Across the political spectrum, one hears that America needs more transmission lines to decarbonize its grid, to lower costs, to increase renewable energy deployment, to interconnect large data center loads, to ward off blackouts, and so on. Different political factions see very different roles for the federal government to play in that development, from permitter to market maker to planner to builder.

There’s one point that unifies the factions, however: that those dastardly electric utilities stand in the way. From the libertarians at R Street, to the center right at Niskanen Center, to the progressive left at Roosevelt Institute, to the ecosocialist left at Climate and Community Institute, advocates of major transmission expansion identify the utilities—with their old-fashioned public service regulation, monopoly territories, and vertical integration—as a major obstacle to overcome.

For the Abundance camp, though, the slow expansion of transmission stems less from utility opposition than from federal permitting processes that are held up, too easily, by myriad private stakeholder groups. Permitting, thanks to its widespread recognition as a central factor in the transmission problem, is the angle of attack taken up by most legislative efforts to aid transmission expansion in recent years.

But these efforts come equipped with what the Breakthrough Institute’s Ted Nordhaus, Ryan Alimento, and Seaver Wang recently identified as stealth deregulation. To take their most high-profile example, the Energy Permitting Reform Act of 2024 was in part “an attempt to use transmission reform as a trojan horse to force states where utilities continue to be traditionally structured and regulated to allow competition from merchant power generators.”

Stealth deregulation of electricity markets in traditionally-served territories is the natural result of seeing utilities as the inherent problem and market competition as the inherent solution. As Nordhaus et al. point out, however, there are major benefits to the cost-of-service regulation and vertical integration of utilities that are swept away by this view. My collaborator Matt Huber and I have argued for “the utility of utilities” as well, emphasizing, for example, the benefits of this market structure for massive clean energy projects like offshore wind and nuclear power.

Preserving existing market structures isn’t a prescription for transmission expansion either. Any kind of market-neutral authority to site transmission lines between territories will immediately run into the battleground of allocating and recovering costs between them. For many liberals and progressives, this problem comes with a clear solution: put the federal government in charge. The recent Gridlocked report from Groundwork argues this most directly by proposing a new National Power Authority that can build transmission and generation alike, nationwide. There is, after all, a rich American history of federal public power systems like the Tennessee Valley Authority and the Bonneville Power Administration.

But let’s say we wave the magic wand of abundance and create a federal entity with decision-making authority on siting and even building major transmission lines, a true progressive victory. Before any steel goes into the ground, before it can “just build transmission,” this public authority must act as an umpire. Which resources deserve investment, what the benefits are, and how the costs should be allocated—adjudicating these questions is one of the major challenges lying underneath “permitting reform.”

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The progressive umpire problem

A magically conjured progressive authority for transmission expansion needs to be able to call balls and strikes, but advocates don’t appear to be playing the part.

First, consider the benefits of new transmission. Chief among them, according to some of the loudest voices for a stronger federal role, is increasing renewable energy generation. New transmission lines sited for prospective generation resources and paid for across a broad customer base unlocks renewables investment, like the CREZ example in Texas. With continent-spanning transmission lines, the argument goes, we can drive up the deployment of wind and solar generation and drive down the emissions rate.

Our federal umpire can’t take the benefits at face value, though. Deciding to socialize the network buildout that enables wider renewables integration comes with clear financial interests whispering in the federal government’s proverbial ear. That includes investors in renewables themselves, of course, but more importantly the many large corporate consumers hungry for renewable energy to substantiate their climate accounting goals. Last year hyperscalers Amazon, Google, Meta, and Microsoft signed 80% of all corporate renewables contracts, for example.

Former FERC Chair Mark Christie has written extensively on how this corporate interest behind public transmission investment warps the adjudication of cost-benefit tradeoffs. Yet transmission proponents largely paint a picture in which the only corporate interests lobbying to steer such decisions are the utilities. Meanwhile the Corporate Energy Buyers Association and other such trade groups consolidate the political interests of major energy consumers in much the same way their forebears lobbied for deregulation in decades past.

