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Oh, he’d never self-identify as an environmentalist. But not even climate activists have had the courage to propose a 10% tax on energy.

Dear Donald Trump,
I will be honest with you. I doubted at first. I didn’t understand the plan. But now that I see what you are doing, I have to say: I underestimated you. I was not really familiar with your game.
Yes, I finally see it all now. Even though you have attacked environmentalists for years, even though you have called climate change a “hoax” and a “scam,” and even though you have given climate deniers access to the highest echelons of your administration, I finally appreciate your peculiar genius.
You say that your big and beautiful tariffs are meant to bring about a new American golden age, but I know you’re hiding the truth. With your unprecedented tariffs on Canadian and Mexican imports — and your levies on building materials of all sorts — you are doing what nobody else has had the courage to do.
You are trying to engineer the shock decarbonization of America — no matter the peril, no matter the cost.
Yes, it might seem crazy. But think about it. For years, whenever environmentalists have gathered in secret — and I’m talking the real radicals here, not the ones who send out mailers or go on TV — they plot about a vast agenda to remake America. They hate the fossil fuel industry, of course. But they go further than that. They loathe driving, so they want to destroy the auto industry. They hate big trucks, especially SUVs and pickups. They want to make gasoline more expensive. And really, if we’re being honest, they want to force everyone to live in cities.
I don’t go for such a radical agenda, myself. I’m much more of a moderate. But I have to admit: I know a secret radical environmentalist when I see one. And you, Mr. Trump — well, I won’t say it out loud. But as one former Democratic climate official texted me (and this is real), it might be time to start talking about a “GREEN NEW DONALD.”
Just think about it. Transportation is the most carbon-intensive sector of the U.S. economy, and big personal vehicles — SUVs and pickups — are responsible for the largest share of that pollution. Selling those big trucks to Americans is what drives Ford and General Motors’ profits, and those two companies have developed complex supply chains that can cross the U.S., Mexican, and Canadian borders half a dozen times before their vehicles’ final assembly. The biggest trucks — like the Chevy Silverado — have a particularly arcane value chain, spanning Canada, Mexico, Germany, and Japan.
Environmentalists have struggled to figure out how to deal with Americans’ affinity for these big cars. But you, Mr. Trump, you knew just what needed to be done. You slapped giant tariffs on cars and trucks and auto parts, which could spike new car prices by $4,000 to $10,000, according to Anderson Economic Group.
There’s even a good chance that price hike could hit internal combustion cars worse than it hits EVs — in part because the internal-combustion car supply chain has existed for longer and has had more time to ooze across North America. This widespread damage could prompt layoffs at Ford and GM — but you didn’t hesitate for the climate’s sake, comrade! You were ruthless.
But Mr. Trump, you didn’t stop there. As you surely know, roughly a third of America’s greenhouse gas emissions come from natural gas. It is the prize jewel of fossil fuels, and it’s absolutely core to the U.S. energy system — and Mr. Trump, you did not hesitate to tax it directly. Thanks to your new 10% tariff on Canadian energy imports, American consumers can now expect to pay an extra $1.1 billion a year for natural gas, according to the American Gas Association. Those higher costs will be concentrated in western states and New England.
Your tariffs are also going to make electricity prices go up, particularly in some of the swingiest congressional districts around the Great Lakes. Electricity will also get more expensive in Maine, which has a Senate race in 2026. Mr. Trump, this is an act of true political courage. Normally, environmentalists wouldn’t support raising electricity prices, because it might discourage people from buying EVs or electrifying their homes. But since you’re raising electricity and natural gas and oil prices at the same time, you’re practically begging Americans to buy heat pumps, induction stoves, and invest in energy efficiency technologies essential for decarbonization. And to do so even though it might put your own party’s control of the Senate at risk? You are one hell of an environmental zealot.
Even your steel and aluminum tariffs and your new levies on Canadian lumber are inspired by your climate fervor. By raising the cost of new construction, you are discouraging single-family home construction and all but forcing more Americans to live in multi-family buildings, which are more energy efficient and have lower emissions. Mr. Trump, you really think of everything! I never should have doubted. You are going to make us live in the pods! And with your steep agricultural tariffs, you might even make us eat the bugs!
The most impressive thing you’ve done, though, is your sly little attack on the American oil industry.
