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As Republicans’ budget priorities stack up, the numbers are starting to turn against America’s landmark climate law.

Since Donald Trump was reelected president, the climate community has retained a kind of fragile optimism about the Inflation Reduction Act, the historic climate law enacted in 2022 that Trump has vowed to repeal. The oft-repeated mantra is that the IRA is stimulating billions of dollars in investment in red districts, so why would Republicans want to put that at risk? Even if parts of the legislation were killed, surely some of it would remain intact.
But recent events have shifted the calculus. The ballooning price tag of Trump’s tax cut wishlist and preliminary budget negotiations on the Hill are pointing toward a budgetary showdown in which many of the law’s benefits could become fiscal casualties. D.C. veterans, including former GOP Hill staff, say that even the most bipartisan parts of the IRA could be sacrificed.
The reason has to do with the rules of budget reconciliation, the process Republicans in the House and Senate will use to carry out Trump’s agenda over the next several months and the same process Democrats used to pass the Inflation Reduction Act. One of Trump’s biggest legislative priorities is extending the 2017 Tax Cuts and Jobs Act, much of which expires at the end of this year. He also wants to make good on campaign promises to eliminate taxes on tips, overtime pay, and Social Security, and remove the cap on the state and local tax liability deductions.
To do this through the normal legislative process would subject the bill to a potential filibuster in the Senate, which would require 60 votes to override, a margin Senate Republicans lack. Budget reconciliation, however, requires only a simple majority. But there’s a catch: The bill can only contain policies that modify federal spending or revenues. It cannot contain a single provision that doesn’t pertain to the federal budget. And before lawmakers can decide what policies to put in it, they must agree on how much the bill will affect the federal budget. Once they set that topline number, they can’t change it.
“Reconciliation math is at least as important as the merits of reconciliation policies,” Alex Flint, executive director of the Alliance for Market Solutions, told Heatmap. Flint was previously a Republican staff director on the Senate Energy and Natural Resources Committee and top government affairs executive at the Nuclear Energy Institute. “I think a lot of people with specific interests in the tax code fail to look at the scale of the issue that tax writers have to deal with,” he said, adding that whether IRA money has been spent in a given district will probably be a “second or third order factor” in that representative’s vote.
Congress is still at the beginning of the reconciliation process. The next step is for the House and Senate to negotiate a topline number and issue instructions to the committees that will write the final bill on the levels of spending they’re allowed to include. That’s where the punishing math for the IRA comes in. The Congressional Budget Office, as well as third-party groups like the Tax Foundation and the Penn Wharton Budget Model, have estimated that an extension of the 2017 tax cuts would cost between $3.7 and $4.5 trillion through 2034. If all of Trump’s additional proposed tax cuts were enacted, the cost would jump to $6.8 trillion, according to Penn Wharton.
The dollar amount assigned to each committee is a ceiling, and it’s calculated on a net basis. So if the Ways and Means committee, which oversees tax legislation, is assigned a $4.5 trillion deficit ceiling, as it was in the version of the reconciliation instructions that recently passed the House, it’s going to have to find several trillion dollars worth of spending programs to cut. Fully repealing the Inflation Reduction Act’s green energy tax credits — which, according to new modeling from the nonpartisan Tax Foundation, would raise about $850 billion — will start to look harder to avoid.
In a recent talk hosted by the American Enterprise Institute, Jason Smith, a representative from Missouri and Chairman of the Ways and Means Committee, indicated that his party was committed to achieving Trump’s entire agenda through reconciliation. “These are items that he campaigned on, and these are items that will be addressed in any tax package that we move forward on,” he said.
Tax credits related to electric vehicles and green buildings are already almost certainly on the chopping block, but cutting those would raise just $300 billion, according to the Tax Foundation. Lawmakers have other options to achieve significant deficit reductions without fully eliminating the IRA, however. The Tax Foundation’s analysis found that Congress could preserve the nuclear power production tax credit and the carbon capture tax credit — two IRA provisions many Republicans support — as well as a stripped-down version of the renewable energy production tax credit and still raise a respectable $750 billion.