Now consider the costs of new transmission. That utilities often oppose transmission lines for undercutting their own local generation is not merely about their shareholders’ profits—private interest over public. The so-called stranded cost problem is a real one for the socialized assets of the rate base, the assets the utility invested in as part of performing their public service. But also, depending on the contracts around the power sales over the line, the existence of new transmission might impose a new operational burden on the utility, and therefore new costs.

Consider the example of the Plains and Eastern Clean Line project in the 2010s, a failed attempt by private developers to sell wind power from Oklahoma into Arkansas and the Tennessee Valley Authority via a large HVDC transmission line. TVA ultimately neglected to sign a long-term power-purchase agreement with the project, destroying its viability. Abundist author Marc J. Dunkelman explains these events in Why Nothing Works as TVA protecting its fossil-fueled power from competition with carbon-friendlier wind. (TVA’s massive nuclear fleet, and the debt it incurred to build it, goes unmentioned.) But that’s a bad call from the umpire.

From TVA’s perspective, the contract just didn’t make sense for ratepayers. “We’re looking at a power demand in the future that is flat, or declining slightly,” TVA’s then-CEO told reporters in 2017, “so we don’t anticipate needing major additions to power generation for a decade or more.”

Rejecting the contract for the Clean Line’s wind power meant TVA’s revenues went to public assets and public workers instead of private assets and their investors outside the Valley. That dynamic is not about utility profit; TVA doesn’t have any shareholders to enrich. It’s possible the imported wind power would’ve been so cheap that the avoided costs would make up for the lost revenues. But as wind power dispatched and delivered intermittently, Clean Line also would have imposed additional costs on TVA: the operational need to flexibly balance all that power. Utilities in RTO regions can rely on purchasing energy on demand from a private fleet of gas-powered generators competing to make a buck—exactly what enabled CREZ to tap into renewables potential in Texas—but not TVA.

The magic wand of abundance conjures an exciting progressive vision of public authority, in this case, to expand our transmission system. But without accurately recognizing cost-benefit tradeoffs—without paying attention to which interests are in the umpire’s ear and why—that public authority can’t be trusted to call balls and strikes fairly.

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What public power was for

When Franklin D. Roosevelt campaigned for Governor of New York in 1928, he characterized proposals for private hydroelectric development of the St. Lawrence River as “attempted robbery.” A few years later, as Governor, he established the New York Power Authority. Later, as President, he spearheaded yet more public power developments. “These great Government power projects,” Roosevelt stated at the Boulder (Hoover) Dam dedication in 1935, “will affect not only the development of agriculture and industry and mining in the sections that they serve, but they will also prove useful yardsticks to measure the cost of power throughout the United States.” The whole point of the Bonneville Power Administration, for example, was to deploy a transmission network that could deliver low-cost federal hydropower to the masses.

Today, however, we auction off public waters and public lands for private interests to develop into renewable power projects on a regular basis. It’s not robbery if you invite them to do it.

Federal transmission is pitched as a backstop to build the network that will deliver energy from such private, for-profit renewables projects. These generators aren’t public infrastructure projects that bear commemorative plaques or employ generations of workers, the kind that earns buy-in from locals. Instead, they’re hypothetical agglomerations of faceless, peopleless wind and solar farms that myriad competing private developers created. Local buy-in concentrates in the lucky landowners who will collect annual lease payments and creates bitterness in all their neighbors who lose out.

The power produced by these projects, that the federally-supported transmission would carry to distant loads, is intermittent and therefore less directly useful to a receiving utility than the firm, dispatchable hydroelectric power of old. That’s where stealth deregulation comes in, to fertilize the soil with new market structures that prioritize the offering and buying of such power. Meanwhile, utility bill increases in territories like PJM stem largely from capacity prices, and these non-firm resources offer less accredited capacity value than firm ones.

For a federal authority to be trusted with any of this, our vision of public power transmission expansion must be anchored instead to public resources with tangible public benefit—clean, firm power owned and operated at cost that puts people to work. It’ll have to play ball with utilities, too.

