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A conversation with Matt Weiner on the Fix Our Forests Act and why the Senate needs to take action — now.
After the Los Angeles County wildfires in January, it seemed like the federal government was finally poised to do something about the decades of flawed forestry practices and land management policies that have turned the West into a tinderbox. On January 23, before the L.A. fires were even fully extinguished, the House of Representatives passed the Fix Our Forests Act on a bipartisan 279–141 vote, queuing up a bill that proponents say would speed and simplify forest and wildfire management projects that have gotten bogged down in a regulatory morass.
Then … not much happened. Though Republican Senators John Curtis of Utah and Tim Sheehy of Montana teamed up with Democrats John Hickenlooper of Colorado and Alex Padilla of California to write their own version of the Fix Our Forests Act for the Senate, the bill stalled after a summer spent focused on the reconciliation bill. Meanwhile, more wildfires made headlines.
Matt Weiner, the founder and CEO of the nonprofit advocacy group Megafire Action, wants to bring some urgency back. This week, the organization launched a six-figure ad campaign in Washington, D.C., aimed at spurring senators to get back to working on wildfire resilience and forestry reform. Though the bill’s approach is divisive — the House version drew initial pushback from more than 100 environmental organizations, including the Sierra Club, Natural Resources Defense Council, and League of Conservation Voters, for opening up large tracts of federal forest to logging, among other concerns — Weiner told me “there’s no huge substantive holdup in the Senate that is keeping it from getting to 60 votes.”
I caught up with Weiner this week to learn more about where things stand with the Fix Our Forests Act and talk through some of the bill’s more controversial regulatory rollbacks. Our conversation has been edited and condensed for clarity.
Catch our readers up: Why the Fix Our Forests Act, and why now?
We’re looking at a generational opportunity to change the way we do land management. This is the most significant change Congress has considered since the Healthy Forest Restoration Act, and maybe even since the original National Forest Act.
The smoke impacts of wildfires are killing more people than the flames. Wildfires are the most significant driver of PM 2.5 emissions growth in the country right now. The clean air community has done a fantastic job of reducing industrial emissions of PM 2.5, which has had real public health impacts, but those gains are in danger of vanishing because of the growth of wildfire smoke exposure.
Then there’s the climate. If you care about carbon emissions, this is a huge opportunity at a time when a lot of other climate issues seem to be on the backburner. The 2020 fire season in California — a particularly bad year — released enough carbon to undo 20 years of the state’s emissions reduction progress. The 2023 Canadian wildfires, if treated as a country, would have been the third-largest emitter in the world that year. And if you start thinking about Alaska and the Boreal burning in the way the West has been burning, it could potentially be game over for the climate. It’s important that people understand that this is an existential climate issue and that we have an opportunity to make progress in a bipartisan way.
You and I have chatted before — we first spoke about the Fix Our Forests Act almost a year ago, now. What’s happened in the past 12 months with the bill?
The bill passed the House right after the Los Angeles fires. The last time we spoke [in October 2024], the bill had passed the House in the previous Congress with a bipartisan margin. But this time, it got a much bigger bipartisan show of support: 64 Democrats and all the Republicans in the House.
The bill saw some changes and improvements to focus on the immediate needs in Los Angeles County [after the January 2025 fires] — things like improving the ability of a city like Los Angeles to gain access to Community Wildfire Defense Grant funding and improvements to the Wildfire Intelligence Center targeted at making sure it plays a role in helping local governments make decisions on where to place assets before a high risk event.
Then the bill went to the Senate, but instead of moving the House bill through, a group of senators came together to write a bipartisan version with some changes. Senator Curtis from Utah was the lead, along with Senators Padilla, Hickenlooper, and Sheehy. Their version included changes to the litigation section from the House bill, which had raised concerns among a lot of environmental organizations, as well as modifications to the permitting section. That earned the bill the support of more environmental organizations than the version from the House — they have the Nature Conservancy, the Environmental Defense Fund, the Audubon Society, and the National Wildlife Federation on board, as well as a lot of local organizations and wildfire groups like the Alliance for Wildfire Resilience.