Alex Brill, a former Republican chief economist to the Ways and Means Committee and current fellow at the American Enterprise Institute, told Heatmap that we might see efforts to “rightsize” or “reform” certain tax credits rather than repeal them. Lawmakers could keep the clean electricity tax credits in place for a few more years as an apparent compromise, for example, but phase them out in 2029 or 2030, which is when the Congressional Budget Office estimates they’ll start to be more heavily utilized, and therefore more expensive.
“There’s this possibility that they may be looking at the timing and the duration of some of these provisions,” Brill said.
The IRA prescribes no end date for those credits, which as of now will stay in place until U.S. electricity emissions fall to 25% of their 2022 levels. Jason Clark, the former chief strategist at the American Clean Power Association, told Jael in October that an earlier phase-out would drastically undercut U.S. renewables deployment. “I don’t think a lot of folks appreciate just how long-range some of this planning is — how long it takes to permit something, how long it takes to figure out the interconnection queue. Companies aren’t just thinking, what are we going to build this year? They’re thinking, what will be put online in 2035? So if the government changes the stability of that, companies start to pull back.”
There is another scenario on the table that could save a significant chunk of the IRA, but it would come with its own nontrivial drawbacks.
Republican leaders in the Senate are trying to change the baseline against which all of these budget calculations are made. They argue that the tax cut extensions should be viewed as avoiding a tax increase, not enacting a new tax cut. By this logic, the extensions don’t cost anything, and $6.8 trillion in total tax cuts looks more like $2.8 trillion. That would give Republicans more room to increase spending on a range of other priorities, including defense and immigration enforcement, without having to make tough trade-offs.
This has never been done before, and to call it controversial would be an understatement. Deficit hawks on both sides of the aisle oppose the maneuver, calling it a “gimmick” and “magic math.” A recent Politico article declared that moving to a current policy baseline approach would “break the Senate, upend the federal budget process and explode the national debt.”
Before Republicans can move ahead, they need guidance from the Senate Parliamentarian, an advisor to the Senate tasked with interpreting the rules that govern the body. If the Parliamentarian doesn’t approve, the Senate is technically allowed to ignore or fire her. But this would create a new political firestorm.
Flint said that however this baseline debate plays out will tell us how much danger the IRA is facing. Brill had a slightly different perspective. He said he would expect Congress to set the topline budget resolution numbers lower if it moves ahead with this fuzzy math. But he agreed that assuming the IRA will be saved by its Republican beneficiaries fails to see the whole picture.
“They will be looking at the revenue consequences of changes, and they’ll be looking at the efficiency of these policies,” Brill said. “Are they operating as intended? Are they the size and scope and scale that seem reasonable and appropriate to lawmakers? I think they’re going to be thinking about this in a lot of different dimensions.”
While some oil and gas majors such as Exxon and Occidental have lobbied the Trump administration to keep at least some of the IRA in place, other fossil fuel industry players are trying to convince lawmakers that the clean energy tax credits do more harm than good. More than two dozen energy executives penned a letter to House and Senate leaders last week asking for a full repeal, arguing that the subsidies encourage “less efficient production,” raise costs for consumers, and increase the national debt.
But renewable energy researchers at the Rhodium Group and Energy Innovation published modeling last week making the opposite case. Rhodium found that rollbacks of power plant and vehicle emissions rules, combined with repeal of the IRA tax credits, would increase annual household energy costs by $111 to $184 in 2030, compared to keeping the law as it is. The modelers also found that energy spending throughout the industrial sector would increase by $8 billion to $14 billion from 2030 to 2035. Energy Innovation, which also modeled repeal of key tax credits, found this would lead to higher energy bills, as well as nearly 800,000 job losses in 2030.
Some D.C. figureheads are still bullish that full repeal of the IRA is unlikely. Xan Fishman, senior managing director of the energy program at the Bipartisan Policy Center, told Heatmap he’s heard the argument that Republicans’ magic math could help the IRA, but he’s not sure there’s much there, there. “I do think that there’s strong momentum for keeping the tax credits, and honestly, I think that’s true regardless of whatever budgetary baseline they use,” he said.
