever not been a climate change signal since I’ve been doing it in the last couple of years.”
As the planet warms, local temperatures respond everywhere. There are not as many complicating variables in this relationship as there are with something like drought. “With heat waves, it’s the same answer every time: It got hotter because it’s got hotter,” Barnes said.
The Intergovernmental Panel on Climate Change has found that the kind of heat waves that would have occurred once in a decade before the Industrial Revolution now occur almost three times more frequently and are 1.2 degrees Celsius (or 2.2 degrees Fahrenheit) warmer. The most extreme examples — like the 2021 heat dome over the Pacific Northwest — appear to have been possible only because of warming caused by greenhouse gas emissions. Additionally, about 37% of global heat-related deaths, which amount to tens of thousands of deaths per year, are attributable to climate change.
There have, of course, always been heat waves. But it is with high confidence that scientists say they are hotter and last longer now than they would otherwise because of climate change.
Did climate change do it? It is “virtually certain” that heat waves are more frequent and hotter than they otherwise would be because of climate change.
WWA doesn’t specifically study wildfires since they aren’t technically “weather” (though once they form, they can make their own). Instead, the organization studies the conditions that make a fire more likely. In the American West, this deadly combo usually involves high pressure, extremely dry air, and some wind.
Globally, burned areas decreased between 1998 and 2015, but that isn’t because fire-weather conditions are improving — rather, regional leaders have gotten better at things like land use and fire management. Fire weather, meanwhile, is increasing and lasting longer due to climate change. In particular, hotter temperatures — especially hotter overnight temperatures — make it more difficult to combat the fires that do ignite. (Most fires in the U.S. start due to human negligence or arson, rather than by natural causes such as lightning strikes.)
This is especially the case in California, where 10 of the state’s largest fires have occurred in the past two decades, with five in 2020 alone; a 2023 National Integrated Drought Information System-funded study further found a 320% increase in burned areas in the state between 1996 and 2021 due to contributions of human-caused climate change, with that number expected to grow in the coming decades.
On average, wildfire weather season lengthened by two weeks around the globe from 1979 to 2019. The IPCC has medium confidence in the claim that fire weather has become more probable in the U.S., Europe, Australia, and parts of Europe over the past century, and high confidence that fire weather will increase regionally due to global warming in the coming years.
Did climate change do it? Climate change has almost certainly exacerbated the heat, humidity, and drought conditions necessary for wildfires to start. The actual ignition of the fire is frequently human-caused, however, and complicating variables such as local vegetation, forest management, and land use can also muddle the picture.
Tropical cyclones are large and complicated storm systems. Ocean temperatures, the El Niño-Southern Oscillation, wind shear, barometric pressure, atmospheric moisture, the shape of the continental shelf, emergency preparedness measures, and pure luck all affect how destructive a given storm might be — when or if it makes landfall. Climate change can put a thumb on the scale, but it is far from a lone actor.
Hurricanes — the strongest manifestation of a tropical cyclone — essentially work by transferring heat from the ocean into wind energy. Because the ocean absorbs excess heat from the warming atmosphere, scientists expect to see more “major” hurricanes of Category 3 or above in the coming years.
The storms aren’t just getting more powerful, though. Because of the interaction between ocean heat and energy in a hurricane, the storms also intensify more rapidly and are “more than twice as likely to strengthen from a weak Category 1 hurricane to a major Category 3 or stronger hurricane in a 24-hour period than they were between 1970 and 1990,” according to new research published last year.
WWA says it cannot attribute the intensification of any individual storm to climate change due to relatively limited modeling so far, so the organization instead looks at how climate change may have amplified associated rainfall and storm surges. Rainfall and flooding are, in fact, more deadly than high wind speeds in hurricanes, and both are understood to be increasing because of climate change. Put simply, a warmer atmosphere can hold more water, which means worse deluges. Researchers linked extreme rainfall during Hurricanes Katrina, Maria, and Irma to climate change; Hurricane Harvey, which flooded up to 50% of the properties in Harris County, Texas, when it made landfall in 2017, had a rainfall total 15% to 38% greater than it would have been in a pre-industrial world, researchers found. Additionally, rising sea levels caused by climate change will worsen coastal flooding during such events.
