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The state has binding emissions cut goals but still no regulations to meet them.

When New York Governor Kathy Hochul gave her State of the State address on Tuesday, climate advocates expected her to unveil an overdue plan to implement and fund the state’s climate law, which was enacted in 2019. Instead, she implied that she was delaying the plan indefinitely. In doing so, legal experts say Hochul would be breaking the law.
New York has a statutory requirement to cut emissions 40% from 1990 levels by 2030, and 85% by 2050. The deadline to draw up regulations to achieve this passed in January 2024. Hochul’s administration has been working on a solution — a cap and invest program, which would set a limit on total greenhouse gas emissions from the state that would decline over time and put a price on those emissions, bringing in revenue that could be reinvested in carbon reduction projects. The state expects decarbonization to cost $15 billion per year by 2030, and $45 billion in 2050.
As recently as a few weeks ago, New York climate advocates were hearing that Hochul planned to preview the program in her State of the State address before including it in her proposed budget. “All indications were that this was all systems go,” Justin Balik, the senior state program director for Evergreen Action, told me.
But Hochul didn’t mention cap and invest once in her speech. Her State of the State policy book, published Tuesday, acknowledges the program and notes that in the coming months, her administration will propose new emissions reporting regulations “while creating more space and time for public transparency and a robust investment planning process.” Advocates interpreted the message as a kiss-off.
“There have to be enforceable regulations that ensure we can meet the emission reduction mandates,” Rachel Spector, a senior attorney at Earthjustice, told me. “Those were supposed to be in place a year ago. Now they are late and there’s no clear date when we are getting those regulations, and that’s a really troubling situation.”
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Governments miss statutory deadlines all the time. But without any clear timeline on when the regulations might happen, the state’s overarching climate law could become impossible to carry out. “We have a [presidential] administration that’s coming in that's extremely hostile to moving forward on climate mitigation, and is going to potentially take us backwards,” Balik told me. “And so we need states to be the bulwark like they were during the last Trump term.”
There are a few possibilities for what can happen next.
Michael Gerrard, director of the Sabin Center for Climate Change at Columbia University, likened the situation to when Hochul tried to impose an indefinite delay on congestion pricing in New York City last June, just days before it was set to go into effect. “I helped coordinate an effort that led to two lawsuits in New York state court claiming that Hochul did not have the power to do that,” he told me in an email. “We won the lawsuits, congestion pricing survived several lawsuits against it, and it launched on January 5.”
Gerrard added that some of the groups involved in those suits and others are now considering challenging Hochul’s indefinite delay of cap and invest. The text of the Climate Leadership and Community Protection Act, which created the emissions targets, “allows citizens to bring proceedings in state court for violations of the statute,” he said. And there does not appear to be any pathway for achieving the targets without cap and invest, he added.
Liz Moran, a policy advocate for Earthjustice, said that cap and invest was never going to be enough anyway, and is urging the legislature to make progress on sector-specific policies. She called for the state assembly to pass the New York Heat Act, for instance, a bill that would remove barriers to transitioning away from the use of natural gas for home heating and set in motion a plan for mass conversion to efficient electric heating.
Early outlines of New York’s cap and invest program indicate that regulators were considering a relatively low price ceiling on pollution, making it easier for companies to buy their way out of compliance with the cap. As New York Focus has reported, the state’s own modeling shows that the program alone would not achieve the 2030 target. “Given what the governor has outlined as the ambition of the cap and invest program, there was always going to need to be additional sectoral mandates or policies that come from the legislature to drive emission reductions,” Moran told me.
In theory, the legislature could also put forward a bill outlining its own cap and invest program. Assemblywoman Anna Kelles, from Ithaca, New York, introduced a cap and invest bill last year, though it never left the environmental conservation committee.
Hochul spoke at length in her speech about affordability, and her stalling of cap and invest may be related to concerns that it would raise costs for consumers — or at least the perception that it would. “New York needs to get the transition right and keep our state affordable for families,” her policy book says. This would not be the first time Hochul’s fears about the cost of climate action (and potential backlash to it) have caused her to do an about-face. In 2023, Hochul tried to change the way the state accounted for greenhouse gas emissions under the idea that it would lower the cost of decarbonization. Her backpedaling on congestion pricing is another example.