Earlier this month, 21 House Republicans came out in bold, public defense of the law. This likely does not reflect the level of support latent in the party, however. Fishman said that many of the tax credits in the law historically had bipartisan support, before the Inflation Reduction Act “painted them with a partisan brush.”
“I think at the end of the day, that is actually really relevant — the fact that so many members have co-sponsored or sponsored some version of these tax credits in the past,” Fishman said.
It’s too soon to judge whether Republican support for the IRA means anything, Josh Freed, senior vice president of the climate and energy program at Third Way, told Heatmap. “IRA is uncertain until the dust settles,” he said. “It is hard to know what trade-offs are going to be asked for by the authors and by different factions within the Republican caucus until decisions on whether there needs to be pay-fors, and how much, are made.”
The timeline for when the Republican caucus will make those decisions — and set the rules of the game — is hard to predict. In that talk hosted by the American Enterprise Institute, Congressman Smith said the plan was to get the final reconciliation bill on Trump’s desk before Memorial Day.
Editor’s note: This story has been updated to correct the emissions reduction target for the clean electricity tax credit in the IRA.
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Robotaxis are more likely to be EVs, and that’s not a coincidence.
Here in Los Angeles, the hot new thing in parenting is Waymo. One recent article argued that driverless electric vehicles have become the go-to solution for overscheduled parents who can’t be everywhere at once. No time to drive the kid to school dropoff or to practice? Hire a rideshare, preferably one without a potentially problematic human driver.
Perhaps it’s fitting that younger Americans, especially, are encountering electric cars in this way. Over the past few years, plenty of headlines have declared that teens and young adults have fallen out of love with the automobile; they’re not getting their driver’s licenses until later, if at all, and supposedly aren’t particularly keen on car ownership compared to their parents and grandparents. Getting around in a country built for the automobile leaves them more reliant on the rideshare industry — which, it so happens, is a place where the technological trends of electric and autonomous vehicles are rapidly converging.
This isn’t the way most people, myself included, talk about the EV revolution. That discourse typically runs through the familiar lens of our personal vehicles — which, it should be noted, Americans still lease or buy in the millions. In that light, EVs are struggling. Since buyers raced to scoop up electric cars in September before the federal tax credit lapsed, sales have slowed. Automakers have canceled or delayed numerous models and pivoted back to combustion engines or hybrids in response to the hostile Trump-era environment for selling EVs. While the world has carried on with electrification, America has backslid.
While all this was happening, however, the rideshare industry was accelerating in the opposite direction. Waymo’s fleet of autonomous vehicles is all-electric, currently made up of Jaguar I-Pace SUVs. Uber just invested more than $1 billion in Rivian as part of a plan to add thousands of the brand’s new R2 EVs to its fleet of electric robotaxis. Tesla’s moves are particularly telling. Elon Musk is still selling plenty of normal, human-driven Model Y and Model 3 EVs to make some money for the moment, but the company’s future prospects are all-in on the Cybercab, a two-seater robotaxi that would never be driven by a person. Who’d buy such a thing? Rideshare companies — or, perhaps, people see the Cybercab as a passive income machine that shuttles their neighbors around town whenever they’re not riding in it.
Human-driven rideshare fleets are quickly electrifying, too. Uber now allows riders to request an EV explicitly, an option that has been growing in popularity, especially as rising gas prices make electric rides more appealing. The company has been offering thousands of dollars of incentives to drivers who want to buy an EV, a program that expanded nationwide this month. EV-maker Fisker went bankrupt and folded, but its orphaned Ocean vehicles are roaming New York City as rideshare cars. Sara Rafalson of the charging company EVgo recently told me that rideshare already accounts for a quarter of the energy it distributes.
Yes, gasoline carries certain advantages for a taxi service — a gas-burning cab can drive all night with just momentary refueling stops, for example, whereas an EV must go out of commission during its occasional charging stops. Nevertheless, it’s clear that the rideshare industry is going electric.
