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Climate policy strategist Justin Guay has a populist pitch for our warming world.
On the third anniversary of the signing of the Inflation Reduction Act, Heatmap contributor Advait Arun mourns what’s been lost — but more importantly, charts a path toward what comes next.
A longtime climate messaging strategist is tired of seeing the industry punch below its weight.
Two former Department of Energy staffers argue from experience that severe foreign entity restrictions aren’t the way to reshore America’s clean energy supply chain.
In defense of “everything bagel” policymaking.
The U.S. is too enmeshed in the global financial system for the rest of the world to solve climate change without us.
And coal communities and fracking villages and all the rest.
Amid last month’s headlines about departures from the Department of Energy, the exits of Brian Anderson and Briggs White received little attention. Yet their departures foreshadowed something larger: the quiet dismantling of federal support for the economic diversification of fossil fuel–dependent regions of the country.
Anderson and White led the Energy Communities Interagency Working Group, created by a 2021 executive order to coordinate the federal strategy to support coal–reliant regions through a global transition to cleaner energy. This Biden-era strategy recognized that communities where employment opportunities and tax bases depend on fossil fuels face serious risks — local levels of prosperity generally rise and fall with production levels — and they require support to build new engines of economic activity.
In contrast, President Donald Trump’s prescription for fossil fuel communities is to produce more fossil fuels. In addition to cutting clean energy incentives, the budget reconciliation bill passed by the House of Representatives last week seeks to directly support fossil fuel production by accelerating leasing and permitting, lowering royalty rates, and repealing the methane emissions fee.
History suggests that Trump’s ability to help fossil fuel communities by boosting production is limited — similar efforts in Trump’s first term failed to significantly alter the trajectory of coal, oil, or natural gas output. But the funding cuts codified in the current reconciliation bill could do real harm by dismantling federal programs that support economic diversification. Communities that depend on fossil fuel industries will be vulnerable to severe economic shocks when demand for their products eventually declines.
The need to help transitioning regions isn’t new, but federal support for struggling communities has long been stigmatized. In 1980, a federal commission urged policymakers to focus less on struggling places and more on helping individuals move to where opportunity existed. President Ronald Reagan used this report to justify cutting federal economic development programs, including proposing to eliminate the Appalachian Regional Commission. Congress did not fully abolish the ARC, but its budget was slashed nearly in half, leading to staff reductions and the phasing out of the programs designed to bolster the economy of the persistently struggling region.
In the decades that followed, manufacturing towns were largely left to fend for themselves as globalization accelerated. A study by MIT’s David Autor and colleagues showed that 86% of the manufacturing job losses from trade shocks in the early 2000s were still reflected in depressed local employment rates in 2019. Most workers didn’t find new jobs or migrate.
If the loss of dominant employers causes “miniature Great Depressions” in local economies across the country, then a rapid decline in fossil fuels spells acute risks for communities that depend on these industries for jobs and public revenues. We see this happening already in coal-reliant regions. In Boone County, West Virginia, coal production declined by over 80% from 2009 to 2019, causing the county’s gross domestic product to decline by over 60%. Three of Boone’s 10 elementary schools were forced to close.
President Trump entered office in 2017 pledging to “bring the coal industry back 100%” with a deregulatory strategy much like the one his administration is pursuing today. But during his first four-year term, domestic coal mining employment fell by 26%, and coal-fired power plant capacity declined by 13%, demonstrating the futility of doubling down on an economic model when macroeconomic forces are working against it.
These outcomes are not inevitable. Four-hundred miles west of Boone, the far more economically diverse Hopkins County, Kentucky was able to weather its own 75% decline in coal production without a comparable economic crash. In Germany’s Ruhr Valley, the German government paired a coal phase-out with over €100 billion in long-term investments — new universities, industrial incentives, environmental restoration, and worker retraining. While some towns in the region are still struggling, the Ruhr Valley’s shift from a coal powerhouse to a more diverse, knowledge-based economy shows that fossil fuel regions can reinvent themselves.