But then a lot of the oxygen in the Senate was taken up by the reconciliation package. That put a pause on things through the August recess, and now they’re looking to hopefully mark up the bill during the October work period. We’re very optimistic about being able to get floor time. We think there’s a clear path to 60 votes in the Senate for this bill, and if there’s a good, constructive markup, it could be much more than that. There’s no substantive holdup as much as there is the ever-present fear of stasis and losing momentum. That’s why we launched an ad campaign with an eye toward building the urgency back up.
How did the ad campaign come together?
The idea was that this is a bipartisan issue, so where is the support? We didn’t need to launch a big persuasion campaign; we needed to highlight the absurdity of the fact that, eight months after Los Angeles, we still haven’t had any meaningful action from Congress. There is an opportunity before them that would make a big difference in wildfire policy writ large.
I’m interested in your focus on using “state-of-the-art science” and “new and innovative technologies” to address wildfires and forest health. What have you seen in this space that has made you excited?
The bill is about improving the planning and implementation of wildfire policy — especially mitigation work like treatment projects, but also in the built environment. A big cornerstone of that would be the creation of a new Wildfire Intelligence Center, which would use the most advanced technology to understand what our risk profile is on the ground across landscapes and jurisdictions. Right now, there is no one entity in government responsible for taking a comprehensive look at risk across landscapes, what we’re doing on the ground, and how that buys down risk.
At the same time, one of the things we’re negotiating is making sure that the Forest Service and the Department of Interior are positioned to work with some of the companies doing advanced modeling, detection, and tracking work — as opposed to having the government try to build its own clunky system. We’ve modeled it after successful efforts elsewhere in government, such as the Defense Innovation Unit and other Department of Defense and NASA programs that have been great at harnessing private sector innovation for government use. There’s also a new pilot program in the bill, in Section 303, that would create a pathway for the Forest Service to start identifying and piloting new technologies and give them a path to scale across the agency if they find that it helps them do the job better, faster, and cheaper.
The timber industry has collaborated with the Forest Service on fire suppression since the 1920s. In the decades since, “forest management” has at times been used as a euphemism for industry-friendly practices like tree thinning, which many ecologists say would allow invasive species and brush to flourish, and would actually worsen wildfires. How would cutting the red tape around “vegetation management activities” not be a handout to the timber industry?
We all know that the best tool for mitigation is good fire, prescribed fire, beneficial fire, and — where appropriate — managed fire, as well. Unfortunately, because we’ve taken fire out of these landscapes, forested landscapes in particular are so overgrown that you couldn’t introduce good fire even if you wanted to. So mechanical thinning has to be a part of this.
One of the tensions here is that the timber industry wants merchantable timber. They want the big trees, and in a lot of cases, those are the ones we want to keep in the ground with these projects. What we’re focused on is invasive species, overgrown areas, and dead trees from morbidity events like recent droughts so that we can reintroduce good fire at scale. If we all let it burn, like some have proposed, you’d end up with hundreds of thousands of acres of landscape burning at a time, like we saw in the [2021] Caldor fire, where nothing will grow back in a way we recognize for at least decades — and given climate change, maybe not ever.
It’s important to make sure that we don’t go back to the timber wars [of the 1980s and 1990s between environmentalists and loggers in the Pacific Northwest], but at the same time, we need to recognize that the biggest threat to our forests right now is catastrophic fire, not the timber industry. We want to deal with the threat at hand and make sure the pendulum that swung during the timber wars — for very good reason — against the timber industry comes back a little, but doesn’t swing too far in the wrong direction, either. The Senate bill strikes the right balance there.
A number of major environmental groups initially came out in opposition to the Fix Our Forests Act over numerous concerns, including that it erodes Endangered Species Act protections by exempting the Forest Service and BLM from the requirement to adjust land management policies as new information about how projects could affect threatened species arises. What is the other side of this tradeoff? How would limiting the consultation requirement advance the goal of reducing wildfires?
The biggest challenge right now is that, because of all of the regulatory hurdles, it can take upwards of a thousand days to get a project off the ground anywhere in the country. One great example of that is in the Angeles National Forest. They announced a fuel break maintenance strategy in 2020, but they were not able to get the requisite approvals until the start of December 2024. It took four years — and then the last of the permits that were most relevant to Altadena didn’t get approved until March, two months after the fire. There are very real consequences to this kind of delay, both for the environment and for human health and safety, that need to be taken into account.