That isn’t just because EVs have a futuristic vibe. There are technological reasons, too. Tesla and Rivian have designed their vehicles to be effectively smartphones on wheels, which makes them ideally suited for robotaxis. EVs have plenty of battery power on hand to meet all the computational demands of self-driving. Plus, electric power is particularly efficient for stop-and-go urban driving.
On the EV side, the business case for electric robotaxis is particularly compelling. One reason electric cars have struggled with everyday Americans is that it’s more difficult for an individual to stomach the higher upfront cost of an EV to enjoy its longer-term rewards. That’s less true for a business, whose accountants know EVs mean less long-term maintenance.
In the case of the rideshare economy, EVs are becoming the clear choice even though they’re owned by individual drivers. While the EV purchasing tax credit is gone for individuals, drivers can get financial help from a company like Uber to purchase an EV, which allows them to insulate themselves from the volatility of gas prices and reduce their regular maintenance schedule. They can also charge strategically around their taxi trips; robotaxi fleets often concentrate their recharging to the overnight hours when electricity is cheapest.
There is plenty of evidence that the “Gen Z doesn’t want to own cars” narrative is as reductive and oversimplified as you’d think. Younger generations are interested in cars — and in electric cars, in particular — but they’re often put off by the soaring costs of owning and maintaining a vehicle. As EV prices continue to fall, you can expect EV adoption to accelerate among Gen Z and millennial drivers.
In the meantime, those folks don’t have to buy an EV to join the EV age. It’s getting more and more likely that the car that drives you to the airport will be an EV — and more likely that riders will opt for electric if given the choice.
$4 of gasoline will actually get you pretty far these days.
Everyone’s mad about high oil prices, but are they doing anything about it? With around 11 million barrels per day (about a tenth of global production) shut in, and thus missing from the global oil market, someone has to be using less of it. Maybe it’s petrochemical plants that run on tight margins slowing down. Maybe it’s European airlines cancelling flights.
At least so far, it’s probably not American drivers.
“In the U.S. we’re seeing an indifference, in terms of what we can see from consumption numbers,” David Doherty, head of natural resources research at BloombergNEF, told me on the sidelines of the research group’s annual summit last week. The Energy Information Administration’s proxy for gasoline consumption, “product supplied of finished motor gasoline,” shows no dramatic change following the beginning of the war or subsequent spike in oil prices.
Gas prices in the United States sit at $4.11 per gallon according to AAA, compared to $3.15 a year ago. But even in the context of the almost $5 per gallon in 2022 and the $4.11-ish gas hit in the summer of 2008, the impact on actual households is likely more mild.
“$4 now is very different to $4 five years ago. And it's definitely different to $4 in 2008, which is when the last price spikes came through,” Doherty said. “$4 doesn't get you a coffee now. $4 a decade ago got you coffee plus oat milk.”
For one, a dollar is hardly a dollar anymore. There’s been higher than typical inflation since 2022, and a substantial rise in overall prices since 2008. This means that a dollar of gasoline (or even $4) is taking up a smaller portion of American consumer spending than it has in the past.
Looking back even further, the American auto fleet has gotten more efficient, meaning that drivers are getting more miles per gallon — and thus miles per dollar — than they were in the past. And that’s not even taking into account the rise of electric vehicles, which allow drivers to opt out of gasoline price volatility altogether.
Ironically, a big chunk of the credit comes from the now essentially scrapped Corporate Average Fuel Economy standards — themselves a response to the 1973 oil shock and designed to ease the American auto fleet’s dependency on fuels with volatile prices set by the global market by ratcheting up fuel economy over time. Then in 2007, President George W. Bush signed into law the first major tightening of CAFE standards in nearly 30 years.
“CAFE standards — which have just been neutered — ultimately have helped,” Doherty told me, referring to the Trump administration’s successful efforts to undo further fuel economy progress under the Obama and Biden administrations.