The American fossil fuel industry imports more than a million barrels of oil from western Canada every day. This sulfurous sludge is important to the U.S. refining industry because it complements the lighter oil that comes roaring out of American fracking wells. By combining America’s lighter oil with Canada’s heavy crude, U.S. refineries can cheaply churn out a range of high-value products, including gasoline, diesel, and jet fuel.
It’s really important that these American refineries have easy access to as much western Canadian oil as they need as its easy availability lets them ramp up and down different types of fuel production depending on what the market requires at the moment. That’s why they have invested tens of billions of dollars in equipment specially designed to process heavy, sulfur-rich Canadian oil.
In the past, Canadian companies have tried to expand these exports. As you remember, more than a decade ago, one Canadian company wanted to build a pipeline known as Keystone XL. But this came with downsides for the climate: Canadian crude is some of the most carbon-intensive oil in the world, and burning it in large quantities could have meant it was “game over for the climate,” according to journalist-turned-activist Bill McKibben.
The goal of fighting the Keystone XL pipeline was to raise the cost of importing Canadian crude oil, hopefully keeping it in the ground, while undercutting U.S. refinery profit margins. Activists won that fight — and they had your help, Mr. Trump. After the Biden administration revoked Keystone XL’s construction permit in 2021, its developer sued the U.S. government in international trade court and lost. Ironically, it may have had a better shot at winning its case under NAFTA than under its Trump-negotiated replacement, the United States-Mexico-Canada Agreement.
But of course, even that didn’t unwind America’s and Canada’s decades of economic integration. The United States still imports hundreds of millions of barrels of Canadian oil a year, and all that oil damages the climate while simultaneously keeping U.S. gasoline prices low.
But Mr. Trump — you are now attacking this too! You astound me. You have bashed those Canadian oil imports with a 10% energy tax. This will prove even more effective at hurting the North American fossil fuel industry and raising American gasoline prices than blocking the Keystock XL pipeline did, because it will knock refineries right in their profit margins. If you play your cards right, you might even raise the cost of diesel and jet fuel too!
Now, Mr. Trump: I realize you can’t come out and say all this. In fact, you claimed last week that you wanted to revive Keystone XL, even though its developer has given up on it.
This struck many people as silly, but I know just what you are doing here. With your words, you are trying to look like a fossil-fuel-friendly Republican to please your base. But with your actions, you are actually raising taxes on the U.S. fossil fuel industry. What other explanation is there? Surely nobody would be so silly as to propose making it cheaper to import Canadian crude oil at the same time that they deliberately make it more expensive. And surely nobody would say they support autoworkers while actually destroying the U.S. auto industry. That would be truly self-defeating — and Mr. Trump, you are a winner!
Some people — well, really, just your Commerce Secretary Howard Lutnick — have implied that you might lift these tariffs as soon as tomorrow. I don’t believe them. I know what you’re up to here. You are not going to fold so soon. You are trying to keep talking the talk even as you whack away at cars, oil, and gas. I might even say that you are like a moldy strawberry: “Republican red” on the outside but “deep green” on the inside.
Now, you could go even further. Conservatives have long observed, however sarcastically, that since carbon emissions correlate with GDP in so many countries (although not in the U.S.), the fastest way to fight climate change is to engineer a giant recession. Some might assume this would be going too far for you — it would be going much too far for me. But on Tuesday, the International Chamber of Commerce warned that your tariffs could set off spiraling trade wars, putting the country in “1930s trade-war territory” and triggering a new Great Depression. Just think of how the emissions will fall from that!
Oh, Mr. Trump! You really ARE a Green New Donald. You truly are willing to sacrifice anything for the climate — even if it means kneecapping the American economy, bamboozling the world, and even ending industrial civilization to do it! Oh, Mr. Trump, I am overcome. You astound, captivate, and enthrall me. Now I understand how JD Vance feels.
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Everything is getting more expensive — except for government debt.
Across the developed world, yields on government debt are rising, driving up the cost of borrowing with potentially particularly dire effects for renewable and clean energy.
“Nearly every issue of government bonds at every maturity for all G7 countries is trading at a higher rate today than it was in February, pushing up the amount that governments must pay to sell new debt,” the Financial Times reported on Sunday.
These government bonds — especially U.S. government bonds — serve as benchmarks for lending across the economy. The 10-year Treasury is currently trading at a yield of 4.8%, up from 4% in February before the war in Iran began.