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A different public power template

What might such a program look like? Rather than dreaming of a public power system rivaling the New Deal in its ambition, we can find inspiration instead in the postwar federal transmission project known as the Pacific Intertie.

Under the Kennedy Administration in 1961, a federal task force initiated the planning of the Pacific Intertie, a collection of interregional transmission lines connecting federal hydropower in the Pacific Northwest, managed by the Bonneville Power Administration (BPA), down to load in California, reaching all the way to the municipal utility for Los Angeles. In its original form finished in 1970, the project consisted of two parts: dual AC transmission lines carrying roughly 2,500 MW across 940 miles and an HVDC line carrying 1,440 MW across 846 miles—the first HVDC transmission line in the United States and still the longest. Since then it’s been widened and expanded, to transfer even more power between the regions.

California utilities like Pacific Gas & Electric, then the country’s largest utility, needed more power to serve the state’s growing load, and Northwest hydropower looked like a good solution. By 1958 PG&E was in talks with BPA and an Oregon utility to build a far smaller line that would enable them to purchase federal hydropower. The public power ideologues of the Northwest threw their copious cold water onto that proposal: not only did the law require preference for public customers on sales of federal hydropower—unlike a behemoth like PG&E—they worried their regional power would be sucked dry by California. A Congressional resolution passed the next year ordered a halt to “all negotiations for any interconnection or sale of surplus power” until Congress could further study the issue. A firmer political coalition was needed.

In 1961 the Interior Secretary set up a federal task force led by BPA’s administrator to find a solution. Though great pains were taken to play ball with the utilities, the task force was driven by a public power ethos. The clearest path forward was, to them, for the federal government to build its own transmission lines from the Columbia River in Oregon down to Southern California. They drafted plans for various such pathways as bargaining chips against the utilities.

To beef up their opposition to Bonneville intrusion into their state, the California private utilities formed the California Power Pool, a seed that eventually blossomed into today’s CAISO. According to the newly formed power pool, there was “no need whatever for the Federal Government to spend vast sums of taxpayers’ money to build the transmission system the task force proposes.”

Over the next three years the political questions around ownership, preference, and regional allocation of the Intertie bounced around the task force, Congress, and Western governors. Democrats urged federal solutions and public preference, while Republicans in Congress, mostly aligned with the utilities against this scourge of socialism, tried to restrict BPA and encourage private enterprise. Though HVDC offered technical benefits for the lengthy project, it was really competition with the Soviet Union, who’d recently deployed the first HVDC line in the world, that drove the inclusion of this technology in the resulting project.

Even Canada became part of the political balancing act. To ensure regional power needs would continue to take priority, only surplus power could be sold to the new customers. BPA, however, didn’t quite have enough of that to go around. Meanwhile British Columbia was developing its own new hydroelectric projects and needed a market for their power. As BPA’s administrator explained years later, it was critical to Los Angeles that they receive firm power in any such transmission project, not just variable surplus, and it was exactly this firm demand from a growing customer base that sealed the deal for Canada.

Ultimately the task force reached a compromise with the utilities on a new, less government-controlled idea for the Intertie. Rather than a single federal authority building, owning, and recovering costs for the lines, they would be segmented by utility territories; those responsibilities would fall, separately, to each segment’s owner. The federal government would build and finance the segments that fell within its Oregon territory, while each other utility, public and private alike, would similarly build and finance their own. Not only would private utilities like Portland General Electric and the members of the California Power Pool plan and build their own segments of the lines, they’d collect their return on equity too. Markets would be preserved.

Though some in the West decried the proposal as a giveaway to private utilities, the task force set out clear ground rules, at the behest of Congressional Democrats, for those utilities’ participation. The chief requirement was that the public benefit should be equal to or greater than the hypothetical, all-federal designs for the Intertie that had served as the task force’s bargaining chip—a direct, postwar application of Roosevelt’s “yardstick” principle for public power during the New Deal. After months of study, the task force had priced out the costs involved in their alternative designs, and any proposals from utilities had to beat them. Two such segment proposals were denied on this basis.