However, “trends indicate no significant change in the frequency of tropical cyclones globally,” according to the IPCC. That is, there aren’t more hurricanes; the ones that form are just more likely to become major hurricanes. Scientists understand far less about what climate change means for the smaller Category 1 or 2 storms, or if it will impact the diameter of the storms that do form.
Did climate change do it? The greenhouse effect is making the atmosphere warmer, and in a warmer climate, we’d expect to see more major hurricanes of Category 3 and above. Evidence also points to hurricanes intensifying much more rapidly in today’s climate than in the past. Climate does not seem to play a role in the overall number of storms, though, and other critical factors like the path of a storm and the emergency preparedness of a given community have a significant impact on the potential loss of life but aren’t linked to a warmer atmosphere. Hurricanes are complicated events and there is still much more research to be done in understanding how exactly they’re impacted by climate change.
In the winter, your skin might feel dry, and your lips might chap; in the summer, many parts of the country feel sticky and swampy. This is simple, observable physics: Cold air holds less moisture, and warm air holds more. The “Clausius-Clapeyron” relation, as it is known, tells us that in 1 degree C warmer air, there is 7% more moisture. All that moisture has to go somewhere, so quite literally, when it rains, it pours. (That is, when and where it rains: WWA notes that “an attribution study in northern Europe found that human influence has so far had little effect on the atmospheric circulation that caused a severe rainfall event.”)
Like heat, the relationship between warm air and rainfall is well understood, which is why the IPCC is highly confident in the attributable influence of climate change on extreme rain. While it may seem confusing that both droughts and intense rainfall are symptoms of climate change, the warming atmosphere seems to increase precipitation variability, making events on the extreme margins more likely and more frequent.
Increased precipitation can have counterintuitive results, though. Rain occurring over fewer overall days due to bursts of extreme rainfall, for example, can actually worsen droughts. And while it might seem like more water in the atmosphere would mean snowier winters, that’s only true in certain places. Because it’s also warmer, snowfall is declining globally while winters are getting wetter — and as a result, probably more miserable.
But what does “more rain” really mean? Rain on its own isn’t necessarily bad, but when it overwhelms urban infrastructure or threatens roads and houses, it can quickly become deadly. Flooding, of course, is often the result of extreme rain, but “the signal in the rainfall is not necessarily correlated to the magnitude of the floods because there are other factors that turn rain into a flood,” Barnes, the research associate with WWA, told me, citing variables such as land use, water management, urban drainage, and other physical elements of a landscape.
Landslides, likewise, are caused by everything from volcanic eruptions to human construction, but rain is often a factor (climate-linked phenomena like wildfires and thawing permafrost also contribute to landslides). The IPCC writes with “high confidence” that landslides, along with floods and water availability, “have the potential to lead to severe consequences for people, infrastructure, and the economy in most mountain regions.”
Did climate change do it? More extreme rainfall is consistent with our understanding of climate change’s effects. Many other local, physical factors can compound or mitigate disasters like floods and mudslides, however.
When I spoke with Barnes, of WWA, she told me, “It’s really easy to define a heat wave. You just go, ‘It was hot.’” Droughts, not so much. For one thing, you have to define the time span you’re looking at. There are also different kinds of drought: meteorological, when there hasn’t been enough rain; hydrological, when rivers are low possibly because something else is diverting water from the natural cycle; and agricultural, when there is not enough water specifically for crops. Like flooding, many different infrastructural and physical factors go into exacerbating or even creating various kinds of droughts.
Drought as we mean it here, though, is a question of soil moisture, Barnes told me. “That’s really hard to get data on,” she said, “and we don’t necessarily understand the feedback mechanisms affecting that as well as we understand heat waves.” As recently as 2013, the IPCC had only low confidence that trends in drought could be attributed to climate change.
We have a better understanding of how drought and climate change interact now, including how higher temperatures drive evaporation and cut into snowpack, leading to less meltwater in rivers. The IPCC’s most recent report concluded that “even relatively small incremental increases in global warming (+0.5C) cause a worsening of droughts in some regions.” The IPCC also has high confidence that “more regions are affected by increases in agricultural and ecological droughts with increasing global warming.”
