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If you haven’t already, get to know the “border adjustment.”
While climate policy has become increasingly partisan, there also exists a strange, improbably robust bipartisan coalition raising support for something like a carbon tax.
There are lots of different bills and approaches floating out there, but the most popular is the “border adjustment” tax, basically an emissions-based tariff, which, as a concept, is uniquely suited to resolve two brewing trade issues. One is the European Union’s Carbon Border Adjustment Mechanism, which will force essentially everybody else to play by its carbon pricing system. Then there’s the fact that China powers its world-beating export machine with coal, plugged into an electrical grid that is far dirtier than America’s.
For Republicans, some kind of tax on imports would be a way of leveling the playing field in the face of what are, to their minds, punitive environmental restrictions on American energy producers and manufacturers. For Democrats, a border adjustment could be appealing both as a way to favor American manufacturing and as a way of encouraging other countries to clean up their grids.
There are currently two carbon border adjustment bills bouncing around the Senate, one introduced by Louisiana Republican Bill Cassidy — whose record on climate is far friendlier than many of his GOP colleagues’ — and the other by Rhode Island Democrat Sheldon Whitehouse, one of the most active and vocal Democratic senators on environmental issues.
In a hearing on the challenge of load growth before the Senate Committee on Energy and Natural Resources, Cassidy raised the issue of China’s energy mix, arguing that coal plants on the country’s Pacific coast mean at more pollutants in the United States.
“To the degree that our energy policy increases the cost of energy, and therefore encourages someone to move to China, we are actually worsening global greenhouse gas emissions because we’re increasing consumption of Chinese coal-fired electricity as opposed to clean-burning U.S. electricity,” Cassidy said during the hearing.
“Right on, brother,” the committee’s chair, Democrat Joe Manchin, responded.
Cassidy and Manchin both represent states that are major fossil fuel producers and are no one’s ideas of climate hawks — although they both support some version of permitting reform and Manchin’s was a crucial vote to pass the Inflation Reduction Act — they nevertheless represent two pillars of the idiosyncratic alliance that could get a border adjustment tax over the line. Add in Democratic climate hawks who are also interested in permitting reform such as Whitehouse and California Representative Scott Peters and Republicans who are, in their own way, open to some kind of climate change policy, including Cassidy and Alaska Senator Lisa Murkowski, and this thing starts to look possible.
The first step would be devising a way to calculate how clean the U.S. electricity system is compared to the rest of the world — and lo, there’s a bill for that too: the PROVE IT Act, which passed out of the Senate’s Energy and Natural Resources Committee in January.
That bill, introduced by Delaware Democrat Chris Coons and North Dakota Republican Kevin Cramer, would mandate the Department of Energy measure and report the emissions intensity for 17 categories of products (including fossil fuels) in the United States and a host of other countries. The intent of the bill is to demonstrate that, in many cases, U.S. manufacturing is cleaner than many other countries’, especially China, at least when it comes to greenhouse gas emissions.
The bill managed to win not just from Senators on both sides of the aisle, but also from industry groups that are often somewhere from skeptical to outright opposed to emissions restrictions. These include the American Petroleum Institute and the U.S. Chamber of Commerce. (The American Petroleum Institute is even gathering up a list of House Republicans who could support a version of the bill in that chamber, reported E&E News.) The bill has also been endorsed by a host of more centrist and right-leaning climate and environmental groups, including the Climate Leadership Council and Third Way, a moderate Democratic group.
Armed with the data from the PROVE IT Act, explained the Bipartisan Policy Center's Xan Fishman, the U.S. would be “able to use that in trade negotiations, or with a new border carbon policy.”
The time for the PROVE IT Act and then a border adjustment bill may be this year, Fishman told me, citing bipartisan support for the idea — or else sometime next year, when many of the Trump tax cuts expire, setting off a scramble for revenue to pay for extending popular tax breaks.
“When you have a big giant tax bill where you’re extending or creating new tax credits and you’re looking for revenue to offset that,” Fishman said, suddenly a border adjustment could look pretty handy.