Rather than acting merely as toll collectors, each utility in the Intertie needed to purchase some of the hydropower itself as well as offer up its own fossil-fueled power for purchase by BPA during the dry seasons. The utilities also absorbed, via their ratepayers, their shares of the overall project risk, in case it fell apart or the California demand never materialized.

At the terminus in California, the Los Angeles Department of Water and Power, a public utility, received about 700 MW over the innovative HVDC line. From the Oregon-Nevada border all the way down to Los Angeles, the equipment for the line was built and operated by LADWP but with ownership split between them, the private utility Southern California Edison, and a few smaller municipalities, all of whom helped to finance its construction.

After the 1970 dedication in Los Angeles, a Times editorial declared that it “may not look as romantic as the pyramids in the desert near Cairo, but it’s a lot more practical, and the towers and lines … are as awe inspiring as anything man has ever created.”

The Pacific Intertie’s task force fought for three years over ownership, preference, and regional allocation. What it never had to fight over was whose resource deserved a federal line, because the resource already belonged to the public. It never had to model speculative benefits, because Los Angeles was asking for firm power by the megawatt. It never had to allocate costs among rivals, because each participant financed its segment and recovered it through its own rates. And it never had to judge whether private participation served the public, because it wielded yardstick pricing. The private utilities kept their segments, their returns on equity, and their market structures—precisely the interests whose competing claims would be litigated before any federal authority today. Still the Pacific Intertie played the builder and not the umpire.

Part II of this essay argues that this combination serves as a template for solving the transmission problems of our own generation.

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Fred Stafford is a STEM professional and independent researcher on the power system, decarbonization, and public power. His newsletter can be found at PublicPowerReview.org. “Fred Stafford” is a pen name.

With domestic electricity consumption rising for the first time in a generation, a debate has erupted over how best to meet this new demand.

One camp argues that the fastest way to deal with load growth is through marginal and distributed improvements—by “getting more out of the grid we already have” with grid-enhancing technologies (GETs), capturing efficiency gains from electrified end-use technologies like heat pumps, and deploying distributed energy resources (DERs) like rooftop solar, battery storage, and virtual power plants (VPPs). The other camp seeks to streamline construction in the bulk power system with proposals to hasten siting and permitting for new transmission lines and interconnection for new power generation and for new large sources of load like data centers, chip fabs, metal refineries, and beyond.

The two approaches are not mutually exclusive; in fact, they can complement each other. Efficiencies and larger net supply can be unlocked on both the supply and distribution ends of the electric power system, and many DERs can indeed deploy quickly, “buying time” for the bulk power supply and transmission that will need to be built out in the coming years and decades.

But some in the first camp tend to pit the approaches against each other. To wit, a new series of reports by Rewiring America argues that tech companies should secure electricity by financing home upgrades, rather than funding new centralized generation. They describe this as a choice over whether hyperscaler grid investment “reinforces a model that concentrates wealth among large energy and technology companies, or builds one that lowers costs, strengthens communities, and centers households.”

Rewiring America assert that nationwide adoption of heat pumps, rooftop solar, home battery systems, and household electrification more broadly will create a new category of flexible grid resources that would not only meet 100 percent data center electricity demand but also improve energy affordability for tens of millions of households and reduce “reliance on expensive infrastructure expansion.”

Neither the analysis nor the grandiose proclamations made in the Homegrown Energy report series should be taken seriously. Rewiring America makes overoptimistic and unfounded assumptions to frame residential electrification as a preferable alternative to investment in the bulk power system. Their findings assume rates of heat pump, rooftop solar, and home battery installations that immediately jump orders of magnitude above the pace of deployment observed in recent years. Moreover, they never discuss how electrifying 68 million homes by 2030 would create significant new electricity demand of its own, overlook what the logistics and operational costs of such a program would look like, and how the country would meet load growth post-2030 having already exhausted all the ostensibly easily-mobilized energy capacity the residential sector has to offer.

Electrification and DERs can absolutely improve the existing power system and certainly deserve policy support. But maximalist studies like these deceive policymakers into believing that home upgrades should be the priority for grid expansion.