The state’s own analysis, however, found that cap and invest would likely raise costs slightly for some New Yorkers while lowering them for others. Low-income residents would be eligible for direct rebates that would more than offset the higher cost of fuel. Depending on how the remaining revenue is spent, it could bring further cost reductions by helping New Yorkers pay for energy efficiency improvements that lower their bills.
“The governor is rightly focused on affordability, which is why extensive consumer rebates were baked into this,” said Balik. “From our perspective, the way that the state was planning on moving forward with this was perfectly in line with the governor's affordability agenda.”
The one bit of climate action Hochul did commit to on Tuesday was to call for spending $1 billion of the next budget on climate action — the “largest climate investment in the history of the state budget” — though she did not say where the money would come from or where it would go. Her State of the State book gives little more detail, noting only that it will “span different sectors of our economy and across the state’s geography,” with nods to clean heating and transportation projects. Cap and invest, meanwhile, is expected to bring in $3 billion to $5 billion in its first year.
“It's a start,” Spector said of the $1 billion. “But it’s definitely not enough.”
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Talking with SVP of strategy Sarah Jewett about the competition, expansion plans, and how to get more Americans informed and onboard.
Just three years ago, enthusiasm for geothermal energy was lukewarm at best. In a sign of just how marginal it seemed, the firehose of federal money directed at clean energy investments under the Biden administration contained just $84 million for geothermal, specifically for next-generation technologies. By contrast, the next-generation nuclear industry received roughly 40 times more.
Geothermal electricity generation uses heat from the Earth’s molten core to spin turbines that generate carbon-free, 24/7, renewable energy — a pretty attractive offer in today’s age of rampant climate change and soaring demand. Though the technology has been in use since 1913, it’s been stymied since then by the industry’s dependence on finding rare and unique underground reservoirs of hot water.
Then in 2023, a little-known startup backed by Bill Gates, among others, achieved a breakthrough at a pilot project in Nevada, showing that fracking technology could be used to harvest energy from hot, dry rocks, which can be found virtually anywhere in the world.
Fervo Energy’s announcement hit the geothermal industry’s smoldering embers like a splash of gasoline. Investors saw a reliable new source of carbon-free electricity that could tap into existing oil and gas supply chains and workforces and clamored to put their money into the startup, which had raised roughly $1.5 billion from private investors prior to the IPO. As the need for more energy to power data centers for artificial intelligence has grown, that interest has only intensified. Case in point: The company actually upsized its initial public offering on the Nasdaq stock exchange this week.
The money from the IPO, the company said in its initial filing with the Securities and Exchange Commission, would go to Fervo’s flagship installation at its debut 500-megawatt Cape Station plant in Utah. When all was said and done after the company’s Tuesday debut, it had netted nearly $1.9 billion — about 50% more than the initially planned $1.3 billion. When trading picked up again on Wednesday, the price soared more than 30%, to over $36 per share.
Late Wednesday afternoon, I spoke to Sarah Jewett, Fervo’s senior vice president of strategy, to discuss the IPO and what’s next for the company. The transcript of our conversation, conducted over Zoom, has been lightly edited for clarity and length.
Congratulations, Fervo has just made quite the stock market debut. Just a few days ago, the company upsized its initial public offering. Then yesterday, when the FRVO ticker officially launched at the Nasdaq, you ended up raising nearly $1.9 billion, beyond the $1.3 billion you initially anticipated. You must be feeling pretty good today.
I’m teeing you up for the pun here, Alexander: Geothermal is so hot right now. The IPO is not a finish line for Fervo. It is a financing milestone that facilitates the build out of more clean, firm, reliable, affordable energy. That is what we are most excited about as we ring the bell in Nasdaq. As we celebrate, we are more excited than anything to get back to work, to put clean megawatts in the grid.
Well then, let’s drill down on that. What were you seeing from investors before the IPO?
Investors, when we went around to sell, sell, sell , they were familiar with the need for energy. They were familiar with what’s happening in tech and AI. They were familiar with the existing solutions for power. They saw us as a new entrant into the scene that is highly capable of bearing the weight of resolving this intense energy crunch. Because of that, as we sold our story over the IPO roadshow, we just saw insane demand and decided it was the right idea to upsize the round.