WWA’s attribution studies have, however, found examples of droughts that have no connection to climate change. The organization flags that it has the highest confidence in the climate affecting droughts in the Mediterranean, southern Africa, central and eastern Asia, southern Australia, and western North America and lower confidence in central and west Africa, western and central Europe, northeast South America, and New Zealand.
Did climate change do it? Maybe. Some droughts have a strong climate signal — California’s, for example. Still, researchers remain cautious about attribution for these complicated events due in part to their significant regional variability.
Tornadoes are extremely difficult to study. Compared to droughts, which can last years, tornadoes occupy a teeny tiny area and last for just a blip in time. They “wouldn’t even register” on the models WWA uses for its attribution studies, Barnes said. “It would probably look like a slightly raised average wind speed.” The IPCC, for its part, has only “low confidence” in a connection between climate change and “severe convective storms” like tornadoes, in part due to the “short length of high-quality data records.”
But we are learning more every day. This spring, researchers posited that Tornado Alley is moving east and “away from the warm season, especially the summer, and toward the cold season.” Though it’s not entirely clear why this is happening, one theory is that it relates to how climate change is affecting regional seasonality: winters and nights are becoming warmer in certain areas, and thus more conducive to tornado formation, while others are becoming too hot for storms to form during the normal season.
Did climate change do it? Researchers aren’t entirely sure but there doesn’t appear to be a correlation between tornado formation and climate change. Still, warmer temperatures potentially make certain areas more or less prone to tornadoes than they were in the past.
We say “it was a dark and stormy night” because “it was a severe convective storm” doesn’t have the same ring. But an SCS — which forms when warm, moist air rises into colder air — is the most common and most damaging weather phenomenon in the United States. You probably just call it a thunderstorm.
Severe convective storms cause many localized events that we think of as “weather,” including heavy rainfall, high winds, tornadoes, hail, thunder, and lightning. Because heat and moisture are necessary ingredients for these kinds of storms, and because the atmosphere is getting both warmer and wetter, climate models “consistently” and confidently predict an “increase in the frequency of severe thunderstorms,” the IPCC notes — but, “there is low confidence in the details of the projected increase.” Trends remain poorly studied and highly regionally dependent; in the United States, for example, there is still no evidence of a “significant increase in convective storms, and hail and severe thunderstorms.” Still, other research suggests that for every 1.8 degree F of warming, the conditions favorable to severe convective storms will increase in frequency by up to 20%.
Hail forms during severe convective storms when the hot, moist air rises to a region of the atmosphere where it is cold enough to freeze. Like thunderstorms more generally, data is fairly limited on hail, making it difficult to study long-term trends (most climate models also do not look directly at hail, studying convective storms more broadly instead). However, it’s been hypothesized that climate change could create larger and more destructive hail in the future; if thunderstorm updrafts grow stronger, as projected, then they could hold hail at freezing high altitudes for longer, allowing individual hailstones to grow larger before falling back to Earth. One study even suggested that with continued warming, there could be a 145% increase in “significant severe hail” measuring at least 2 inches in diameter — that is, a little smaller than a tennis ball.
Did climate change do it? Everything we know about thunderstorms suggests that a warmer, wetter atmosphere will mean severe convection storms become both more frequent and more intense. But there is still very little available data to track the long-term trends, so attributing any one storm to climate change would be nearly impossible.
Just as virtually all heat waves worldwide are worsened by climate change, “nearly every instance of extreme cold across the world has decreased in likelihood,” according to the WWA. While the organization has run attribution studies on “a few” heavy snowfall events, it has either found no link to climate change or has been unable to state a conclusion confidently. On the other hand, the loss of snow cover, permafrost, Arctic sea ice, and glaciers has a high-confidence link to human-caused climate change in the IPCC report.
Just because climate change makes extreme cold and snowstorms less likely does not mean they won’t happen. Research published in Nature earlier this year suggests climate change could bring more snow to certain places, as extremely cold parts of the world warm to snow-friendly temperatures, and increased precipitation from a warmer atmosphere results in more flurries. Parts of Siberia and the northern Great Plains are even experiencing a deepening snowpack.
Did climate change do it? Probably not — though there are notable exceptions.