The rising yields are due in part to the ongoing war being waged by the United States and Israel, which has driven up the prices of core commodities and touched off inflation across the globe. A number of wealthy countries, including the United States, are also running large budget deficits, which means there’s lots of government debt floating around. Inflation erodes the value of that debt, however, driving up the returns investors demand for government bonds and driving down what they’re willing to pay.
I have written extensively about how high borrowing costs exact an especially steep toll from renewable energy development. That’s because the bulk of spending on a renewable project — say a solar farm — comes up front as capital expenditure that often has to be financed through borrowing. For a gas-fired power plant, on the other hand, the spending is split more evenly between upfront costs and operational costs (namely fuel), which can be paid for out of cash flow from operating the plant. Where the cost of operating a gas plant is at the mercy of natural gas prices, for a renewables project, interest rates can dominate the economics.
Sure enough, that inflationary pressure showed up in the second-quarter results of America’s renewables companies. Solar installer Sunrun, for instance, has seen declining sales growth. In an August earnings call, Sunrun CEO Mary Powell said the company’s results were “reflecting a higher capital cost as interest rates have inched up.” Wind developer Orsted, meanwhile, told investors that it had incurred a nearly $200 million loss on its U.S. offshore wind business “as a result of an increase in the long-dated U.S. interest rates.”
But macroeconomic indicators like deficits, inflation, and interest rates show just one side of the picture. After all, it’s not just governments that borrow, and it’s not just money that’s necessary for any sort of big project, including renewable and clean energy.
At the same time governments are borrowing more, bond market investors are also being offered hundreds of billions of dollars of debt from hyperscalers and other technology companies looking to build out data centers to power artificial intelligence. Bond markets will have to ingest over $500 billion of AI-related debt issuance this year, according to Morgan Stanley, and they’ll be called upon again to help fund an estimated $1.2 trillion in capital expenditures in 2027. Across the economy as a whole, “more than half of the capex growth this year can likely be ascribed to the buildout related to AI,” Federal Reserve Chair Kevin Warsh said in a speech last week.
That boom is driving economic activity — and high prices — throughout a number of sectors, including materials and labor.
Cleveland Fed President Beth Hammack told CNBC in June that inflation was “too high,” citing “insatiable” demand from data center developers for inputs such as electric switchgears. (Hammack was a dissenting voice at the July meeting of the Federal Open Markets Committee, voting for a higher interest rate against the Fed majority who decided to keep rates unchanged.)
And it’s not just software engineers who are seeing high salaries as a result of the AI boom. The technology buildout has also raised the wages of laborers and tradespeople essential to both data center and energy projects, especially for specialized trades like electricians.
“Skilled workers were difficult to find in a range of fields, notably technicians and tradespeople,” the Federal Reserve reported in its July report on economic conditions.
While this is great news for electricians and their families, it’s also the type of thing that can make central bankers nervous.
The “AI investment surge could trigger nonlinear price increases,” Dallas Fed President Lorie Logan said in July. “The risk is that the pressures broaden as AI demand touches construction, power generation, and other sectors.”
That’s the silver lining for renewable energy — and all energy developers. While the costs of capital, materials, and labor are going up, electricity itself has never been in greater demand.
The energy developer and utility NextEra told investors on its July earnings call that it’s been able to sign new contracts on existing assets at a $20 per megawatt-hour premium over recent prices, a process known as “recontracting,” indicating solid demand for power.
Overall, NextEra chief executive John Ketchum said, “Hyperscalers and other large load customers are increasingly focused on speed, certainty, and scalability. That plays directly to our strengths.”
Chirag Lala, vice president of research at the Center for Public Enterprise, explained to me that it’s this demand that’s balancing out the higher financial and material costs renewable developers face. “That’s why we are still getting solar and battery builds. There’s demand on the system,” he told me.
The industry is in a kind of tug of war between financial and structural factors pulling it back, and demand factors pushing it forward. “That buildout could absolutely be faster and bigger if a variety of structural and financial variables were mitigated,” Lala said.
The Supreme Court will decide once and for all.
Good evening from New York, where a district court judge struck down a law the state passed in 2024 to extract $75 billion from fossil fuel companies to fund its response to climate change. The ruling is a sign that so-called “superfund”-style laws may not be the winning strategy many climate advocates had hoped.
You may know the New York law as the Climate Change Superfund Act, and it mirrors similarly-named legislation passed in Vermont and introduced in about a dozen other states. The law’s backers — environmental groups, consumer advocates — pitched it as a new approach after earlier attempts to sue energy companies directly for damages had either failed or were stuck in procedural arguments over whether the cases belonged in state or federal court.