If you take a step back and look at the bill, the main tool that it uses is not broad NEPA exemptions or writ-large changes in the law. It utilizes categorical exclusions, a method that has been used for energy projects in other areas and is increasingly sought after to advance targeted projects with public benefits.
One great example is the Tahoe categorical exclusion, on which a significant portion of this bill is based. It was a 10,000-acre CE created in 2016, which allowed for work that protected communities and ecosystems and got good fire on the ground. It’s work that directly saved South Lake Tahoe from the Caldor Fire. But one of the challenges right now is that the current level for CE is 3,000 acres, and when we’re talking about landscapes in forests that are hundreds of thousands of miles big and a fireshed that nationwide is 50 million acres, then 3,000 acres is not enough for it to be worth it for the Forest Service and Park Service and DOI officials to go through the CE process — which takes six months and is very rigorous.
But we also wanted to show restraint here for environmental purposes. We wanted to make sure that this was as targeted as it needed to be, and not overly expansive.
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“Old economy” companies like Caterpillar and Williams are cashing in by selling smaller, less-efficient turbines to impatient developers.
From the perspective of the stock market, you’re either in the AI business or you’re not. If you build the large language models pushing out the frontiers of artificial intelligence, investors love it. If you rent out the chips the large language models train on, investors love it. If you supply the servers that go in the data centers that power the large language models, investors love it. And, of course, if you design the chips themselves, investors love it.
But companies far from the software and semiconductor industry are profiting from this boom as well. One example that’s caught the market’s fancy is Caterpillar, better known for its scale-defying mining and construction equipment, which has become a “secular winner” in the AI boom, writes Bloomberg’s Joe Weisenthal.
Typically construction businesses do well when the overall economy is doing well — that is, they don’t typically take off with a major technological shift like AI. Now, however, Caterpillar has joined the ranks of the “picks and shovels” businesses capitalizing on the AI boom thanks to its gas turbine business, which is helping power OpenAI’s Stargate data center project in Abilene, Texas.
Just one link up the chain is another classic “old economy” business: Williams Companies, the natural gas infrastructure company that controls or has an interest in over 33,000 miles of pipeline and has been around in some form or another since the early 20th century.
Gas pipeline companies are not supposed to be particularly exciting, either. They build large-scale infrastructure. Their ratemaking is overseen by federal regulators. They pay dividends. The last gas pipeline company that got really into digital technology, well, uh, it was Enron.
But Williams’ shares are up around 28% in the past year — more than Caterpillar. That’s in part, due to its investing billions in powering data centers with behind the meter natural gas.
Last week, Williams announced that it would funnel over $3 billion into two data center projects, bringing its total investments in powering AI to $5 billion. This latest bet, the company said, is “to continue to deliver speed-to-market solutions in grid-constrained markets.”
If we stipulate that the turbines made by Caterpillar are powering the AI boom in a way analogous to the chips designed by Nvidia or AMD and fabricated by TSMC, then Williams, by developing behind the meter gas-fired power plants, is something more like a cloud computing provider or data center developer like CoreWeave, except that its facilities house gas turbines, not semiconductors.
The company has “seen the rapid emergence of the need for speed with respect to energy,” Williams Chief Executive Chad Zamarin said on an August earnings call.
And while Williams is not a traditional power plant developer or utility, it knows its way around natural gas. “We understand pipeline capacity,” Zamarin said on a May earnings call. “We obviously build a lot of pipeline and turbine facilities. And so, bringing all the different pieces together into a solution that is ready-made for a customer, I think, has been truly a differentiator.”
Williams is already behind the Socrates project for Meta in Ohio, described in a securities filing as a $1.6 billion project that will provide 400 megawatts of gas-fired power. That project has been “upsized” to $2 billion and 750 megawatts, according to Morgan Stanley analysts.
Meta CEO Mark Zuckerberg has said that “energy constraints” are a more pressing issue for artificial intelligence development than whether the marginal dollar invested is worth it. In other words, Zuckerberg expects to run out of energy before he runs out of projects that are worth pursuing.