An earthquake is usually caused by the release of energy when two tectonic plates suddenly slip past each other (though they can also be caused by fossil fuel extraction). But before you dismiss earthquakes as having no connection to climate change, there is one place where there could be a link: water.
As Emily Pontecorvo wrote for Heatmap this spring, “Changes in surface water, whether because of heavy rain, snow, or drought, could either increase or relieve stress on geologic faults, causing them to shift.” Admittedly, even if there is a relationship between climate change, water, and earthquakes, it appears to be small — so small that humans probably can’t feel any resulting quakes.
Did climate change do it? It’s highly unlikely.
Earlier this year, extreme turbulence on a Singapore-bound flight from London killed one person and injured at least 20 others. While such events remain rare — the U.S. National Transportation Safety Board recorded just 101 serious injuries caused by turbulence on millions of flights between 2013 and 2022 — extreme turbulence appears to be increasing, potentially because of climate change.
According to one study, severe turbulence is up 55% between 1979 and 2020, seemingly due to an increase in wind shear at high altitudes caused by the temperature contrast between the equator and the North Pole. (This relationship is a little bit complicated, but essentially, at higher altitudes, the temperature over the pole has been declining due to rapid Arctic temperature changes even as it’s increased at the equator; lower in the troposphere, the opposite is happening). Other studies have similarly shown that doubling the concentration of carbon dioxide in the atmosphere could increase moderate-to-severe turbulence by as much as 127%.
Data, however, is limited and fairly subjective, leading to some skepticism in the scientific community and inaccurate dismissals by climate-change deniers. As with many complex weather phenomena, our understanding of how climate change interacts with turbulence will likely grow in the coming years as the field of research develops.
Did climate change do it? Potentially in some cases, but there is still much to learn about the connection between the two.
Desertification differs from drought in that it describes a decline in soil fertility, water, and plant life to the point of total “land degradation.” (In contrast, land can become productive again after a drought.) Like other compound disasters, desertification results from natural processes, climatic conditions, and land management practices such as grazing and deforestation.
According to the Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services, land degradation is “almost always” the result of these “multiple interacting causes,” and the warming climate certainly isn’t helping. Heat stress can kill off vegetation, making landscapes more prone to desertification, as well as drive aridification.
In the resulting drylands — which comprise about 46% of global land area — you can expect dust storms (also known as haboobs), and sand storms resulting from the wind kicking up loose soils. While there have always been sand storms, one study suggests that climate change is one of the critical drivers of global annual dust emissions increasing by 25% between the late 19th century and today.
However, “climate change impacts on dust and sand storm activity remain a critical gap,” writes the IPCC, and more research is desperately needed to address this. By the UN’s estimate, dust storms were associated with the deaths of 402,000 people in 2005. As many as 951 million people, mainly in South Asia, Central Asia, West Africa, and East Asia, could be vulnerable to the impacts of desertification if climate change continues.
Did climate change do it? It was potentially a factor, but we have lots more to learn.
Are locust swarms technically “weather”? Not really. But so long as we’re on the topic of weather events of Biblical proportions, locust swarms might as well be addressed, too.
And the answer may surprise you: Climate appears to be a driver of locust swarms, which threaten food security and exacerbate famines throughout Africa, the Middle East, and South Asia. Locusts prefer “arid areas punched by extreme rainfall,” according to one study that looked at the connection between swarms and climate change, and while much of that pattern is fixed in the natural El Niño–Southern Oscillation cycle, a warming climate will also “lead to widespread increases in locust outbreaks with emerging hotspots in west central Asia.” In particular, the research found that in a low-emissions scenario, locust habitat could increase by 5%, while in a high-emissions scenario, it could increase by 13% to 25% between 2065 and 2100.
Did climate change do it? It’d likely be tricky to attribute any one locust swarm to climate change, but as with many other natural phenomena, climate likely plays a compounding factor.
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On a late-night House vote, Tesla’s slump, and carbon credits
Current conditions: Tropical storm Chantal has a 40% chance of developing this weekend and may threaten Florida, Georgia, and the Carolinas • French far-right leader Marine Le Pen is campaigning on a “grand plan for air conditioning” amid the ongoing record-breaking heatwave in Europe • Great fireworks-watching weather is in store tomorrow for much of the East and West Coasts.