Recent policies in the U.S. began to take similar steps. As part of a broader federal place-based economic strategy, the American Rescue Plan dedicated hundreds of millions to rebuilding coal communities in 2021. Then came the Infrastructure Investment and Jobs Act, which included billions for cleaning up abandoned mines and orphaned oil wells and funding large-scale demonstration projects for carbon capture and hydrogen production. The Inflation Reduction Act added bonus tax credits and carve-outs to grant programs that target fossil fuel communities.
The now-defunct Energy Communities Interagency Working Group helped knit these efforts together. It served as a clearinghouse for funding opportunities, published “how-to” guides for local leaders, and deployed “rapid response teams” to coal regions.
To be sure, the strategy had limitations. Most programs focused narrowly on coal regions and clean energy solutions, and the IWG had minimal funding for its coordinating efforts. But the strategy shift marked real progress and has generated promising early signs, such as an iron air battery manufacturing facility at an old steel mill in Weirton, West Virginia, carbon capture projects in North Dakota and Texas, and “hydrogen hubs” in the Gulf Coast and Appalachia.
Under the Trump administration, that progress is at risk. Government efficiency initiatives have already led to the gutting of federal programs best positioned to support investments in fossil fuel communities, including the Loan Programs Office, the Office of Clean Energy Demonstrations. and the Federal Thriving Communities Network Initiative.
Trump’s budget proposes severe cuts to the federal support for regional economic development, including eliminating the Economic Development Administration, the federal agency dedicated to helping communities strengthen their local economies.
The reconciliation bill passed by the House of Representatives is a step toward codifying those cuts — with reductions in non-defense discretionary annual spending of $163 billion (over 20%) — and it would also eliminate most of the tax credits and grant programs that encourage investments in energy infrastructure projects in fossil fuel communities. Certain policies that are especially well suited for fossil fuel communities, like incentives for enhanced geothermal energy, may be phased out before ever really getting off the ground.
Rolling back support for fossil fuel communities will curb these regions’ opportunities to build new engines of economic prosperity. Without credible, lasting commitments from the federal government, many fossil fuel communities have little choice but to stick to the economic model they know best, despite their vulnerability to the eventual end of fossil fuels.
The founder of Galvanize Climate Solutions and a 2020 presidential candidate does some math on how smart climate policy could help the U.S. in a trade war.
We’re now four months into a worldwide trade war, and the economic data confirms it’s Americans who are paying the price. A growing body of surveys and forecasts indicate that inflation will be a persistent, wallet-draining reality for U.S. households. Voters now expect inflation to hit 7.3% next year, and as of March, the Organisation for Economic Co-operation and Development projects that tariffs and trade tensions could help drive U.S. inflation up by 0.3 percentage points in 2025.
But there are solutions for whipping inflation. One is unleashing an abundance of clean energy.
Clean energy can have a powerful deflationary ripple effect, lowering prices across the economy. Solar has for years been the cheapest form of new energy around the world, and recent research from Goldman Sachs shows that prices of clean technologies like large-scale solar power and battery storage are falling. These lower costs are helping to keep electricity prices more stable, even as demand rises due to the growing number of data centers, the return of U.S. manufacturing, and the electrification of transport and heating.
As a thought experiment, my team gathered data on the U.S. energy market to estimate the potential deflationary effect that accelerating clean energy development could have on the American economy. At the end of our analysis, we found that accelerating renewable energy development nationwide could reduce inflation by 0.58 percentage points — meaning that if inflation were running at 4%, widespread clean energy would bring it down to 3.42%. This would save the average American family approximately $441 each year, or nearly three months’ worth of electricity bills.
While our model doesn’t completely capture all of America’s regional complexities regarding energy policy or resource availability, it shows what’s possible. Call it the “Clean Energy Dividend” — a measurable financial return Americans receive when renewable deployment expands.