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The state’s senior senator, Thom Tillis, has been vocal about the need to maintain clean energy tax credits.
The majority of voters in North Carolina want Congress to leave the Inflation Reduction Act well enough alone, a new poll from Data for Progress finds.
The survey, which asked North Carolina voters specifically about the clean energy and climate provisions in the bill, presented respondents with a choice between two statements: “The IRA should be repealed by Congress” and “The IRA should be kept in place by Congress.” (“Don’t know” was also an option.)
The responses from voters broke down predictably along party lines, with 71% of Democrats preferring to keep the IRA in place compared to just 31% of Republicans, with half of independent voters in favor of keeping the climate law. Overall, half of North Carolina voters surveyed wanted the IRA to stick around, compared to 37% who’d rather see it go — a significant spread for a state that, prior to the passage of the climate law, was home to little in the way of clean energy development.
But North Carolina now has a lot to lose with the potential repeal of the Inflation Reduction Act, as my colleague Emily Pontecorvo has pointed out. The IRA brought more than 17,000 jobs to the state, per Climate Power, along with $20 billion in investment spread out over 34 clean energy projects. Electric vehicle and charging manufacturers in particular have flocked to the state, with Toyota investing $13.9 billion in its Liberty EV battery manufacturing facility, which opened this past April.
North Carolina Senator Thom Tillis was one of the four co-authors of a letter sent to Majority Leader John Thune in April advocating for the preservation of the law. Together, they wrote that gutting the IRA’s tax credits “would create uncertainty, jeopardizing capital allocation, long-term project planning, and job creation in the energy sector and across our broader economy.” It seems that the majority of North Carolina voters are aligned with their senator — which is lucky for him, as he’s up for reelection in 2026.
SpaceX has also now been dragged into the fight.
The value of Tesla shares went into freefall Thursday as its chief executive Elon Musk traded insults with President Donald Trump. The war of tweets (and Truths) began with Musk’s criticism of the budget reconciliation bill passed by the House of Representatives and has escalated to Musk accusing Trump of being “in the Epstein files,” a reference to the well-connected financier Jeffrey Epstein, who died in federal detention in 2019 while awaiting trial on sex trafficking charges.
The conflict had been escalating steadily in the week since Musk formally departed the Trump administration with what was essentially a goodbye party in the Oval Office, during which Musk was given a “key” to the White House.
Musk has since criticized the reconciliation bill for not cutting spending enough, and for slashing credits for electric vehicles and renewable energy while not touching subsidies for oil and gas. “Keep the EV/solar incentive cuts in the bill, even though no oil & gas subsidies are touched (very unfair!!), but ditch the MOUNTAIN of DISGUSTING PORK in the bill,” Musk wrote on X Thursday afternoon. He later posted a poll asking “Is it time to create a new political party in America that actually represents the 80% in the middle?”
Tesla shares were down around 5% early in the day but recovered somewhat by noon, only to nosedive again when Trump criticized Musk during a media availability. The shares had fallen a total of 14% from the previous day’s close by the end of trading on Thursday, evaporating some $150 billion worth of Tesla’s market capitalization.
As Musk has criticized Trump’s bill, Trump and his allies have accused him of being sore over the removal of tax credits for the purchase of electric vehicles. On Tuesday, Speaker of the House Mike Johnson described Musk’s criticism of the bill as “very disappointing,” and said the electric vehicle policies were “very important to him.”
“I know that has an effect on his business, and I lament that,” Johnson said.
Trump echoed that criticism Thursday afternoon on Truth Social, writing, “Elon was ‘wearing thin,’ I asked him to leave, I took away his EV Mandate that forced everyone to buy Electric Cars that nobody else wanted (that he knew for months I was going to do!), and he just went CRAZY!” He added, “The easiest way to save money in our Budget, Billions and Billions of Dollars, is to terminate Elon’s Governmental Subsidies and Contracts. I was always surprised that Biden didn’t do it!”
