The Climate War Between the States

The Inflation Reduction Act was the star of the show in statehouses across the United States this year. As state leaders wrapped up their legislative sessions, many not only tightened their own climate plans, but delivered an encore to the IRA by passing policies to maximize their share of the new federal clean energy funding.

But the applause hasn’t been universal. In a few key Republican-led legislatures, Biden’s climate maneuvers have produced a backlash. Lawmakers pushed through bills that could make cutting emissions a lot harder, making the map of U.S. climate policy start to look as polarized as that of abortion rights or gun control laws.

“There has been a tendency to think about the energy transition as almost automatic when the cost of clean energy technologies come down,” Matto Mildenberger, a political scientist at the University of California-Santa Barbara, told me. “But politics is a really important dimension that's often missed.”

Let’s look at a few examples. Back in February, Minnesota passed a law requiring the state’s utilities to use 100% carbon-free electricity by 2040. Democrats had just taken over the legislature, and they were just warming up. In April they created a $156 million “competitiveness fund” to help agencies and cities compete for the IRA’s clean energy programs. And last week, Democratic Governor Tim Waltz signed two additional laws, one earmarking funding for heat pumps and electric vehicles, and the other creating a new sales tax to support public transit.

Democrats took a similar approach in Colorado, passing new tax credits for many of the same technologies that the IRA funds to try and attract as much federal money into its economy as possible. Coloradans are now eligible for a $7,500 EV tax credit that can be stacked on the federal credit for a juicy $15,000 incentive.

Meanwhile, New York passed the first state-level ban on natural gas in new buildings in the country. Policymakers there also directed a state-run utility to start building renewable energy projects, taking advantage of a little-known provision in the IRA that enables public entities and nonprofits to cash in on federal tax credits.

But in other states, electeds are enacting what you could call anti-climate policies. Montana’s Republican Governor Greg Gianforte recently signed a law that bars state agencies from even considering greenhouse gas emissions when conducting environmental reviews for major projects. The legislature there also passed measures preempting local governments from requiring new buildings to be solar panel or EV-ready, and from placing any restrictions on the use of natural gas. At least 20 other states have enacted similar natural gas ban preemptions in recent years. A new anti-climate copycat bill also spread to a few states this year — Ohio and Tennessee each passed laws classifying natural gas as a source of clean energy.

In Texas, the Republican-controlled legislature is contemplating bills to publicly fund a fleet of new natural gas plants, while placing new, onerous regulations on wind and solar projects. Texas currently produces more wind and solar power than any other state, thanks to lax permitting requirements and an abundance of wind, sun, and undeveloped land. Now, lawmakers want developers of new wind and solar farms — as well as owners of existing projects — to do additional environmental reviews, get new approvals, and pay higher fees. Wind farms would have to be built at least 3,000 feet from neighboring property lines. The rules would not apply to fossil fuel plants.

Though the bill never made it out of committee, a group of Republican lawmakers in Wyoming even sought to “phase out” electric vehicle sales to protect the state’s oil and gas industry. The bill’s lead sponsor later said he supports electric vehicles, and was just trying to send a message to California, which made plans to eventually ban gas-powered vehicles last August.

And while Georgia is often held up as a leader in building a new clean economy, having attracted more clean energy investments since the IRA passed than any other state, Republican lawmakers there recently enacted a tax on public electric vehicle charging.

None of this is particularly surprising or new. To some extent, climate and clean energy policy has long followed party lines. As political scientist Leah Stokes documents in her book Short Circuiting Policy, states like Texas and Ohio have a history of enacting anti-climate policies that slowed the growth of renewables. Those were in large part driven by special interest groups backed by utilities and the fossil fuel industry.

Mildenberger said these efforts are ramping up now because the IRA has made the threat to these industries much more significant. “Increasingly, as some of these technologies are no longer cost competitive in a pure market competition framework, they need to use policy as a rearguard action to try and maintain their market share.”

There is evidence that at least some of these policies, like defining natural gas as clean energy and preempting any bans on the fuel, trace back to special interest groups like the American Legislative Exchange Council and the American Gas Association. What’s new is a push to turn these issues into culture wars by painting natural gas use as a matter of freedom or identity. Republican lawmakers have described a rash of anti-ESG bills, which also have roots with industry groups, as a crackdown on “woke” investing.

But Hanna Breetz, a political scientist at Arizona State University told me it would be a mistake to attribute the trend purely to industry influence or the usual reactionary politics. That view overlooks two other very real factors that she sees contributing to an increasingly polarized environment. One is that people in rural states are legitimately concerned about what a decarbonized future means for them in terms of land use and extraction. They are going to bear the brunt of landscape impacts from vast new solar and wind farms and lithium mines.

The second is genuine risks to reliability from a grid powered by increasing amounts of renewables and batteries that’s also serving an increasing number of electric appliances. “There are some very serious concerns that have yet to be dealt with, particularly in the face of climate change and weather-related issues,” said Breetz. She pointed to a recent report warning of blackouts in some parts of the country this summer, which highlighted diminished capacity from natural gas and coal plants as one potential cause. “I think there's a lot less ideological opposition within utilities than many people assume, and that they are scared to death about a lot of these reliability concerns.”

It’s hard to untangle the role of each of these components — industry influence, party politics, land use concerns, and technical challenges — when they all feed into one another. The effect could intensify as more and more people experience a bad blackout or are faced with a solar farm being built in a place they hold dear.

But also, it might not. If all goes according to Biden’s plan, the IRA will be a countervailing force that brings new jobs and economic growth to areas where political support for clean energy is in short supply. The majority of clean energy project announcements since the IRA was passed are in states like Georgia, Arizona, and South Carolina. Think of the new battery belt emerging in the South, or how many renewable energy projects are popping in Republican-held congressional districts.

“In three or five years that might make some of the extreme rhetoric and policy positions that we're seeing right now on the Republican side of the aisle a little bit more challenging to hold,” said Mildenberger. “My view is that even in some of the more fossil fuel intensive parts of the United States, the question of the energy transition is not if, but when. And to help manage the global climate crisis, that ‘when’ needs to be really soon.”