The House moved closer to a final vote on President Trump’s “big, beautiful bill” after passing a key procedural vote around 3 a.m. ET on Thursday morning. “We have the votes,” House Speaker Mike Johnson told reporters after the rule vote, adding, “We’re still going to meet” Trump’s self-imposed July 4 deadline to pass the megabill. A floor vote on the legislation is expected as soon as Thursday morning.
GOP leadership had worked through the evening to convince holdouts, with my colleagues Katie Brigham and Jael Holzman reporting last night that House Freedom Caucus member Ralph Norman of North Carolina said he planned to advance the legislation after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits, particularly for wind and solar energy projects, which the Senate version phases out more slowly than House Republicans wanted. “It’s not entirely clear what the president could do to unilaterally ‘deal with’ tax credits already codified into law,” Brigham and Holzman write, although another Republican holdout, Representative Chip Roy of Texas, made similar allusions to reporters on Wednesday.
Tesla delivered just 384,122 cars in the second quarter of 2025, a 13.5% slump from the 444,000 delivered in the same quarter of 2024, marking the worst quarterly decline in the company’s history, Barron’s reports. The slump follows a similarly disappointing Q1, down 13% year-over-year, after the company’s sales had “flatlined for the first time in over a decade” in 2024, InsideEVs adds.
Despite the drop, Tesla stock rose 5% on Wednesday, with Wedbush analyst Dan Ives calling the Q2 results better than some had expected. “Fireworks came early for Tesla,” he wrote, although Barron’s notes that “estimates for the second quarter of 2025 started at about 500,000 vehicles. They started to drop precipitously after first-quarter deliveries fell 13% year over year, missing Wall Street estimates by some 40,000 vehicles.”
The European Commission proposed its 2040 climate target on Wednesday, which, for the first time, would allow some countries to use carbon credits to meet their emissions goals. EU Commissioner for Climate, Net Zero, and Clean Growth Wopke Hoekstra defended the decision during an appearance on Euronews on Wednesday, saying the plan — which allows developing nations to meet a limited portion of their emissions goals with the credits — was a chance to “build bridges” with countries in Africa and Latin America. “The planet doesn’t care about where we take emissions out of the air,” he separately told The Guardian. “You need to take action everywhere.” Green groups, which are critical of the use of carbon credits, slammed the proposal, which “if agreed [to] by member states and passed by the EU parliament … is then supposed to be translated into an international target,” The Guardian writes.
Around half of oil executives say they expect to drill fewer wells in 2025 than they’d planned for at the start of the year, according to a Federal Reserve Bank of Dallas survey. Of the respondents at firms producing more than 10,000 barrels a day, 42% said they expected a “significant decrease in the number of wells drilled,” Bloomberg adds. The survey further indicates that Republican policy has been at odds with President Trump’s “drill, baby, drill” rhetoric, as tariffs have increased the cost of completing a new well by more than 4%. “It’s hard to imagine how much worse policies and D.C. rhetoric could have been for U.S. E&P companies,” one anonymous executive said in the report. “We were promised by the administration a better environment for producers, but were delivered a world that has benefited OPEC to the detriment of our domestic industry.”
Fine-particulate air pollution is strongly associated with lung cancer-causing DNA mutations that are more traditionally linked to smoking tobacco, a new study by researchers at the University of California, San Diego, and the National Cancer Institute has found. The researchers looked at the genetic code of 871 non-smokers’ lung tumors in 28 regions across Europe, Africa, and Asia and found that higher levels of local air pollution correlated with more cancer-driving mutations in the respective tumors.
Surprisingly, the researchers did not find a similar genetic correlation among non-smokers exposed to secondhand smoke. George Thurston, a professor of medicine and population health at New York University, told Inside Climate News that a potential reason for this result is that fine-particulate air pollution — which is emitted by cars, industrial activities, and wildfires — is more widespread than exposure to secondhand smoke. “We are engulfed in fossil-fuel-burning pollution every single day of our lives, all day long, night and day,” he said, adding, “I feel like I’m in the Matrix, and I’m the only one that took the red pill. I know what’s going on, and everybody else is walking around thinking, ‘This stuff isn’t bad for your health.’” Today, non-smokers account for up to 25% of lung cancer cases globally, with the worst air quality pollution in the United States primarily concentrated in the Southwest.
