When many consider policy responses to climate change, familiar terms such as carbon taxes, emissions limits, and cap-and-trade come to mind, primarily from federal environmental law discussions dating back to the Clinton and Bush administrations. However, repeated failures in Washington to enact these solutions have contributed to a prevailing sense of inaction on climate change.
Recent developments suggest a shift in the narrative. The Inflation Reduction Act, passed in 2022, is a landmark climate policy for the United States. This legislation offers substantial tax credits for renewable energy, batteries, hydrogen, and electric vehicles. It has mobilized hundreds of billions of dollars, achieving through industrial policy what regulation alone might not have accomplished, and doing so in innovative ways unexpected by even the most ambitious environmental regulators. Advances in scientific innovation have further driven the cost-competitiveness of renewables and energy storage, independent of these tax incentives.
Moreover, U.S. policymakers are increasingly focusing beyond Congress. State public utility commissions, once seen as sleepy agencies, are now playing a crucial role. These bodies regulate electric and natural gas utilities, implementing policies that address climate change and maintain low energy rates. For instance, 30 states’ portfolio requirements aim to expand clean electricity generation. Federally, the Federal Energy Regulatory Commission (FERC) is facilitating a vital expansion of the interstate grid, essential for the transition to a resilient and cleaner energy mix.
The Inflation Reduction Act’s focus is broadened by state-specific initiatives. Public utility commissions in multiple states are actively working on expanding clean electricity generation while maintaining low energy rates. At a federal level, the Federal Energy Regulatory Commission (FERC) is addressing critical infrastructure needs by facilitating interstate grid expansion. This builds resilience and supports the transition to a more sustainable energy portfolio.
Increasingly, climate policy in the U.S. is moving from environmental law towards energy regulation and industrial policy. This transition highlights a broader understanding that merely regulating pollution is insufficient. The ultimate goal lies in replacing trillions of dollars of fossil fuel infrastructure with an expansive buildout of clean energy, which necessitates clarity and urgency. By driving forward with this replacement, America can address environmental injustice, support communities in transition, and mitigate climate change impacts.
For more insights into this evolving landscape, see the original article by Stanford Law.