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As blue states double down on renewables, a backlash is growing in red 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.”
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Current conditions: States left flooded from recent severe storms are now facing freezing temperatures • Firefighters are battling blazes in Scotland due to unusually warm and dry weather • Hospitals in India are reporting a 25% rise in heat-related illnesses compared to last year. Yesterday the country’s northern state of Rajasthan reached 115 degrees Fahrenheit, about 13 degrees higher than seasonal norms.
President Trump’s sweeping new tariffs came into effect at 12:01 a.m. on Wednesday, rattling the world’s markets and raising the risk of a global trade war. The levies, which include a 104% tariff on Chinese imports, triggered a mass sell-off in U.S. Treasury bonds, hiking yields as investors worry about a potential recession and flock to alternative safe-haven investments. The price of oil fell for the fifth day in a row to its lowest since 2021, with Brent futures at about $61 per barrel, well below the $65 level that oil producers need in order to turn a profit drilling new wells nationwide. As Heatmap’s Robinson Meyer explained recently, the tariffs are an outright catastrophe for the oil industry because they threaten a global downturn that would hurt oil demand at a time when oil cartel OPEC+ is increasing its output. Trump’s slate of tariffs will impact the cost of just about everything, from gasoline to e-bikes to LNG to cars. China imposed retaliatory tariffs, increasing them from 34% to 84% in response to the U.S. escalation. Meanwhile, the European Union will vote today on whether to impose its own retaliatory fees. European shares plummeted, as did Asian and Australian stocks.
As Heatmap’s Emily Pontecorvo reported today, a new study published in the journal Nature Climate Change finds that the transition to clean energy could create a world that is less exposed to energy price shocks and other energy-related trade risks than the world we have today. “We have such a concentration of fossil resources in a few countries,” Steven Davis, a professor of Earth system science at Stanford and the lead author of the study, told Pontecorvo. Transition minerals, by contrast, are less geographically concentrated, so “you have this ability to hedge a little bit across the system.”
The White House issued several executive orders on Tuesday aimed at boosting U.S. coal production and use, pointing to rising electricity demand from artificial intelligence. The series of orders direct federal agencies to:
Trump also said he plans to invoke the Defense Production Act to spur mining operations, “a move that could put the federal purse behind reviving the fading industry,” Reutersreported. Coal is the dirtiest fossil fuel, and its use has been in decline since 2007. As of last year, wind and solar combined surpassed coal for U.S. electricity generation.
President Trump signed a separate executive order on Tuesday that targets climate laws at the state level and seeks to remove threats to U.S. “energy dominance,” including “illegitimate impediments to the identification, development, siting, production, investment in, or use of domestic energy resources — particularly oil, natural gas, coal, hydropower, geothermal, biofuel, critical mineral, and nuclear energy resources.” The order references “state overreach” and suggests that some state and local governments are overstepping their constitutional authority in regulating energy through interstate trade barriers or fines on energy producers. It calls out New York and Vermont for their climate change superfund laws that require fossil fuel companies to pay for their planet-warming greenhouse gas emissions. And it mentions California’s carbon cap-and-trade system.
The executive order directs the U.S. attorney general to compile a list of all state and local laws “purporting to address ‘climate change,’” along with ESG, environmental justice, carbon taxes, and anything involving “carbon or ‘greenhouse gas’ emissions,” and put a stop to their enforcement. “The federal government cannot unilaterally strip states’ independent constitutional authority,” New York Governor Kathy Hochul and New Mexico Governor Michelle Lujan Grisham said in a statement. “We are a nation of states — and laws — and we will not be deterred. We will keep advancing solutions to the climate crisis that safeguard Americans’ fundamental right to clean air and water, create good-paying jobs, grow the clean energy economy, and make our future healthier and safer.”
Wood Mackenzie issued its annual U.S. wind energy report this week. It finds that 2024 marked the worst year for new onshore wind capacity in the past decade, with just 3.9 gigawatts installed. Through 2029, the firm expects developers to install another 33 gigawatts of onshore capacity, 6.6 gigawatts of offshore capacity, and carry out 5.5 gigawatts of upgrades and refurbishings. The five-year outlook marks “a 40% decrease quarter-on-quarter from a previous total of 75.8 gigawatts.” The report warns of enduring “uncertainty” thanks to the Trump administration’s attacks on the wind industry. “Growth will happen, but it’s going to be slower,” wrote Michelle Lewis at Electrek. “[Trump] has managed to get some projects canceled, and he’ll make things more of a slog over the next few years.”