EPA
National TV news networks aired a combined 4 hours and 20 minutes of coverage about the record-breaking late-June temperatures in the Midwest and East Coast — but only 4% of those segments mentioned the heat dome’s connection to climate change, a new report by Media Matters found.
“We had enough assurance that the president was going to deal with them.”
A member of the House Freedom Caucus said Wednesday that he voted to advance President Trump’s “big, beautiful bill” after receiving assurances that Trump would “deal” with the Inflation Reduction Act’s clean energy tax credits – raising the specter that Trump could try to go further than the megabill to stop usage of the credits.
Representative Ralph Norman, a Republican of North Carolina, said that while IRA tax credits were once a sticking point for him, after meeting with Trump “we had enough assurance that the president was going to deal with them in his own way,” he told Eric Garcia, the Washington bureau chief of The Independent. Norman specifically cited tax credits for wind and solar energy projects, which the Senate version would phase out more slowly than House Republicans had wanted.
It’s not entirely clear what the president could do to unilaterally “deal with” tax credits already codified into law. Norman declined to answer direct questions from reporters about whether GOP holdouts like himself were seeking an executive order on the matter. But another Republican holdout on the bill, Representative Chip Roy of Texas, told reporters Wednesday that his vote was also conditional on blocking IRA “subsidies.”
“If the subsidies will flow, we’re not gonna be able to get there. If the subsidies are not gonna flow, then there might be a path," he said, according to Jake Sherman of Punchbowl News.
As of publication, Roy has still not voted on the rule that would allow the bill to proceed to the floor — one of only eight Republicans yet to formally weigh in. House Speaker Mike Johnson says he’ll, “keep the vote open for as long as it takes,” as President Trump aims to sign the giant tax package by the July 4th holiday. Norman voted to let the bill proceed to debate, and will reportedly now vote yes on it too.
Earlier Wednesday, Norman said he was “getting a handle on” whether his various misgivings could be handled by Trump via executive orders or through promises of future legislation. According to CNN, the congressman later said, “We got clarification on what’s going to be enforced. We got clarification on how the IRAs were going to be dealt with. We got clarification on the tax cuts — and still we’ll be meeting tomorrow on the specifics of it.”
Neither Norman nor Roy’s press offices responded to a request for comment.
The foreign entities of concern rules in the One Big Beautiful Bill would place gigantic new burdens on developers.
Trump campaigned on cutting red tape for energy development. At the start of his second term, he signed an executive order titled, “Unleashing Prosperity Through Deregulation,” promising to kill 10 regulations for each new one he enacted.
The order deems federal regulations an “ever-expanding morass” that “imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness.” It goes on to say that these regulations “are often difficult for the average person or business to understand,” that they are so complicated that they ultimately increase the cost of compliance, as well as the risks of non-compliance.
Reading this now, the passage echoes the comments I’ve heard from industry groups and tax law experts describing the incredibly complex foreign entities of concern rules that Congress — with the full-throated backing of the Trump administration — is about to impose on clean energy projects and manufacturers. Under the One Big Beautiful Bill Act, wind and solar, as well as utility-scale energy storage, geothermal, nuclear, and all kinds of manufacturing projects will have to abide by restrictions on their Chinese material inputs and contractual or financial ties with Chinese entities in order to qualify for tax credits.
“Foreign entity of concern” is a U.S. government term referring to entities that are “owned by, controlled by, or subject to the jurisdiction or direction of” any of four countries — Russia, Iran, North Korea, and most importantly for clean energy technology, China.
Trump’s tax bill requires companies to meet increasingly strict limits on the amount of material from China they use in their projects and products. A battery factory starting production next year, for example, would have to ensure that 60% of the value of the materials that make up its products have no connection to China. By 2030, the threshold would rise to 85%. The bill lays out similar benchmarks and timelines for clean electricity projects, as well as other kinds of manufacturing.
But how companies should calculate these percentages is not self-evident. The bill also forbids companies from collecting the tax credits if they have business relationships with “specified foreign entities” or “foreign-influenced entities,” terms with complicated definitions that will likely require guidance from the Treasury for companies to be sure they pass the test.