In addition to neglecting the need for new bulk supply assets like power plants, transmission and interconnection, and grid-scale storage, residential electrification maximalism poses immediate perverse consequences for homeowners themselves. The city of Berkeley, CA, for instance, is requiring sellers of single-residence homes to “replace fossil-fuel appliances or make other green upgrades as a condition of sale.” Sellers who defer this requirement must pay the buyers a $2,500 credit towards post-purchase retrofits, though the costs of installing a heat pump, for instance, can easily reach $20,000. The requirement amounts to an unfunded mandate on homebuyers in Berkeley, pushing up the cost of retrofits and with it the cost of housing.

Instead, the pathway through the nation’s electricity affordability crisis requires an approach that embraces both the large-scale electricity system and distributed innovations. In a political moment where the anxieties of everyday Americans are coalescing around worries that data centers will spike their electricity bills, policymakers have a golden window of opportunity to leverage hyperscalers’ power-sector investments to finance electrical projects that benefit them and society at large. By framing residential electrification as an alternative to investment in the bulk power system, Rewiring America’s reports present a zero-sum policy agenda that overrelies on distributed energy resources and may only worsen energy cost pressures for American consumers.

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Distributed Math That Doesn’t Add Up

The core problem with Rewiring America’s reports is their considerable overestimation of the grid capacity that home upgrades could create.

For heat pumps, Rewiring America’s logic is that the grid is sized to peak capacity, so lowering demand during those peaks means that utilities or hyperscalers don’t have to invest in new peakers to accommodate a large load. They model this by looking at the 10 most stressed hours of the year. During the other 8750 hours of the year, the assumption is that data centers would be powered by making greater use of existing generators. This isn’t outlandish; baseload gas turbine plants operate at 66% capacity on average. Presumably, they could operate during more hours of the year to serve new data centers. Likewise, upgrading inefficient electrical HVAC systems to heat pumps could, at face value, reduce peak demand and free up capacity to accommodate data centers.

Most other methodological choices don’t hold up so well under scrutiny. Rooftop solar estimates, for example, adopt the simplification that every rooftop in the country allows for an optimal south-facing system. This effectively guarantees high-end solar output estimates, by a considerable margin. In addition to eliminating those roofs with facings that diverge quite dramatically from due south, a solar deployment campaign would also have to exclude homes with older roofs or roof materials and homes where systems would not generate economically useful solar output. This home upgrades proposal also overstates the number of homes that would opt in by ignoring reductions in participation from variations in homeowner receptiveness.

Meanwhile, installation capacity may lag behind the targeted level of ambition. Rewiring America repeatedly suggests that home electrification, rooftop solar, and batteries offer faster solutions than centralized infrastructure, citing long lead times for gas turbines and interconnection queues and promoting home upgrades as solutions implementable “on the order of months rather than years.” Months may be a reasonable assumption for each individual instance of home electrification, but Rewiring America’s reports model heat pump installations for 68 million homes and solar-battery systems for nearly 80 million single-family homes by 2030. According to our analysis, this would entail, relative to current deployment rates, an 35-40x increase in residential solar installations and a 170-180x increase in home battery storage installations, to say nothing of the number of certified electricians and other professionals needed to facilitate this level of deployment.

Not only are Rewiring America’s rooftop solar estimates wildly optimistic, they also fail to account for geography when claiming that potential rooftop solar and storage capacity “can meet 100 percent of data center demand growth.” This flashy statistic, found on the first report’s front cover, is based on statistics summed across the entire country: 109 GW of potential solar plus storage capacity compared to 93 GW of expected data center demand. But much of their estimated capacity will simply be far away from new data centers. The figure below illustrates the potential spatial extent of supply-demand mismatches. Residential upgrades leave a huge quantity of data center demand in Virginia unmet, for instance, while rooftops in sunny California and Florida generate far more electricity than locally anticipated data centers require. The report’s headline claims imply diversion of these surpluses to regions in need of this capacity, requiring extensive investments in interregional transmission lines—the same model of large-scale infrastructure expansion Rewiring America purports to caution against.

