The end of the climate hawk era

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The end of the climate hawk era

As Philip Rossetti recently noted, policymakers at every level of government have been drawn to the subject of energy regulation. The permitting reform debates are fierce and high-stakes: Energy costs are rising in America, and recent fights over renewable energy subsidies, electric vehicles, and transmission policy have polarized energy politics in recent years. Constructive policy outcomes are far from assured.

Today’s energy policy disputes are contentious, but they are miles from the deployment vs. innovation wars that divided clean energy advocates last decade, which The Dispatch examines here.

On one side of those debates were those who insisted on deploying off-the-shelf clean energy solutions, like solar panels and wind turbines, arguing that climate change was too urgent a problem to rely on unproven technological innovations. This was framed as a zero-sum choice. “We have cost-effective technologies to stave off the worst impacts of climate change,” wrote clean energy entrepreneur Jigar Shah in 2013. “Yet, instead of focusing on deployment, many proven climate change solutions are gathering dust.”

On the other side were advocates who argued that these existing technologies were insufficient to the task of significantly reducing greenhouse gas emissions, and that innovations were needed in renewable energy, battery storage, nuclear power, carbon capture, industrial processes, transportation, and beyond. “Most governments, including the United States, have prioritized policies supporting regulation and subsidies over clean energy innovation policies,” energy analysts Matthew Stepp and Megan Nicholson wrote for the Information Technology and Innovation Foundation in 2013.

These debates surged in the early years of what could be summarized as the era of the climate hawk. Over the course of the 2010s, climate change became a priority not just for progressives and Democrats in the United States, but for elites, elected officials, and executives all over the world. The question was not whether to prioritize climate action, but how to do so. Should existing technologies be deployed as fast as possible to meet the looming climate targets embraced by world leaders? Or should there be investment in unproven technologies to expand the clean energy toolkit?

The deployment of emerging technologies, whether driven by markets or subsidies or both, is an important part of the broader process of innovation. But the notion of already having “all the technologies we need” isn’t particularly logical. Policies and investments to support both commercial and nascent technologies could and did coexist.

And tellingly, the outcome of these knock-down, drag-out arguments was compromise, not zero-sum capitulation on either side. Solar, wind, and electric vehicle deployment rose steadily over the last decade, as did the cost of subsidizing these technologies. But investors and policymakers also redoubled support for next-generation technologies. The deployment vs. innovation wars ultimately delivered major victories to both factions. The 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act poured hundreds of billions of dollars into both deployment subsidies and infrastructure and innovation investments. The rising tide of elite climate concern lifted all boats.

That debate, and its détente, may seem rather quaint today. The second Trump administration has dismantled many of the Biden-era energy policies, along with the raft of climate regulations and programs built up over the last generation. Republicans’ One Big Beautiful Bill Act repealed hundreds of billions in federal deployment subsidies for solar, wind, and electric vehicles. And while tax credits for next-generation technologies like nuclear and geothermal energy were extended, the Department of Energy has canceled innovation investments supporting hydrogen, carbon removal, batteries, and other nascent technologies. Meanwhile, the administration has walked back the regulations, scientific findings, and public reporting governing carbon emissions. The entire American federal climate and clean energy effort has been overturned.

But this phenomenon is much bigger than the influence of Donald Trump. After all, clean energy subsidies, public investments in innovation, and international climate ambitions rose during the first Trump administration. This time around, inflation, booming energy demand, and global supply chain disruptions have prompted more society-wide shifts in priorities. For consumers, investors, and elected officials, “net-zero” is out, and energy affordability is in.

Climate advocates are understandably troubled by these new circumstances, and by the Trump administration’s assault on energy and climate policy. But there may be a silver lining: the emergence of a new consensus on the need for both innovation and regulatory reform.

Republicans aren’t likely to create any substantial new clean energy policies over the next few years. But it is also unlikely for Democrats to pass anything like the Inflation Reduction Act when they next gain power, either. Concerns about inflation and the federal debt are likely to persist for years to come, a marked shift from the economic circumstances that prevailed during the era of the climate hawk. Democrats also appear to have finally acknowledged that climate change is a low priority even for their own voters. Not only will there likely be no “IRA 2.0,” but it’s also unclear whether any future Democratic administration will reinstate the emissions reporting program and regulations pursued by the Obama and Biden administrations. There’s even a wellspring of old-school Democratic support for oil and gas development, as turbine and refinery capacity shortages drive energy prices up in blue states.

Meanwhile, the need for a wider portfolio of affordable energy technologies has become impossible to ignore. Solar, wind, and electric vehicles will continue to deepen market share despite a lack of federal subsidies. But increasingly few expect these technologies alone to overcome looming energy supply shortfalls, let alone to power entire energy systems later this century. Investor and policymaker enthusiasm for nuclear, geothermal, carbon removal, and other technologies has ticked up on the winds of electrification and data center expansion.

This new energy innovation push will require not just public and private investments in emerging technologies, but significant regulatory reforms. Fortunately, many players in the new energy abundance era understand that innovation investments and regulatory reform are not mutually exclusive.

The current government shutdown notwithstanding, Congress appears poised to take another shot at reforms to the National Environmental Policy Act (NEPA). Advocates of all stripes increasingly agree that NEPA obstructs the expansion of energy infrastructure and manufacturing. And it’s not just NEPA. Any congressional permitting deal is likely to include reforms of long-distance transmission planning and siting procedures. The Endangered Species Act, the Clean Water Act, the National Historic Preservation Act, the Jones Act, the General Mining Law, and a number of other federal statutes impose further regulatory barriers to energy supply and investment.

Then there are the technology-specific regulations. All the innovation and deployment dollars in the world won’t overcome outdated reactor licensing and radiological health regulations overseen by the Nuclear Regulatory Commission. Any future for large-scale carbon removal will involve so-called “Class VI” wells, specially engineered repositories that currently require a cumbersome EPA classification process for geologic storage of carbon dioxide. Bureau of Land Management leasing procedures will make or break many enhanced geothermal projects in the coming decades. Even more mature energy technologies—like solar, wind, electric vehicles, and oil and gas—would benefit from regulatory relief.

And these regulatory reforms are not an alternative to subsidies or demonstration programs for new technologies, but rather necessary preconditions for the commercialization component of the broader innovation process. The climate hawks’ era may be over, but so too are their battles over deployment vs. innovation: Achieving energy abundance will require both innovation and regulatory reform.

This story was produced by The Dispatch and reviewed and distributed by Stacker.