President Trump has pulled the U.S. out of international talks to decarbonize the shipping industry and vowed to reciprocate against any fees on U.S. ships, Politicoreported. The International Maritime Organization's Maritime Environmental Protection Conference is unfolding this week in London, where negotiators are trying to agree on a policy to curb shipping pollution through carbon taxation. Shipping accounts for about 3% of global greenhouse gas emissions. Trump reportedly sent a letter to the conference saying “the U.S. rejects any and all efforts to impose economic measures against its ships based on GHG emissions or fuel choice. Should such a blatantly unfair measure go forward, our government will consider reciprocal measures so as to offset any fees charged to U.S. ships and compensate the American people for any other economic harm from any adopted GHG emissions measures.”
“What’s next, a mandate that Americans must commute by horse and buggy?”
–Kit Kennedy, a managing director at the Natural Resources Defense Council, in response to Trump’s executive orders aimed at revitalizing the U.S. coal industry.
Rob and Jesse get into the nitty gritty on China’s energy policy with Joanna Lewis and John Paul Helveston.
China’s industrial policy for clean energy has turned the country into a powerhouse of solar, wind, battery, and electric vehicle manufacturing.
But long before the country’s factories moved global markets — and invited Trump’s self-destructive tariffs — the country implemented energy and technology policy to level up its domestic industry. How did those policies work? Which tools worked best? And if the United States needs to rebuild in the wake of Trump’s tariffs, what should this country learn?
On this week’s episode of Shift Key, Rob and Jesse talk with two scholars who have been studying Chinese industrial policy since the Great Recession. Joanna Lewis is the Provost’s Distinguished Associate Professor of Energy and Environment and Director of the Science, Technology and International Affairs Program at Georgetown University's School of Foreign Service. She’s also the author of Green Innovation in China. John Paul Helveston is an assistant professor in engineering management and systems engineering at George Washington University. He studies consumer preferences and market demand for new technologies, as well as China’s longstanding gasoline car and EV industrial policy. Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap, and Jesse Jenkins, a professor of energy systems engineering at Princeton University.
Subscribe to “Shift Key” and find this episode on Apple Podcasts, Spotify, Amazon, or wherever you get your podcasts.
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Here is an excerpt from our conversation:
Robinson Meyer: One kind of classical hard problem about industrial policy is selecting the technology that is going to eventually be a winner. And there’s a few ways to get around this problem. One is to just make lots of bets.
One thing that’s been a little unclear to me about the set of technology bets that China has made is that it has seemed to pick a set of technologies that are now extremely competitive globally, and it did seem to pick up on those technologies before Western governments or firms really got to them. Is that entirely because China just made a bunch of technology bets and it happened that these are the ones that worked out? Is it because China could look ahead to the environmental needs of the world and the clean development needs of the world and say, well, there’s probably going to be a need for solar? There’s probably going to be a need for wind? There’s probably going to be a need for EVs? Or is it a third thing, which is that China’s domestic needs, its domestic energy security needs, just happen to align really well with the direction of development that the world is kind of interested in moving in anyway.
John Paul Helveston: All of the above. I don’t know — like, that’s the answer here. I’ll add one thing that’s a little bit nuanced: There’s been tremendous waste. I’ll just put that out there. There’s been all kinds of investments that did not pan out at all, like semiconductors for a long, long time. Just things that didn’t work.
I think where China has had a lot of success is in areas where … It’s like the inverse of what the United States innovation ecosystem does well. China’s ecosystem is really driven around production, and a lot of that is part of the way the government’s set up, that local provinces have a ton of power over how money gets spent, and often repurpose funds for export-oriented production. So that’s been a piece of the engine of China’s economic miracle, is mass producing everything.
But there’s a lot of knowledge that goes along with that. When you look at things like solar, that technology goes back many, many decades for, you know, satellites. But making it a mass produced product for energy applications requires production innovations. You need to get costs down. You need to figure out how to make the machine that makes the machine. And that is something that the Chinese ecosystem does very well.
So that’s one throughline across all of these things, is that the technology got to a certain level of maturity where production improvements and cost decreases were the bigger things that made them globally competitive. I don’t think anyone would be considering an EV if we were still looking at $1,000 a kilowatt hour — and we were there just 15 years ago. And so that’s the big thing. It’s just production. I don’t know if they’ve been exceptionally good at just picking winners, but they’re good at picking things that can be mass produced.