Beyond the big player in conventional geothermal, Ormat Technologies, there haven’t really been many pure-play options in the retail market for people who want a piece of the action more broadly within geothermal. Where do you draw the line between where investors are buying into Fervo, specifically, and where they are buying into geothermal, generally?
These are really sophisticated investors. It’s overly reductive to say they’re just investing in us because we are a leading contender in an interesting industry to them. These are sophisticated investors who have vetted our technology, our performance, our execution to date, how we think about growth. They really bought into that story, specifically, as being a story that they believe to have real sustainability.
Where do you see the biggest potential competition? Do you think it will come from an incumbent player who makes a pivot into the next-generation market? Or do you think one of these other startups in the mix such as Sage Geosystems or XGS Energy or Quaise Energy could find similar success to Fervo?
We’re driving a rising tide that should lift all boats. I’m not going to publicly place bets on who I think will be the closest follower. But I’m hopeful that we will start to see more successful competitors in the years to come. The market that we’re addressing is massive right now. Because of that, we should see enhanced competition going forward. In some ways, we would be disappointed if that weren’t the case. We have developed a technological solution that is really meaningful. It should encourage others to come try to do the same.
Fervo is really differentiated in the years of execution that we have under our belt. At this point in time, we’ve drilled 40 horizontal geothermal wells. That is a huge differentiating factor at this point in time. The demand is here now. We are well positioned to meet that demand in a way that is rapidly scalable. We are in the right place at the right time.
We like to say internally that, coming to this point, we didn’t have to contend with Fervo. Now competitors will have to contend with Fervo. We obviously believe in the geothermal energy industry, which is why we’ve been so public with publishing our data and talking about what we’re trying to do. But we do really think that we have a substantial lead on the market, just in execution. And then, of course, we have immense amounts of IP and data and learnings to go with it.
Do you plan for the primary business to remain electricity production? Do you foresee going into industrial heat, or district heating in Europe?
We will pursue all of those as business lines in the future. Right now, we are proving ourselves to be uniquely good at delivering power projects. That will be our focus for the near term.
I know you have been focused on the U.S. Where are you looking internationally?
The U.S. is a substantial market at this point in time, so while we do plenty of business development outside of the United States, right now we’re focused on developing at home.
How long will it take for the company and for the industry more broadly to start developing overseas projects in a big way?
We’re close to that already. It’s just a question of what is smart from a business model perspective, and when the timing is right. I’m probably not at liberty to say right now when the timing will be right to really lean into a thriving export side of the business.
If you had to estimate, what would you say is the share of your investors now who are classic energy investors — the types of people who would have been buying into or did buy into shale — versus the share you think are motivated by climate concerns and the clean energy potential of what geothermal is doing? Obviously I realize there’s plenty of overlap. But if you had to discern between those camps, where would you say you’re more indexed?
I would say the majority of energy sector specialists who are investing in this deal are either technology agnostic or are focused on the clean energy side of the business. We do have some marquee shale investors that we will be bringing on as part of the public offering that we’re really, really excited about. So, it’s probably a healthy mix.
Is the shale industry the best analog for how you expect geothermal to scale?
Certainly on the subsurface side it is the closest analog to what we’re doing. We are taking technology that was developed for the shale industry in the subsurface, then we’re deploying it in a similar fashion, which is just over and over and over repeated wells to ensure that we are learning at a really rapid rate and then achieving cost reduction on a learning curve in a single basin. That is a big part of our cost reduction story.
The other thing that we talk a lot about internally is bringing a manufacturing mindset to geothermal energy. It is an industry that has historically been much more akin to a construction industry, building bespoke projects that are tailored for a bespoke commercial need. That is not what we’re trying to do. We’re trying to build a much more scalable business. In order to build a scalable business, you have to establish what is the unit that you are standardizing around and iterating upon. We intend to standardize our design, and iterate and optimize off of a standardized design to allow us to move really fast and to get a lot better, to pull costs out of the business and to be able to scale.