That’s great news for anyone in the business of providing power to data centers quickly. The fact that developers seem to have found their answer in the Williamses and Caterpillars of the world, however, calls into question a key pillar of the renewable industry’s case for itself in a time of energy scarcity — that the fastest and cheapest way to get power for data centers is a mix of solar and batteries.
Just about every renewable developer or clean energy expert I’ve spoken to in the past year has pointed to renewables’ fast timeline and low cost to deploy compared to building new gas-fired, grid-scale generation as a reason why utilities and data centers should prefer them, even absent any concerns around greenhouse gas emissions.
“Renewables and battery storage are the lowest-cost form of power generation and capacity,” Next Era chief executive John Ketchum said on an April earnings call. “We can build these projects and get new electrons on the grid in 12 to 18 months.” Ketchum also said that the price of a gas-fired power plant had tripled, meanwhile lead times for turbines are stretching to the early 2030s.
The gas turbine shortage, however, is most severe for large turbines that are built into combined cycle systems for new power plants that serve the grid.
GE Vernova is discussing delivering turbines in 2029 and 2030. While one manufacturer of gas turbines, Mitsubishi Heavy Industries, has announced that it plans to expand its capacity, the industry overall remains capacity constrained.
But according to Morgan Stanley, Williams can set up behind the meter power plants in 18 months. xAI’s Colossus data center in Memphis, which was initially powered by on-site gas turbines, went from signing a lease to training a large language model in about six months.
These behind the meter plants often rely on cheaper, smaller, simple cycle turbines, which generate electricity just from the burning of natural gas, compared to combined cycle systems, which use the waste heat from the gas turbines to run steam turbines and generate more energy. The GE Vernova 7HA combined cycle turbines that utility Duke Energy buys, for instance, range in output from 290 to 430 megawatts. The simple cycle turbines being placed in Ohio for the Meta data center range in output from about 14 megawatts to 23 megawatts.
Simple cycle turbines also tend to be less efficient than the large combined cycle system used for grid-scale natural gas, according to energy analysts at BloombergNEF. The BNEF analysts put the emissions difference at almost 1,400 pounds of carbon per megawatt-hour for the single turbines, compared to just over 800 pounds for combined cycle.
Overall, Williams is under contract to install 6 gigawatts of behind-the-meter power, to be completed by the first half of 2027, Morgan Stanley analysts write. By comparison, a joint venture between GE Vernova, the independent power producer NRG, and the construction company Kiewit to develop combined cycle gas-fired power plants has a timeline that could stretch into 2032.
The Williams projects will pencil out on their own, the company says, but they have an obvious auxiliary benefit: more demand for natural gas.
Williams’ former chief executive, Alan Armstrong, told investors in a May earnings call that he was “encouraged” by the “indirect business we are seeing on our gas transmission systems,” i.e. how increased natural gas consumption benefits the company’s traditional pipeline business.
Wall Street has duly rewarded Williams for its aggressive moves.
Morgan Stanley analysts boosted their price target for the stock from $70 to $83 after last week’s $3 billion announcement, saying in a note to clients that the company has “shifted from an underappreciated value (impaired terminal value of existing assets) to underappreciated growth (accelerating project pipeline) story.” Mizuho Securities also boosted its price target from $67 to $72, with analyst Gabriel Moreen telling clients that Williams “continues to raise the bar on the scope and potential benefits.”
But at the same time, Moreen notes, “the announcement also likely enhances some investor skepticism around WMB pushing further into direct power generation and, to a lesser extent, prioritizing growth (and growth capex) at the expense of near-term free cash flow and balance sheet.”
In other words, the pipeline business is just like everyone else — torn between prudence in a time of vertiginous economic shifts and wanting to go all-in on the AI boom.
Williams seems to have decided on the latter. “We will be a big beneficiary of the fast rising data center power load,” Armstrong said.
On billions for clean energy, Orsted layoffs, and public housing heat pumps
Current conditions: A tropical rainstorm is forming in the Atlantic that’s forecast to barrel along the East Coast through early next week, threatening major coastal flooding and power outages • Hurricane Priscilla is weakening as it tracks northward toward California • The Caucasus region is sweltering in summer-like heat, with the nation of Georgia enduring temperatures of up to 93 degrees Fahrenheit in October.
