As America Backslides On Clean Energy, States Will Fill The Leadership Void
A slew of federal legislation and executive action, including President Trump's big tax bill, signed into law on the Fourth of July, is dismantling the policy and economic foundation that in recent years unleashed hundreds of billions of dollars in private investment into clean technology across the U.S.
It's not just a loss for the climate – it's also a blow to U.S. competitiveness in a changing global economy. It means less new power at a time of growing electricity demand, fewer manufacturing jobs on U.S. soil, and weaker footing in key strategic industries that will command the 21st century.
But as much as this backsliding in Washington is regrettable, it presents an opportunity in states across the country. Having seen federal clean energy policy drive unprecedented clean energy investment nationwide, state policymakers know full well what's at stake – for the climate, yes, but also for jobs, energy affordability, and innovation. If the administration won't deliver for the nation, governors and state lawmakers should seize the opportunity for their communities, businesses, and economies. Here's how.
Grid modernization
America's aging electric grid is in serious need of modernization to efficiently and affordably deliver power across the economy. It's especially urgent as energy demand spikes with the growth of artificial intelligence, advanced manufacturing, and vehicle electrification. Even states that are building new clean energy at a record pace – such as Texas, New Mexico, and Kansas – will face challenges in powering their economies without new capacity in the transmission lines that carry power over long distances.
States can meet this challenge by both improving existing transmission infrastructure and making it easier to build new transmission lines. Some already have, with action in red, blue, and purple states alike – from South Carolina to Ohio to Colorado to Oregon. Policymakers should encourage utilities and other transmission line owners to modernize existing infrastructure, while also responsibly reform their permitting processes to make it easier to build new transmission lines so we can adequately meet our growing electricity needs without sending utility rates skyrocketing.
Affordable clean cars
The federal government hasn't merely targeted federal policies designed to support electric vehicle adoption. It has also taken aim at state policies, with Congress acting to revoke federal approval for vehicle standards adopted by California and several others under the Clean Air Act – even though these standards had wide support from businesses because they provided a clear, predictable timeline to increase clean vehicle sales and adoption.
Despite the federal overreach, states still have a significant opportunity to support electric vehicle growth in the U.S. In June, 11 governors announced the launch of the Affordable Clean Cars coalition, which will collaborate across state lines on policies and investments that make it easier to own and operate electric vehicles. With their work just beginning, more states ought to join the coalition to help businesses and consumers access the cost-saving vehicles they want while bolstering a technology that will be critical to U.S. competitiveness in the coming years.
California reauthorization
California lawmakers face an urgent and crucial task in the coming weeks. For more than a decade, the Golden State has operated one of the nation's most important climate policies – its cap-and-trade program. It's exactly the kind of market-based policy approach that economists have long cited as the most efficient and affordable way to reduce carbon pollution, by putting a price on the vast risks of climate change, encouraging the private sector to act accordingly to reduce pollution while using the funds to invest in solutions that better serve the economy. And in California, the fourth largest economy in the world, it has worked.
But with the program due to expire in 2030, uncertainty about its long-term future is making it less effective and reducing revenue by billions of dollars that could be used to invest in communities, including by taking action to protect against climate-driven threats and rising energy bills. Lawmakers must reauthorize the cap-and-trade program through 2045 before the current legislative session ends in September. Providing a clear, predictable, and market-based policy foundation will position California to continue leading the nation in climate and clean energy policy at a time when that leadership is so strongly needed.
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