Given how much faster you guys are coming to market, obviously, you have an advantage here over some of the new nuclear technologies being promoted right now. Do you think geothermal is mostly going to eat into the potential market that those could serve? Or do you see nuclear as having different use cases than what geothermal can do?
It’s an overlapping use case, for sure. We don’t talk a lot about eating market share, because the pie is really, really large right now.
How soon before we can anticipate building enhanced geothermal systems on the East Coast and in the Northeast, places where the subsurface heat is not as easily accessible as in the Southwest?
We like to remind people that the demand in the West is massive right now. Probably 18 months ago, we weren’t having as productive conversations with hyperscalers about siting the West as we are today. Today we are having tons and tons of conversations about siting and co-locating alongside geothermal projects in the Western U.S. So the market is really big. We like to mention that just to remind people that expansion is not the only marker of success here.
That said, there is hot rock everywhere, it’s just a question of how deep that hot rock is. We, through our standardized and iterative and repetitive approach in the subsurface, are meaningfully driving cost out of the subsurface, making depth much more of an economic question. If it is more expensive to drill to a certain depth but you already pulled an immense amount of cost per foot out of your drilling, then temperature at depth becomes more accessible even when it’s deeper.
Because drilling is just a portion of the capex of these projects, and a power plant doesn’t care whether it’s located in the West or the East, we basically think that we can move into the Eastern U.S. sooner than we probably had originally thought. It is our goal to do that sometime in the next decade.
In the scant polling I have seen on partisan attitudes on geothermal, most American voters are unaware of it, but among those who are, there seems to be a pretty close match to nuclear in terms of emerging as a rare purple form of energy with closely aligned support between Democrats and Republicans. As you grow, how are you thinking about maintaining that broad appeal and reaching more of those Americans still in the dark?
We benefit from being in an incredibly bipartisan seat right now, and that has been so helpful for our growth and development and is very important to us to maintain going forward. There’s no reason why it shouldn’t be bipartisan. It is a story that is relatable to all. We are highly adjacent to the oil and gas supply chain and oil and gas workforce. We are reliable energy. We are driving towards affordability. We are a clean energy industry with no operating emissions. And really, more than anything, we’re trying to build in a sustainable fashion. We’re trying to deliver projects the right way. It’s something that we have really been able to gain support on both sides of the aisle.
Obviously, that’s been hugely beneficial as we think about extending tax credits. Geothermal energy benefited from increasing tax credits under the Inflation Reduction Act, under President Biden. Then President Trump preserved geothermal energies tax credits in the One Big Beautiful Bill Act. That was hugely helpful to Fervo’s early development.
As we look to bring the cost of the technology down, we hope to continue educating a large group of stakeholders about this technology going forward, and continuing to bring people along with the story, no matter which side of the aisle they sit on.
Current conditions: The heat wave driving temperatures into the triple digits in the Southwest is moving northward to the Mountain West • Temperatures in Timbuktu are forecast to hit 115 degrees Fahrenheit as Mali devolves into a civil war between the government and Islamist militants • Malé, the Maldives’ densely packed island capital often called the Manhattan of the Indian Ocean, is facing days of intense thunderstorms.
Ever since South Korea built the United Arab Emirates’ first nuclear plant as close to on time and on budget as any democratic country has come in recent years, the East Asian nation has been considered one of the only real rivals to China and Russia on construction of new fission reactors. That’s in no small part because many American engineers whose projects dried up in the late 20th century took their skills there, building out more than two dozen commercial reactors and helping to vault Seoul to the vanguard of technological civilizations. Recently, Washington has wanted to re-shore that nuclear knowhow and learn the new project management tricks perfected by South Korea’s state-owned nuclear firm. But Korea Hydro & Nuclear Power’s flagship reactor mirrors the technology covered under the U.S. nuclear giant Westinghouse’s intellectual property. The yearslong standoff between the two companies came to a head last year with a global settlement that, in a controversial move, barred the Koreans from competing against Westinghouse on projects in Europe or North America. Still, the Trump administration has been trying to court Korean investment in the U.S. nuclear sector.