Overall, the U.S. economy has also gotten less “oil intensive” — we simply use less oil per dollar of economic activity than we used to. Since 1970, oil consumption has gone up by about 20%, while the size of the economy as measured in GDP has more than quadrupled.
When it comes to how the changing price of oil, and thereby gasoline, affects drivers, it’s a little trickier. I decided to calculate the “miles per dollar” on an annual basis, and then conservatively estimated how fleet efficiency would have increased by now.
To do this, I looked at the average miles per gallon of the U.S. car fleet and the “all grades” gasoline price for those same years. (“All grades” a little higher than the typical “regular” gas series, but the data goes back further.) The MPG data only goes back to 2024, so I conservatively projected it out to this year. While U.S. drivers are getting less out of their dollar than they did in 2024, they’re also going farther than they did in 2022 and 2008, the last time gas prices spiked dramatically.
I also wanted to get an idea of how much household spending is on gasoline. There’s no perfect way to do this with up-to-date data, but I was able to look at the relative importance of transportation fuel in the Consumer Price Index, which tells you the portion of spending on gasoline among the goods and services tracked by the Bureau of Labor Statistics. As expected, the relative importance rose dramatically in the 1970s and early 1980s, and hit a new high in 2007; in 2025, it fell close to its all time lows at just under 3%.
The Bureau of Labor Statistics also looks at annual household spending on gasoline. The latest data from 2024 agreed that it had been falling, from $2,805 in 2022, to $2,449 in 2023, and then $2,411 in 2024, but the 2025 data isn’t available yet.
Looking at more frequently updated data, the Republican staff of the Joint Economic Committee estimated that spending in February on “gasoline and other energy goods” was just over 1.9% of all personal consumption, a more than 0.2 percentage point decline from a year ago. This was, of course, before gasoline prices soared in March and into April.
“If you were to put [gasoline] beside the cost of your rent, for example, it's becoming a much smaller slice of your outlays,” Doherty said. This is the now-abandoned fuel efficiency standards actually working, Doherty said. “It's a different share of your budget. It's a more efficient car, and that’s through design.”
This also helps explain why in the United States, we’re not seeing the “demand destruction” that should accompany a contraction in oil supply, where consumers cut back consumption in response to high prices.
But with lines of empty tankers queuing up at the United States’ Gulf Coast petroleum export complex, looking to bring American crude to markets that can’t get their hands on oil from the Persian Gulf, prices may still have a way to go. Drivers in the United States are now in a barrel-for-barrel competition with the rest of the world.
On China’s fossil fuel controls, Maine data centers, and a faster NRC
Current conditions: Nearly two dozen states from Texas to Minnesota are bracing for days of thunderstorms, tornadoes, hail, and winds up to 70 miles per hour • Japan is deploying 1,400 firefighters to battle a wildfire in Iwate prefecture that has forced at least 3,000 people to evacuate • While it’s nearly 50 degrees Fahrenheit and sunny today in Chernobyl, Ukraine, exactly 40 years ago yesterday the weather worsened the world’s worst nuclear accident by blowing radiation from the melted-down reactor.
The Trump administration has dismissed every member of the independent board that oversees the National Science Foundation. In what The New York Times described as a “terse email” sent Friday afternoon, members of the 25-member National Science Board were told their position was “terminated, effective immediately.” Willie E. May, a terminated board member and a vice president at Morgan State University, told the newspaper: “I am deeply disappointed, though I cannot say I am entirely surprised. I have watched the systematic dismantling of the scientific advisory infrastructure of this government with growing alarm, and the National Science Board is simply the latest casualty.” The move to seize tighter control over funding for scientific research comes two months after the Environmental Protection Agency repealed the legal finding that underpins all federal climate regulations and days after the Department of Health and Human Services nixed publication of a study about the safety of COVID-19 vaccines.