Regulatory uncertainty could stifle development until further guidance is released, but how long that takes will depend on if and when the Trump administration prioritizes getting it done. The One Big Beautiful Bill Act contains a lot of other new tax-related provisions that were central to the Trump campaign, including a tax exemption for tips, which are likely much higher on the department’s to-do list.
Tax credit implementation was a top priority for the Biden administration, and even with much higher staffing levels than the department currently has, it took the Treasury 18 months to publish initial guidance on foreign entities of concern rules for the Inflation Reduction Act’s electric vehicle tax credit. “These things are so unbelievably complicated,” Rachel McCleery, a former senior advisor at the Treasury under Biden, told me.
McCleery questioned whether larger, publicly-owned companies would be able to proceed with major investments in things like battery manufacturing plants until that guidance is out. She gave the example of a company planning to pump out 100,000 batteries per year and claim the per-kilowatt-hour advanced manufacturing tax credit. “That’s going to look like a pretty big number in claims, so you have to be able to confidently and assuredly tell your shareholder, Yep, we’re good, we qualify, and that requires a certification” by a tax counsel, she said. To McCleery, there’s an open question as to whether any tax counsel “would even provide a tax opinion for publicly-traded companies to claim credits of this size without guidance.”
John Cornwell, the director of policy at the Good Energy Collective, which conducts research and advocacy for nuclear power, echoed McCleery’s concerns. “Without very clear guidelines from the Treasury and IRS, until those guidelines are in place, that is going to restrict financing and investment,” Cornwell told me.
Understanding what the law requires will be the first challenge. But following it will involve tracking down supply chain data that may not exist, finding alternative suppliers that may not be able to fill the demand, and establishing extensive documentation of the origins of components sourced through webs of suppliers, sub-suppliers, and materials processors.
The Good Energy Collective put out an issue brief this week describing the myriad hurdles nuclear developers will face in trying to adhere to the tax credit rules. Nuclear plants contain thousands of components, and documenting the origin of everything from “steam generators to smaller items like specialized fasteners, gaskets, and electronic components will introduce substantial and costly administrative burdens,” it says. Additionally the critical minerals used in nuclear projects “often pass through multiple processing stages across different countries before final assembly,” and there are no established industry standards for supply chain documentation.
Beyond the documentation headache, even just finding the materials could be an issue. China dominates the market for specialized nuclear-grade materials manufacturing and precision component fabrication, the report says, and alternative suppliers are likely to charge premiums. Establishing new supply chains will take years, but Trump’s bill will begin enforcing the sourcing rules in 2026. The rules will prove even more difficult for companies trying to build first-of-a-kind advanced nuclear projects, as those rely on more highly specialized supply chains dominated by China.
These challenges may be surmountable, but that will depend, again, on what the Treasury decides, and when. The Department’s guidance could limit the types of components companies have to account for and simplify the documentation process, or it could not. But while companies wait for certainty, they may also be racking up interest. “The longer there are delays, that can have a substantial risk of project success,” Cornwell said.
And companies don’t have forever. Each of the credits comes with a phase-out schedule. Wind manufacturers can only claim the credits until 2028. Other manufacturers have until 2030. Credits for clean power projects will start to phase down in 2034. “Given the fact that a lot of these credits start lapsing in the next few years, there’s a very good chance that, because guidance has not yet come out, you’re actually looking at a much smaller time frame than than what is listed in the bill,” Skip Estes, the government affairs director for Securing America’s Energy Future, or SAFE, told me.
Another issue SAFE has raised is that the way these rules are set up, the foreign sourcing requirements will get more expensive and difficult to comply with as the value of the tax credits goes down. “Our concern is that that’s going to encourage companies to forego the credit altogether and just continue buying from the lowest common denominator, which is typically a Chinese state-owned or -influenced monopoly,” Estes said.
McCleery had another prediction — the regulations will be so burdensome that companies will simply set up shop elsewhere. “I think every industry will certainly be rethinking their future U.S. investments, right? They’ll go overseas, they’ll go to Canada, which dumped a ton of carrots and sticks into industry after we passed the IRA,” she said.
“The irony is that Republicans have historically been the party of deregulation, creating business friendly environments. This is completely opposite, right?”