Now it’s coming closer. On Tuesday, KHNP inked a memorandum of understanding with the nuclear division of U.S. utility giant Southern Company to work together on engineering atomic power stations. It’s not a financing deal. Signed at KHNP’s headquarters in Gyeongju, the companies said the partnership would involve technology exchanges, workshops, and sharing best practices. “This agreement is expected to serve as an opportunity for KHNP engineers to expand their horizons globally and provide a growth chance for the domestic engineering system to take a leap forward,” Kim Young-seung, the head of KHNP’s engineering division, World Nuclear News. “We will continue to do our utmost to complete the Korean-style engineering system through close cooperation with overseas operators and international organisations.”
The Environmental Protection Agency has come up with a new way to speed up construction of data centers, power plants, and other industrial facilities: Let them start building before they obtain required federal air permits. The proposal would “bring flexibility to building non-emitting components or structures,” including cement pads and wiring, piping, and support structures. “Today’s proposal works to provide solutions to issues that have held up critical American infrastructure and advance the next great technological forefront,” EPA Administrator Lee Zeldin said in a statement. “Through commonsense permitting reform, the Trump EPA is fixing the broken system of government interference, while continuing to uphold our core mission to protect human health and the environment.”
Surging demand and shortages of raw materials are pushing lead times for high-capacity electrical transformers to as long as four years, PricewaterhouseCooper analysts said at a Reuters event this week. Demand for step-up transformers, which increase the voltage of electricity as it travels across power lines, increased by 274% between 2019 and 2025, while demand for substation transformers soared by 116%. Prices for essential components, meanwhile, have jumped by roughly 80% in five years. As a result, according to PV magazine, some firms are now paying premiums for production slots on projects that aren’t even finalized yet, while others buy refurbished as a stopgap until newer units arrive.
Transformers aren’t the only grid equipment attracting investment. Just this morning, TS Conductor, a manufacturer of advanced conductors that can bolster the capacity of existing power lines, announced the grand opening of its newest factory in South Carolina. The $134 million facility is now “poised to strengthen U.S. domestic supply chains as utilities work toward building a stronger, higher-capacity, more-efficient power grid — all with the speed that American industry needs and the affordability that American ratepayers deserve,” the company said.
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The Trump administration has removed the acting head of the Federal Emergency Management Agency, replacing the political appointee with a 30-year agency veteran who held senior positions in several previous administrations. On Tuesday, E&E News reported that the exit of Karen Evans, a political appointee put in charge of the embattled agency in December, would be the third such departure since President Donald Trump returned to the White House. Her temporary replacement as acting administrator is Robert Fenton, who began work as a regional administrator in 1996 and held the acting chief job twice under the first Trump and Biden administrations — for six months in 2017 and four months in 2021. “I know this year has been challenging for many across the agency,” Fenton wrote in a staff memo Tuesday, a copy of which the newswire obtained.
FEMA has struggled under Trump. As I told you last summer, the agency cracked down aggressively on internal dissent from staffers. Meanwhile, the funding shutdown at the Department of Homeland Security, where FEMA is housed alongside Immigration and Customs Enforcement, “starved” local disaster responses, Heatmap’s Jeva Lange reported in February..
Alsym Energy, as Heatmap’s Katie Brigham reported last year, “thinks it can break the U.S. battery manufacturing curse.” And not just by besting the incumbents already producing the market’s lithium-ion packs, but actually commercializing a whole new type of battery chemistry that instead relies on cheaper and far more abundant sodium as the main energy carrier. On Tuesday, the Massachusetts-headquartered startup inked a deal with the renewable developer Juniper Energy to deploy 500 megawatt-hours of Alsym’s battery systems in California. The deal, the companies said in a press release, “marks a significant shift away from fire-prone lithium-ion dependencies, prioritizing safety, domestic production, and operational efficiency in some of the United States’ most demanding climates.”

If you thought building batteries or transformers was tricky, how about an electricity distribution network in space? That’s what Star Catcher Industries is promising to do. The Jacksonville, Florida-based startup said Tuesday it had raised $65 million in an oversubscribed Series A round. The investment — led by venture capital firms B Capital, Shield Capital, and Cerberus Ventures — brings Star Catcher’s total capital raised so far to $88 million. Founded less than two years ago, the company is developing space-based infrastructure that can deliver electricity on demand to satellites and spacecraft using optical power beaming, a wireless technology involving high-intensity laser light. “This investment underscores the conviction that orbital infrastructure is now as fundamental as terrestrial infrastructure,” Andrew Rush, co-founder and chief executive of Star Catcher, said in a statement. “Every major application driving the space economy — connectivity, computing, security, sensing — is power-limited today. Star Catcher is lifting that ceiling — making it possible to build in orbit at the scale the next century of life on Earth will demand.”