Meanwhile, a top Republican in Congress has confirmed the limits of President Donald Trump’s bid to cap pay at the Tennessee Valley Authority. The White House’s push to limit compensation at the nation’s largest public power utility to $500,000 only applies to the chief executive, Representative Chuck Fleischmann, Republican from Tennessee, told The Knoxville News Sentinel. The White House sought to fire TVA CEO Don Moul last year, but ultimately backed down.

Beijing has laid out plans for tighter controls over fossil fuel use and greater oversight of heavy emitters in what experts told Carbon Brief was “a signal of China’s ongoing commitment to climate action and bridging policy” between the government’s national and sectoral five-year plans. The policy document, totaling nearly 2,800 words when translated into English, is what’s known as a “guiding opinion,” and “is not strictly binding, it bears the stamp of the two highest bodies in China’s political system, conveying a strong sense of authority,” wrote Anika Patel, the China editor at Carbon Brief, noting that “this is the first high-level document to explicitly link decarbonisation efforts with energy security and industrial development.” As Qi Qin, a China analyst at the Centre for Research on Energy and Clean Air, told Heatmap’s Katie Brigham last month: “I don’t think China is creating these technologies as a niche climate experiment anymore. They’re being folded into a broader industrial strategy. I think that the more important question is which of them are moving into real deployment now, and which are still at the stage of strategic signaling.”
At roughly the same time, the Chinese government has published an atlas of deep-sea mineral deposits as the People’s Republic looks to ramp up its ambitions to harvest critical metals from the ocean floor.
At the start of this month, I told you Maine was poised to become the first state to ban construction of data centers, at least temporarily. Not anymore. On Friday, Governor Janet Mills vetoed the bill, the Portland Press-Herald reported. In her message to the legislature, the Democrat said that, while a moratorium “is appropriate given the impacts of massive data centers in other states on the environment and on electricity rates,” the “final version of this bil fails to allow for a specific project in the Town of Jay that enjoys strong local support from its host community and region.” The 2023 closure of Androscoggin Mill, a pulp and paper plant, dealt what she called “a devastating blow” to the town, located roughly an hour and 20 minutes north of Portland, and the server farm would help “promote reinvestment and job creation at the former mill,” she said. Mills is locked in a heated race with left-wing populist Graham Platner for the Democratic nomination to take on Republican Senator Susan Collins this November.
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The British-listed green fertilizer company Atome is set to build a first-of-a-kind project in Paraguay, taking advantage of low-cost hydropower to produce ammonia using green hydrogen instead of natural gas. The firm’s final investment decision on the $665 million plant in Villeta, south of the capital of Asunción, comes as the Iran War disrupts fertilizer markets and drives up costs. “We’ve proven that you can actually close and finance an industrial-scale, green fertilizer facility,” chief executive Olivier Mussat told the Financial Times. “It’s never been done before.”
Duke Energy’s Robinson nuclear power plant in South Carolina just won the Nuclear Regulatory Commission’s approval to operate for 80 years as part of the fastest license renewal review in the agency’s history. The NRC cleared Unit 2 of the Robinson Steam Electric Plant — a single-unit pressurized water reactor — to operate for another 20 years. This, according to World Nuclear News, is the unit’s “second, or subsequent, license renewal: it received a 20-year renewal of its original 40-year license in 2004.” The NRC formally accepted the license renewal application for docketing on April 28, 2025, then completed the review within a 12-month timeframe. That’s six fewer months than the previous schedule, in accordance with an executive order Trump issued last year. “This milestone proves we can deliver results quickly without compromising safety,” NRC Chairman Ho Nieh said in a statement. “By focusing on essential factors for sustained nuclear power plant safety and applying lessons learned from past renewals, our team was able to work efficiently while maintaining their commitment to enabling timely safety decisions.”
TotalEnergies may be exiting offshore wind in the U.S. for the price of $1 billion from the Trump administration. But over in Kazakhstan, the French energy giant is expanding its wind footprint. While the landlocked Central Asian country doesn’t have much in the way of shores off of which to build turbines, it does have vast, windy steppelands. TotalEnergies plans to invest in a gigawatt of wind power and 600 megawatt-hours of battery storage, Renewables Now reported.