Base Power, the Texas power company that leases batteries to homeowners and taps the energy for the grid, on Tuesday announced a $1 billion financing round. The Series C funding is set to supercharge the Austin-based company’s meteoric growth. Since starting just two years ago, Base has deployed more than 100 megawatts of residential battery capacity, making it one of the fastest growing distributed energy companies in the nation. The company now plans to build a factory in the old headquarters of the Austin American-Statesman, the leading daily newspaper in the Texan capital. The funding round included major investors who are increasing their stakes, including Valor Equity Partners, Thrive Capital, and Andreessen Horowitz, and at least nine new venture capital investors, including Lowercarbon, Avenir, and Positive Sum. “The chance to reinvent our power system comes once in a generation,” Zach Dell, chief executive and co-founder of Base Power, said in a statement. “The challenge ahead requires the best engineers and operators to solve it and we’re scaling the team to make our abundant energy future a reality.”
The deal came a day after Brookfield Asset Management, the Canadian-American private equity giant, raised a record $23.5 billion for its clean energy fund. At least $5 billion has already been spent on investments such as the renewable power operator Neoen, the energy developer Geronimo Power, and the Indian wind and solar giant Evren. “Energy demand is growing fast, driven by the growth of artificial intelligence as well as electrification in industry and transportation,” Connor Teskey, Brookfield’s president and renewable power chief, said in a press release. “Against this backdrop we need an ‘any and all’ approach to energy investment that will continue to favor low carbon resources.”
Orsted has been facing down headwinds for months. The Danish offshore wind giant has absorbed the Trump administration’s wrath as the White House deployed multiple federal agencies to thwart progress on building seaward turbines in the Northeastern U.S. Then lower-than-forecast winds this year dinged Orsted’s projected earnings for 2025. When the company issued new stock to fund its efforts to fight back against Trump, the energy giant was forced to sell the shares at a steep discount, as I wrote in this newsletter last month. Despite all that, the company has managed to raise the money it needed. On Wednesday, The Wall Street Journal reported that Orsted had raised $9.4 billion. Existing shareholders subscribed for 99.3% of the new shares on offer, but demand for the remaining shares was “extraordinarily high,” the company said.
That wasn’t enough to stave off job cuts. Early Thursday morning, the company announced plans to lay off 2,000 employees between now and 2027. The cuts represented roughly one-quarter of the company’s 8,000-person global workforce. “This is a necessary consequence of our decision to focus our business and the fact that we'll be finalizing our large construction portfolio in the coming years — which is why we'll need fewer employees,” Rasmus Errboe, Orsted’s chief executive, said in a statement published on CNBC. "At the same time, we want to create a more efficient and flexible organization and a more competitive Orsted, ready to bid on new value-accretive offshore wind projects.”
California Governor Gavin Newsom. Mario Tama/Getty Images
California operates the world’s largest geothermal power station, The Geysers, and generates up to 5% of its power from the Earth’s heat. But the state is far behind its neighbors on developing new plants based on next-generation technology. Most of the startups racing to commercialize novel methods are headquartered or building pilot plants in states such as Utah, Nevada, and Texas. A pair of bills to make doing business in California easier for geothermal companies was supposed to change that. Yet while Governor Gavin Newsom signed one statute into law that makes it easier for state regulators to certify geothermal plants, he vetoed a permitting reform bill to which the industry had pegged its hopes. “Every geothermal developer and energy org I talked to was excited about this bill,” Thomas Hochman, who heads the energy program at the right-leaning Foundation for American Innovation, wrote in a post on X. “The legislature did everything right, passing it unanimously. They even reworked it to accommodate certain classic California concerns, such as prevailing wage requirements.”
In a letter announcing his veto, the governor claimed that the law would have added new fees for geothermal projects. But an executive at Zanskar — the startup that, as Heatmap’s Katie Brigham reported last month, is using new technology to locate and tap into conventional geothermal resources — called the governor’s argument “weak sauce.” Far from burdening the industry, Zanskar co-founder Joel Edwards said on X, “this was a clean shot to accelerate geothermal today, and he whiffed it.”