“In light of the President’s statement about cancellation of my government contracts, @SpaceX will begin decommissioning its Dragon spacecraft immediately,” Musk replied, referring to the vehicles NASA uses to ferry personnel and supplies to and from the International Space Station.
The company will use the seed funding to bring on more engineers — and customers.
As extreme weather becomes the norm, utilities are scrambling to improve the grid’s resilience, aiming to prevent the types of outages and infrastructure damage that often magnify the impact of already disastrous weather events. Those events cost the U.S. $182 billion in damages last year alone.
With the intensity of storms, heat waves, droughts, and wildfires growing every year, some utilities are now turning to artificial intelligence in their quest to adapt to new climate realities. Rhizome, which just announced a $6.5 million seed round, uses AI to help assess and prevent climate change-induced grid infrastructure vulnerabilities. It’s already working with utilities such as Avangrid, Seattle City Light, and Vermont Electric Power Company to do so.
“With a combination of utility system data and historical weather and hazard information, and then climate projection information, we can build a full profile of likelihood and consequence of failure at a very high resolution,” Rhizome co-founder and CEO Mish Thadani told me.
While utilities often have lots of data about the history of their assets and the surrounding landscape, there’s no real holistic system to bring together these disparate datasets and provide a simple overview of systemic risk across a range of different scenarios. Utilities usually rely on historical data to make decisions about their assets — a practice that’s increasingly unhelpful as climate change makes previously rare extreme weather events more likely.
Rhizome aims to solve both problems, serving as an integrated platform for risk assessment and mitigation that incorporates forward-looking climate modeling into its projections. The company measures its success against modeled counterfactuals that determine avoided power outages and the economic losses associated with these hypothetical blackouts. “So we can say the anticipated failure rate across the system for a Category 1 hurricane was X, and after you invest in the system, it will be Y,” Thadani told me. “Or if you’ve made a bunch of investments in the system, and you do experience a Category 1 hurricane, what would have been the failure rate had those investments not been made?”
This allows utilities to provide regulators with much more robust data to back up their funding requests. So while Thadani expects electricity prices to continue to rise and ratepayers to bear the burden, he told me that Rhizome can ultimately help regulators and utilities keep costs in check by making sure that every dollar spent on risk mitigation goes as far as possible.
Rhizome’s seed round, which came in oversubscribed, was led by the early-stage tech-focused venture firm Base10 Partners, which aims to automate traditional sectors of the economy. Additional funders include climate investors MCJ and CLAI, as well as the wildfire-focused venture firm Convective Capital. In addition to its standard risk assessment system, Rhizome has also developed a wildfire-specific risk mitigation tool. This quantifies not only how likely a hazard is to occur and its potential impact on utility infrastructure, but also the probability that an equipment failure would spark a wildfire, based on the geography of the area and historical ignition data.
Thadani told me that he considers evaluating wildfire risk “to be the next step in a sequence” as a utility evaluates the threats to its system overall. So while customers can choose to adopt either the standard product or the wildfire-specific product, many could gain utility from both, he said. The company has also developed a third offering specifically tailored for municipal and cooperative utilities. This more affordable system doesn’t provide the same machine learning-powered cost-benefit metrics, but can still help these smaller entities evaluate their infrastructure’s vulnerability.
Right now, Rhizome has a “lean and mighty” team of just 11 people, Thadani told me. With this latest raise, he said that the company will immediately hire five or six engineers, primarily to do further research and development. As Rhizome looks to onboard more and larger customers, it’s planning to incorporate more advanced modeling features into its platform and operate it increasingly autonomously, such that the model can retrain itself as new weather, climate, and utility data becomes available.
The company is out of the pilot phase with most of its customers, Thadani said, having signed multiple enterprise software contracts. That’s big, as utilities have gained a reputation for showing an initial appetite for testing innovative technologies, only to balk at the cost of full-scale deployment. Thadani told me Rhizome has been able to avoid this so-called “pilot purgatory” by making a point to engage with senior-level stakeholders at utilities — not just the innovation teams — to “graduate from that pilot ecosystem more quickly.”