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Wait, is the climate policy landscape … in better shape than it looks?
Just over a year ago, President Trump passed the One Big Beautiful Bill Act. It repealed many of the Biden administration’s most aggressive climate policies, including tax credits for solar and wind energy.
Although those policies are gone, the emissions cuts they achieved remain largely intact — at least in the power sector, according to a new study that we’re covering exclusively at Heatmap. Lily Bermel, the report’s author and a visiting fellow at the Columbia Center on Global Energy Policy, argues that at least where energy generation is concerned, the glass is more than “half full.”
On this episode of Shift Key, Lily joins Rob to discuss what we learned from Biden’s big climate law, why it likely never would have achieved its projected emissions declines (at least not without a tremendous transmission buildout), and how studying its legacy changed her mind about policy going forward.
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: Given that the IRA, in retrospect, in the power sector, kind of resolved any economic issue you would have making a project pencil out and revealed all these non-economic issues that actually constrain development, we are now looking at a political environment where we’re switching from mourning the IRA to saying, okay, what should happen next? And my colleague Emily Pontecorvo recently wrote a story about this question. But I think one of the big questions going forward, especially if Democrats take Congress at the end of this year is, well, should they fight to restore the tax credits? I can even see a world where restoring the tax credits becomes something people insist on to get permitting reform or something.
After writing this report, did you come to the conclusion that Democrats should restore the wind and solar tax credits? Is that the most urgent priority for climate policy?
Lily Bermel: In writing this report, I became quite confident that I don’t think it’s worth the bang for buck in restoring those wind and solar tax credits, and instead that the supply side constraints are the real issue that we need to focus on. I did this lag analysis where if you take a given year, say 2031, and you see that the IRA trajectory would have deployed like more than 300 gigawatts of solar, how many years later would the [OBBBA] scenario do that? There’s only a two and a half-year lag, or gap. And so in restoring the clean energy tax credits, you are only buying back two and a half years’ worth of deployment, which, at least for me, was a lot smaller than I had thought.
Meanwhile, both scenarios have a literal cap in them about how much they can build and how fast they can build it. So even if you buy back that little two and a half-year average annual lag, you’re going to run up to the exact same ceiling. So restoring the tax credits brings you closer to that ceiling, while permitting reform will completely lift the ceiling and be a rising tide that lifts all boats.
You can find a full transcript of the episode here.
Mentioned:
The “Glass Half Full” report
More from Rob on Lily’s findings
From Heatmap: The Wind and Solar Tax Credits Are About to Expire. Will They Come Back?
Heatmap’s cheat sheet on how the One Big Beautiful Bill Act changed America’s clean energy law
Previously on Shift Key: What Has All This Back-and-Forth Climate Legislating Bought Us?
Jesse Jenkins’ paper on transmission’s role in achieving the IRA’s goals
Brendan Duke’s policy affordability framework
This episode of Shift Key is sponsored by ...
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Music for Shift Key is by Adam Kromelow.