Last month, Generate Capital trumpeted the appointment of its first new chief executive in its 11-year history as the leading infrastructure investment firm sought to realign its approach to survive a tumultuous time in clean-energy financing. Less publicly, as Katie wrote in a scoop last night, it also kicked off company-wide job cuts. In an interview with Katie, Jonah Goldman, the firm’s head of external affairs, said the company “grew quickly and made some mistakes,” and now planned to lay off 50 people.
Generate once invested in “leading-edge technologies,” according to co-founder Jigar Shah, who left the firm to serve as the head of the Biden-era DOE Loan Programs Office. That included investments in projects involving fuel cells, anaerobic digesters, and battery storage. But from the outside, he said on the Open Circuits podcast he now co-hosts, the firm appears to have moved away from taking these riskier but potentially more lucrative bets. “They ended up with 38 people in their capital markets team, and their capital markets team went out to the marketplace and said, Hey, we have all this stuff to sell. And the people that they went to said, Well, that’s interesting, but what we really would love is boring community solar.”
Three of New England’s largest public housing agencies signed deals with the heat pump manufacturer Gradient to replace aging electric heaters and air conditioners with the company’s 120-volt, two-way units that provide both heating and cooling. The Boston Housing Authority, New England’s largest public housing agency, will kick off the deal by installing 100 all-weather, two-way units that both heat and cool at the Hassan Apartments, a complex for seniors and adults with disabilities in Boston’s Mattapan neighborhood. The housing authorities in neighboring Chelsea and Lynn — two formerly industrial, working-class cities just outside Boston — will follow the same approach.
Public housing agencies have long served a vital role in helping to popularize new, more efficient appliances. The New York City Housing Authority, for example, is credited with creating the market for efficient mini fridges in the 1990s. Last year, NYCHA — the nation’s largest public housing system — signed a similar deal with Gradient for heat pumps. Months later, as Heatmap’s Emily Pontecorvo exclusively reported at the time, NYCHA picked a winner in its $32 million contest for an efficient new induction stove for its apartments.
Three chemists — Susumu Kitagawa, Richard Robson, and Omar Yaghi — won the Nobel Prize for “groundbreaking discoveries” that "may contribute to solving some of humankind’s greatest challenges, from pollution to water scarcity.” Just a few grams of the so-called molecular organic frameworks the scientists pioneered could have as much surface area as a soccer field, which can be used to lock gas molecules in place in carbon capture or harvest freshwater from the atmosphere.
The country’s underwhelming new climate pledge is more than just bad news for the world — it reveals a serious governing mistake.
Five years ago, China’s longtime leader Xi Jinping shocked and delighted the world by declaring in a video presentation to the United Nations that his country would peak its carbon emissions this decade and achieve carbon neutrality by 2060. He tried to rekindle that magic late last month in another virtual address to the UN, announcing China’s updated pledge under the Paris Agreement.
This time, the reaction was far more tepid. Given the disastrous state of American climate policy under President Donald Trump, some observers declared — as the longtime expert Li Shuo did in The New York Times — that China is “the adult in the room on climate now.” Most others were disappointed, arguing that China had merely “played it safe” and pointing out the new pledge “falls well short” of what’s needed to hit the Paris Agreement’s targets.
Yet China’s dithering is more than just an environmental failure — it is a governing mistake. China’s weak climate pledge isn’t just bad news for the world; it shows an indecisive leadership that is undermining its country’s own competitiveness by sticking with dirty coal rather than transitioning rapidly to a cleaner future.
The new pledge — known in UN jargon as a nationally determined contribution, or NDC — reveals a disconnect between the government’s official position and the optimistic discourse that now surrounds China’s clean energy sector. China today is described as the world’s first electrostate; it stands at the vanguard of the solar and EV revolution, some say, ready to remake the world order against a coalition of petrostate dinosaurs.
The NDC makes it obvious that the Chinese government does not yet view itself in such a fashion. China might look like an adult, but it more closely resembles a gangly teenager who is still getting used to their body after a growth spurt. As the analyst Kingsmill Bond recently put it on Heatmap’s podcast Shift Key, Chinese clean tech manufacturers have unlocked a cleaner and cheaper path to economic development. It isn’t yet clear that China is brave enough to commit to it. If China is the adult in the room, in other words, we’re screwed.