Editor’s note: This story has been updated to correct the location of Terrapower’s isotope plant.
With markets surging and the crucial waterway still closed, Rob seeks clarity from the founding director of Columbia’s Center for Global Energy Policy, Jason Bordoff.
The Strait of Hormuz has been closed for months. Yet oil is trading — at least as of late Tuesday — at under $110 a barrel. Why haven’t the markets responded more to the biggest supply disruption of all time? Is it a credit to President Trump, and does it give us any clues to how future presidents should handle other energy crises?
On the latest episode of Shift Key, Rob talks with Jason Bordoff, the founding director of the Center for Global Energy Policy at Columbia University’s School of International and Public Affairs. He’s also a co-founding dean of the Columbia Climate School. He was previously a special assistant to President Obama and the senior director for energy and climate change at the White House National Security Council. Rob and Jason discuss whether this crisis will permanently alter the global energy system, what a new climate and energy consensus might look like, and whether Democrats should talk about climate politics.
Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.
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Here is an excerpt from their conversation:
Robinson Meyer: What’s the risk that you’re most worried about in the current crisis that you feel like maybe isn’t getting enough play? In some ways, the lack of any progress since the ceasefire was put into place has meant that we kind of have talked about everything. But I don’t know, is there something that in your mind, whenever you encounter it, you’re like, Oh, that’s a big deal, and people don’t realize how big a deal that is?
Jason Bordoff: I mean, whether it’s tariffs, or Greenland, or Venezuela, or this — and I could list other examples, too — I think global cooperation and America’s role as a trusted partner for countries around the world is a very important one. And that’s true for energy security, too. If you’re really worried about 80%, 90% of lots of the parts of particularly clean energy supply chains, say, being dominated by China or critical mineral supplies, the only way to change that reality is to work in partnership with more countries: Europe and Latin America and Africa. And I’m worried that China has a strong desire to position itself as a reliable commercial partner in the world, contrary to the U.S. And I worry that conflicts like this one don’t help us counter that argument. So that’s a broader point.
When it comes to energy, I wrote a piece with my friend and frequent collaborator Meghan O’Sullivan at Harvard in the latest issue of Foreign Affairs where we talked about that thing I said a moment ago: If you’re more worried about energy security, and particularly you’re an oil- and gas-import dependent economy, say in Europe, a response to this could be, energy security comes from isolating yourself, becoming self-sufficient. And it certainly makes sense to produce more energy at home where you can.
But we talked about the 1970s a moment ago — and one of the responses to that crisis, from my standpoint, is a sense that energy security was strengthened by more cooperation and more integration into a global market, an oil market that was interconnected. So if there’s a hurricane somewhere, or a tsunami somewhere, or a civil war somewhere, supplies could shift around in response to higher prices, to be sure. All of that helped increase security. And it was like a collective insurance policy. I think today, countries, increasingly in the world of geopolitical fragmentation and our collapsing world order, look around and feel like interconnection is a risk, not a source of security. And the more countries try to disconnect and kind of take a go it alone approach, I think that actually is more expensive. It’s cost-inflationary. It weakens economic growth. And frankly, it makes it harder to have a clean energy transition.
You can find a full transcript of the episode here.
Mentioned:
The Iran Shock — And the Dangerous Allure of Energy Autarky, by Jason Bordoff and Meghan O’Sullivan
Jason’s initial response to the Iran War: How the Iran War Could Consolidate China’s Energy Dominance
From Heatmap: The Future of Climate Tech Can Be Found in China’s Five-Year Plan
Jason’s argument that energy independence may be making the U.S. more aggressive
Matthew Huber’s New York Times op-ed: Democrats Don’t Have to Campaign on Climate Change Anymore
This episode of Shift Key is sponsored by ...
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Music for Shift Key is by Adam Kromelow.