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Unlike those lawsuits, the climate superfund laws don’t accuse the companies of doing anything wrong. They are modeled on the federal Superfund program, which allows the Environmental Protection Agency to request funding from companies to clean up industrial waste years after the contamination occurred, and despite the fact that the pollution was lawful at the time. The theory was that this federal precedent might give the states a leg up when energy companies inevitably fought the policy.
That comparison does not seem to have meant much to Judge Brenda Sannes. Instead, her decision focused on the similarities between the climate superfund law and a lawsuit New York City brought against Chevron and other oil companies that federal courts dismissed several years ago. Sannes concluded that just like the city’s lawsuit, the superfund law would in effect regulate interstate greenhouse gas emissions, which is a federal responsibility under the Clean Air Act.
Notably, Sannes also disregarded the Trump administration decision to rescind the 2009 endangerment finding for greenhouse gases, which underpinned the federal government’s responsibility to regulate carbon under the Clean Air Act, writing that it had “no impact” on her analysis.
To me, the idea that these climate lawsuits and superfund laws are akin to emissions regulation has been one of the more confounding aspects of covering these court fights. None of the suits concern greenhouse gas regulations in any traditional sense — they are about oil companies’ deception and responsibility for climate change-related damages. Still, several courts have agreed with oil companies that the financial penalty levied on them amounts to a form of oversight of emissions.
Climate advocates are not giving up just yet, and are urging New York Attorney General Letitia James to appeal. A press release from the group Fossil Free Media argued the ruling was “based on a deeply flawed analysis” and was “an early, appealable decision in a developing legal fight.” James has not yet issued a response.
Regardless, the superfund concept will get another test in the federal court for the district of Vermont, where the same groups challenging New York’s law — the American Petroleum Institute, the Chamber of Commerce, Republican states, and the Trump administration — are also challenging Vermont’s version.
Much more rides on an upcoming Supreme Court case, however. The high court has agreed to hear oral arguments in a lawsuit brought by Boulder County, Colorado against Exxon and a Canadian oil sands company, Suncor. The county originally filed the case in 2018, and it’s one of the ones that’s been held up for years in procedural arguments. Last year, the Colorado Supreme Court decided it could finally advance toward a trial, leading the oil companies to appeal to the federal Supreme Court. They are asking the justices to decide once and for all whether federal law preempts states from seeking relief for climate damages.
Oral arguments begin on October 5.
On Palisades’ progress, Taliban minerals, and New York’s climate superfund
Current conditions: Tropical Depression Five is barreling northwest from the Caribbean to Houston • In the Pacific, Hurricane Karina has strengthened into a Category 4 storm, but it’s unlikely to make landfall anywhere • The surface temperature of the Yellow Sea is nearly 85 degrees Fahrenheit, fueling storms across South Korea.
President Donald Trump is among the few politicians in America willing to stand 10-toes-down in defense of the need to build out more data centers. In a post Monday on Truth Social, the president admonished communities that reject data centers as misguided and foolish. “The only reason that communities throughout the U.S.A. should not want data centers is if they want to end up being backwards and poor,” Trump wrote. “If they want to be successful and rich, with far lower taxes and jobs all over the place, let data reign.” Still, he said “plenty of other places” want them. “If we kill the Golden Goose, you will only have yourselves to blame,” he wrote. “China could not be happier with this anti data center movement.” It’s not a popular stance. Heatmap Pro’s latest polling shows that three-quarters of Americans now oppose data centers built in their backyards.
The U.S. District Court for the Northern District of New York struck down the state’s Climate Change Superfund Act on Monday, ruling that the 2024 law is invalid under the federal Clean Air Act. The law set up a cost recovery scheme whereby fossil fuel companies would pay into a fund used to finance climate change adaptation-related infrastructure projects. The state’s argument rested in part on the Trump administration’s decision earlier this year to rescind the Environmental Protection Agency’s endangerment finding on greenhouse gases, which gave the agency authority to regulate climate pollution. That move “cannot be reconciled” with the administration’s argument that the CAA preempts New York’s law, the state said. Judge Brenda K. Sannes dismissed that reasoning in her decision, citing the Supreme Court’s ruling in American Electric Power v. Connecticut from 2011, which, as my colleague Emily Pontecorvo put it, “established companies’ protection from federal public nuisance claims over greenhouse gas emissions. That decision sprang from the Court’s earlier 2007 decision that the Clean Air Act covers greenhouse gas emissions — which the EPA is now contesting.”