Let’s start by giving credit where due. For a country that had never offered an absolute emissions reduction target before, Xi’s promise — to cut emissions by 7% to 10% by 2035 — is a kind of progress. But observers expected China to go much further. Researchers at the University of Maryland and the Center for Research on Clean Air, for example, each suggested that emissions could decline by roughly 30% by that year. Only a reduction of this magnitude would actually keep the planet on a trajectory sufficiently close to the Paris Agreement’s goal to limit warming to 2 degrees Celsius.
Many inside China’s policy apparatus considered such ambitious cuts to be infeasible; for instance, Teng Fei, deputy director of Tsinghua University’s Institute of Energy, Environment and Economy, described a 30% reduction as “extreme.” Conversations with knowledgeable insiders, however, suggested a headline reduction of up to 15% was viewed as plausible. In that light, the decision to commit a mere 7% to 10% can only be seen as disappointing.
The NDC obviously represents a floor and not a ceiling, and China has historically only made climate promises that it knows it will keep. But even then, China’s leadership has given itself tremendous wiggle room. This can be seen in part by what is not in Xi’s pledge: any firm commitment about when, exactly, China’s emissions will peak. (His previous pledge only said that it would happen in the 2020s.) While it’s quite possible that 2024 or 2025 will end up being the peak, as some expect, the new pledge creates a perverse incentive to delay and pollute more now. The speech also contained little on non-CO2 greenhouse gases such as methane and nitrous oxide — which, given China’s previous commitment to reach net zero on all warming gases by 2060, seems like a significant blind spot.
Other commitments are only impressive until you scratch the surface. Xi pledged that China would install 3,600 gigawatts of solar and wind capacity by 2035. That may sound daunting: The United States, the world’s No. 2 country for renewables capacity, has a combined 400 gigawatts of solar and wind. But China already has about 1,600 gigawatts installed. So China’s promise, in essence, is to add around 200 gigawatts of solar and wind each year until 2035 — and while that would be a huge number for any other country, it actually represents a significant slowdown for China. The country added 360 gigawatts of wind and solar combined last year, and has already installed more than 200 gigawatts of solar alone in the first eight months of this one. In this light, China’s renewables pledge seems ominous.
More distressingly for climate action, it is unclear if this comparatively slower pace of clean electricity addition will actually allow China’s electricity sector to decarbonize. As the electricity analyst David Fishman has noted, China’s overall electricity demand grew faster than its clean electricity generation last year, leaving a roughly 100 terawatt-hour gap — despite all that new solar and wind (and despite 16 gigawatts of new nuclear and hydroelectric power plants, too). Coal filled this gap. Last year, China began construction of almost 100 gigawatts of new coal plants even though its existing coal fleet already operates less than half of the time. These new plants represented more than 90% of the world’s new coal capacity in 2024.
China’s climate strategy — like every other country’s — requires electrifying large swaths of its economy. If new renewables diminish to only 200 gigawatts a year, then it seems implausible that its renewable additions could meet demand growth — let alone eat away substantial amounts of coal-fired generation — unless its economic growth significantly slows.
Yet the news gets worse. Taken alone, the NDC’s weakness may speak of mere caution on China’s part, yet a number of policy changes to China’s electricity markets and industrial policy over the past year suggest its government is now slow-walking the energy transition.
In 2024, for instance, China started making capacity payments to coal-fired power plants. These payments were ostensibly designed to lubricate a plant’s economics as it shifted from 24/7 operation to a supporting role backing up wind and solar. Yet only coal plants — and not, for instance, batteries — were offered these funds, even though batteries can play a similar role more cheaply and China already makes them in scads. Even more striking, coal plants have been pocketing these funds without changing their behavior or even producing less electricity
At the same time, China’s central leadership has cut the revenues that new solar and wind farms receive from generating power. New solar and wind plants are now scheduled to receive less than the same benchmark price that coal receives — although the details of that discount vary by province and remain uncertain in most of them. Observers hope that this lower price, along with a more market-based dispatch scheme, will eventually allow renewables-heavy electricity systems to charge lower rates to consumers and displace more expensive coal power. However, there’s little clarity on if and when that will happen, and in the meantime, new renewables installations are plummeting as developers wait for more information to emerge.