Music for Shift Key is by Adam Kromelow.
That’s according to new research published today analyzing flows of minerals and metals vs. fossil fuels.
Among fossil fuel companies and clean energy developers, almost no one has been spared from the effects of Trump’s sweeping tariffs. But the good news is that in general, the transition to clean energy could create a world that is less exposed to energy price shocks and other energy-related trade risks than the world we have today.
That’s according to a timely study published in Nature Climate Change on Wednesday. The authors compared countries’ trade risks under a fossil fuel-based energy economy to a net-zero emissions economy, focusing on the electricity and transportation sectors. The question was whether relying on oil, gas, and coal for energy left countries more or less exposed than relying on the minerals and metals that go into clean energy technologies, including lithium, cobalt, nickel, and uranium.
First the researchers identified which countries have known reserves of which resources as well as those countries’ established trading partners. Then they evaluated more than a thousand pathways for how the world could achieve net-zero emissions, each with different amounts or configurations of wind, solar, batteries, nuclear, and electric vehicles, and measured how exposed to trade risks each country would be under each scenario.
Ultimately, they found that most countries’ overall trade risks decreased under net-zero emissions scenarios relative to today. “We have such a concentration of fossil resources in a few countries,” Steven Davis, a professor of Earth system science at Stanford and the lead author of the study, told me. Transition minerals, by contrast, are less geographically concentrated, so “you have this ability to hedge a little bit across the system.”
The authors’ metric for trade risk is a combination of how dependent a given country is on imports and how many trading partners it has for a given resource, i.e. how diverse its sourcing is. “If you have a large domestic supply of a resource, or you have a large trade network, and you can get that resource from lots of different trading partners, you're in a relatively better spot,” Davis said.
Of course, this is a weird time to conclude that clean energy is better equipped to withstand trade shocks. As my colleagues at Heatmap have reported, Trump’s tariffs are hurting the economics of batteries, renewables, and minerals production, whether domestic or not. The paper considers risks from “random and isolated trade shocks,” Davis told me, like losing access to Bolivian lithium due to military conflict or a natural disaster. Trump’s tariffs, by contrast, are impacting everything, everywhere, all at once.
Davis embarked on the study almost two years ago after working as a lead author of the mitigation section of the Fifth National Climate Assessment, a report delivered to Congress every four years. A lot of the chapter focused on the economics of switching to solar and wind and trying to electrify as many end uses of energy as possible, but it also touched on considerations such as environmental justice, water, land, and trade. “There's this concern of having access to some of these more exotic materials, and whether that could be a vulnerability,” he told me. “So we said, okay, but we also know we're going to be trading a lot less fossil fuels, and that is probably going to be a huge benefit. So let's try to figure out what the net effect is.”
The study found that some more affluent countries, including the United States, could see their energy security decline in net-zero scenarios unless their trade networks expand. The U.S. owns 23% of the fossil reserves used for electricity generation, but only 4% of the critical materials needed for solar panels and wind turbines.
One conclusion for Davis was that the U.S. should be much more strategic about its trade partnerships with countries in South America and Sub-Saharan Africa. Companies are already starting to invest in developing mineral resources in those regions, but policymakers should make a concerted effort to develop those trade relationships, as well. The study also discusses how governments can reduce trade risks by investing in recycling infrastructure and in research to reduce the material intensity of clean energy technologies.
Davis also acknowledged that focusing on the raw materials alone oversimplifies the security question. It also matters where the minerals are processed, and today, a lot of that processing happens in China, even for minerals that don’t originate there. That means it will also be important to build up processing capacity elsewhere.
One caveat to the paper is that comparing the trade risks of fossil fuels and clean energy is sort of apples and oranges. A fossil fuel-based energy system requires the raw resource — fuel — to operate. But a clean energy system mostly requires the raw materials in the manufacturing and construction phase. Once you have solar panels and wind turbines, you don’t need continuous commodity inputs to get energy out of them. Ultimately, Davis said, the study’s conclusions about the comparative trade risks are probably conservative.
“Interrupting the flow of some of these transition materials could slow our progress in getting to the net zero future, but it would have much less of an impact on the actual cost of energy to Americans,” he said. “If we can successfully get a lot of these things built, then I think that's going to be a very secure situation.”