The case was one of at least four the Trump administration has pursued against states attempting to make fossil fuel companies cover the costs of adapting to climate change. Judges have already ruled against its attempts to prevent Hawaii and Michigan from suing fossil fuel companies, however a case against a similar superfund law in Vermont is still pending. “New York’s law would have expropriated $75 billion from energy companies around the world during an energy emergency and in direct defiance of American foreign policy and federal law,” Adam Gustafson, principal deputy assistant attorney general of the Justice Department’s Energy and Natural Resources Division and the administration’s lead attorney in this case, said in a statement. “We will continue to fight for affordable, reliable energy for all Americans.”
A sign of how much an industry is really booming is whether startups begin popping up to provide ancillary services. Here’s a prime example of the artificial intelligence buildout’s energy boom: The AI energy software provider Verse told Heatmap exclusively for this newsletter that it now has 30 gigawatts of power under its platform’s management. The company’s flagship product, Aria, is an intelligence platform for data center companies that brings utility bills, contracts, power purchase agreements, and live power usage data under one dashboard. The company also helps manage on-site assets such as batteries. “You can't solve for speed, cost, risk, and carbon while your supply contracts, your load, and your flexible assets sit in separate silos,” Seyed Madaeni, Verse’s chief executive and co-founder, said in a statement.
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When Holtec International starts the Palisades nuclear plant back up, the facility in western Michigan will be the first in the nation to return to life after a permanent shutdown. Once complete, the Palisades restart will set off a series of other projects, including some to repower defunct nuclear plants in Pennsylvania and Iowa. That makes each milestone in the Palisades project notable — but the one it reached Monday is particularly promising. Holtec started loading fuel into the reactor, setting the stage for it to return to service potentially before the end of the year, months before the official March 2027 start date. “Loading fuel into the Palisades reactor is an important milestone and a reflection of the tremendous effort of the men and women who have brought this plant to this point,” Fadi Diya, Holtec’s chief nuclear officer, said in a statement. Palisades’ completion won’t just kick off more restarts. Holtec also plans to build its first two 300-megawatt small modular reactors at the site. Based on the industry’s standard pressurized water technology, the company has received hundreds of millions from the Department of Energy to support its construction.

Commerce can, at times, be the ultimate salve. Raw materials flowed from the U.S. to British factories even after the American Revolution and the War of 1812. Japanese and German automobiles dominate American roads decades after those nations’ defeats in World War II. As memories of war fade, Americans buy nearly $200 billion in Vietnamese goods each year, helping to transform the Southeast Asian country into a top manufacturing hub. Now the Taliban is making its pitch to Washington’s wallet. The Islamist group now leading Afghanistan said it would “absolutely” welcome U.S. investments in the rural, mountainous, and underdeveloped Central Asian country’s mining, infrastructure, or agriculture industries. “Relations between Afghanistan and the United States should not be assessed through the lens of the past 20 years of war, but rather on the basis of future co-operation,” Taliban foreign minister Amir Khan Muttaqi told the Financial Times at his office in Kabul. “Our economic policy is open.”
Meanwhile, from China to the U.S., lithium producers are posting what Bloomberg called “bumper profits.” Demand for energy storage is soaring, especially as countries seek to insulate themselves from the effects of the Iran War energy shock. As a result, Chinese companies such as Tianqi Lithium and Ganfeng Lithium Group reported their strongest net income in three years during the first six months of 2026. North Carolina-based Albemarle said global lithium demand had grown 45% compared to a year earlier. Australia’s PLS Group, meanwhile, “swung a $377 million profit in the 12 months to June 30 from a loss the year before,” the newswire reported.
You don’t need to be an expert in emerging markets to recognize the potential for solar. Countries that haven’t yet extended grid networks into rural areas can electrify villages using panels that are increasingly cheap and flooding into places such as sub-Saharan Africa, as I told you last week. You won’t need deep connections in those countries to start investing in that renewable energy potential, either. The startup Odyssey Energy Solutions, as my colleague Katie Brigham put it, “acts as a middleman between local installers and global capital providers that want exposure to developing markets but typically wouldn’t take the risk of financing small companies in unfamiliar environments.” This morning, the company told Katie exclusively, it’s announcing that it has raised another $74 million to fund its buildout.