These numbers are based on something that’s already happening in Texas, where building new clean energy projects is relatively easy. Since 2019, Texas has expanded its solar capacity by 729% and wind power by 49%, faster than any other state in the nation. These developments have added approximately 39,000 gigawatt-hours of solar, 41,000 gigawatt-hours of wind to the Texas grid. In that same time, Texas has also added 9,300 megawatts of battery capacity — a 8,941% increase.
To match Texas’ success, the rest of America would need to significantly ramp up its clean energy production. According to our analysis, the other 49 states combined would need to produce nearly 73% more renewable electricity than currently planned for 2025. That means that instead of adding 66,300 gigawatt-hours of clean power to the grid this year as projected, they’d need to add 114,700 gigawatt-hours. It’s an ambitious target, but one that would help keep costs down for consumers and businesses.
The deflationary impact would hit in two ways: from direct reductions in electricity bills and from lower costs for goods and services.
First, on direct reductions: The Electric Reliability Council of Texas market, otherwise known as ERCOT, is projected to experience a 12% decrease in wholesale electricity prices from 2024 to 2025; the rest of the United States, meanwhile, is expected to see a 3% increase in retail electricity prices during the same period. This creates a 15% gap between Texas and the national average.
The average American household uses about 10,791 kilowatt-hours of electricity annually, which currently costs approximately $1,779 per year. With a projected 3% national increase, this would rise to $1,828 in 2025. If prices fell by 12% as in Texas, however, the cost would decrease to $1,571, resulting in a direct savings of about $258 per household.
Second, beyond direct savings: Our analysis found that electricity costs constitute about 2.4% of all business expenses in the economy. When businesses pay less for electricity, they typically pass about 70% of those savings to consumers through lower prices. This translates to an additional $183 in annual savings per household on everyday goods and services.
Combining these figures, the total benefit per household would be $441 annually. In terms of inflation, the direct effect on electricity bills contributes 0.34%, and the indirect effect through price decreases on other goods contributes 0.24%. Together, they account for a 0.58% reduction in inflation.
Far more than the U.S. would like to admit, its economy remains highly susceptible to oil shocks. Nearly every economic recession in the U.S. since the 1940s has been preceded by a large increase in the price of fossil fuels. Similarly, all but three oil shocks have been followed by a recession. And while the price of oil is low now, this doesn’t guarantee it will be in the future. When energy costs rise sharply — whether from conflicts, production cuts, or supply chain disruptions — the effects cascade through every sector of our economy.
Renewable energy serves as a powerful buffer against these inflationary pressures. That said, expanding renewable energy faces challenges. Some communities oppose projects such as wind and solar farms due to concerns about land use, aesthetics, and environmental impacts, leading to delays or cancellations. At the national level, the Trump administration is doing everything it can to hinder investment and slow the growth of renewable energy infrastructure. These obstacles can impede progress toward a more stable and affordable energy future — even in Texas.
There, Republican lawmakers have introduced a wave of legislation aimed at imposing new fees and regulatory hurdles on renewable energy projects, restricting further development, and mandating costly backup power requirements. These measures could raise wholesale electricity prices by 14%, according to an analysis by Aurora Energy Research. Just as the rest of America should be emulating Texas’ success, Texas is busy unraveling it to resemble the rest of America.
Still, there are several factors that can speed renewable deployment nationwide: streamlining permitting processes, developing competitive electricity markets, ensuring sufficient transmission infrastructure, and passing supportive regulatory frameworks. While geography will always affect which resources are viable, every region has significant untapped potential — from geothermal in the West to solar in the South.
No matter where you stand on decarbonization and the fight against climate change, we should pay attention to any idea that can fight inflation, put money back in Americans pockets, create jobs, make our energy more secure, and help the environment all at once. The Clean Energy Dividend may not solve everything—but it’s about as close to a win-win-win as we’re going to find.