Chinese industrial policy is exacerbating these trends. The world has long talked about Chinese overcapacity. Now even conversation in the Western media has progressed to discussing “involution” — a broader term that centers on the intensive competition that characterizes Chinese capitalism (and society). It suggests that Chinese firms are competing themselves out of business.
The market-leader BYD, for instance, has become synonymous with the Chinese battery-powered auto renaissance, but there are fears that even this seeming titan might have corrupted itself on the way. The company has larded an incredible amount of debt onto its books to fuel its race to the top of the sales charts; now, murmurs abound that the firm might be “the Evergrande of EVs” — a reference to the housing developer that collapsed into bankruptcy earlier this decade with hundreds of billions of dollars in debt. In recent months, BYD’s engine seems to be sputtering, with sales dropping in September 2025 compared with last year.
As such, the government has come in to try to negotiate new terms of competition so that firms do not end up doing irreparable harm to themselves and their future prospects. It is doing so in other sectors as well: In solar, it has tried to create a cartel of polysilicon manufacturers, a solar OPEC of sorts, to make sure that the pricing of that key input to the photovoltaic supply chain is at a level where the producers can survive.
This may all seem positive — and there is certainly an argument that the government could play a role in helping these new sectors negotiate the difficult waters that they find themselves in. But I interpret these efforts as further slow-walking of the energy transition. A slight reframing can help to understand why.
What is literally happening in these meetings? The government is bringing private actors into the same room to bang their heads together and deal with the reality that the current economic system is not working, largely because of intense competition — a problem likely best solved by forcing some of the firms and production capacity to shrink. Firms are unprofitable because exuberant supply has zoomed past current demand, and the country’s markets and politics are not prepared to navigate the potentially needed bankruptcies or their fallout. So the government is intervening, designing actions to generate the outcomes it desires.
Yet there is something contradictory about the government’s approach. A decarbonized world, after all, will be a world without significant numbers of internal combustion vehicles, so traditional automakers will eventually need to shut down or shift into EVs — yet their executives aren’t being dragged in for the same scolding. Likewise, a decarbonized world will be a world without as many coal mines and coal-fired power plants. Firms in the power sector should be scolded for continuing coal production at scale.
These are problems of the mid-transition, as the scholars Emily Grubert and Sara Hastings-Simon have described decarbonization’s current era. But China is further along in this transition than other states, and it could lead in the management and planning required for the transition as well.
China is stuck. For four decades, China’s growth rested on moving abundant cheap labor from low-productivity agriculture to higher productivity sectors, often in urban areas. The physical construction of China’s cities underpinned this development and became its own distorting bubble, launching a cycle of real-estate speculation. The government pricked this bubble in 2020, but since then, Chinese macroeconomic strength has failed to return.
Despite the glimmering nature of its most modern cities, China remains decidedly middle income, with a GDP per capita equivalent to Serbia. Many countries that have grown out of poverty have reached this middle income territory — but then become mired there rather than continuing to develop. This pattern, described as “the middle income trap,” has worried Chinese policymakers for years.
The country is obviously hoping that its new clean industries can offer a substitute motor to power China out of its middle-income status. Its leadership’s apparent decision to slow walk the energy transition, however, looks like a classic example of this “trap.” The leadership seems unwilling to jettison older industries in favor of the higher-value added industries of the future. The fact that the government has previously subsidized these industries just shows the complexity of the political economy challenges facing the regime.
The NDC’s announcement could be seen as an easy win given Trump’s climate backwardness. Clearly that’s what Xi was counting on. But China is too important to be understood only in contrast to the United States — and we should not applaud something that not only fails to recognize global climate targets, but also underplays China’s own development strategy. The country is nearing the release of its next five-year plan. Perhaps that document will incorporate more ambitious targets for the energy transition and decarbonization.
This summer, I visited Ordos in Inner Mongolia, a coal mining region that is now also home to some of China’s huge renewable energy megabases and a zero-carbon industrial park. Tens of thousands still labor in Ordos’ mines and coal-hungry factories, yet they seem like a relic of an earlier age when compared to the scale and precision of the new green industrial facilities. The dirty coal mines may still have history and profits on their side, but it is clear that the future will see their decline and replacement with green technology. I hope that Xi Jinping and the rest of the Chinese political elite come to the same conclusion, and fast.