A home upgrade campaign must also overcome unresolved technical and administrative hurdles facing DERs that will necessarily add implementation costs, extend the deployment timeline, and introduce risks that Rewiring America fails to discuss. Operationally, utilities would have to make substantial distribution network upgrades to usefully leverage residential solar generation, while also overcoming technological challenges around forecasting, coordination, and control. For fully-utilizable home solar and battery systems, utilities may even reasonably demand a grid integration charge to cover supporting system infrastructure. The difficulty of assessing upgrade potential, recruiting participants, and executing projects house-by-house will also add considerable transaction costs to the nominal sticker value of each project’s added capacity. The Rewiring America analyses largely avoid reckoning with these costs.

Beyond ignoring administrative and grid charges, Rewiring America’s second report makes methodological choices that hide trillions in peculiar household spending assumptions. The report, titled “A Policy Blueprint for Energy Affordability,” recommends electrification policies that it claims will deliver “$26,000 in average lifetime savings per home, or $1.5 trillion nationwide” after a 15-20 year payoff period. These are not savings from lower energy bills alone, but rather savings relative to a future where every home nationwide irrationally replaced its appliances with newer “like-for-like” versions. Thus, Rewiring America assumes every fossil-fired stove, water heater, and home heating unit in the country, by default, will be replaced with the latest fossil-fired model. They apply an average like-for-like upgrade cost of $15,000 per home, meaning that—across all 68 million non-electrified homes—homeowners would spend an unnecessary $1.02 trillion, rather than simply retaining their existing appliances. A more honest approach would not count this extraneous upfront capital expense in assessing nationwide lifetime savings from mass electrification, a calculation which ought to stand on its own merits.

Altogether, mass home electrification could offer some opportunities to free up grid capacity as hyperscalers drive load growth nationwide, but not likely anywhere near the extent to which Rewiring America claims and certainly without creating downward pressure on electricity bills.

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The Residential Sector: Promising But No Silver Bullet

Additional evidence that upgrading homes is insufficient to meet data center load growth actually comes from Rewiring America’s reports.

The Homegrown Energy “series” actually contains two different scenarios with assumptions optimized to support two different sets of goals. Part II argues that retrofits can be made affordable by modeling heat pump installation in the 68 million U.S. homes without them today, and by assuming a self-consumption battery dispatch strategy that minimizes the exports and imports of energy to the grid.

This contrasts starkly to Part I, which promotes household upgrades as an option to meet data center demand by lowering energy consumption during peak hours. Accordingly, it cherry-picks the subset of 21 million homes where heat pump installation would reduce peak demand and lower prices. These households already have electricity-based HVAC but use less energy-efficient technologies than heat pumps. Naturally, switching from an outdated electrical system to a better electrical system decreases energy consumption—much like swapping incandescent lightbulbs with LEDs. But restraining the scope of analysis excludes the other 47 million households for whom heat pumps would increase electricity consumption—those that currently use gas, oil, wood, or have no space heating and those with window or wall air conditioners or without air conditioning. Yet Part II, which does model heat pump installation for these homes, contains no mention of how such a program would raise peak electricity demand and necessitate new investments in centralized infrastructure.

Part I furthermore treats each state’s rooftop solar and storage as a perfectly coordinated network of grid assets and prioritizes residential exports that provide grid-wide peak shaving, as opposed to Part II’s approach that prioritizes benefits for homeowners over serving systemwide demand. The tension is that a battery cannot aggressively export during peak hours (as assumed in Part I) and also minimize said exports (the assumption in Part II). Residential solar with storage cannot simultaneously optimize for these two differing societal value propositions. In other words, home upgrades can either serve data center demand or lower the costs of home electrification, but they cannot do both.

Lastly, even if Rewiring America’s oversimplified projections for improved efficiency from home electrification somehow bear out, increasing load growth beyond the next half-decade will invariably require new electricity supply and transmission that the ratepayer will have to pay for. Rewiring America’s initiative would equip every household in the country with heat pumps, batteries, and rooftop solar by 2030. But after every gigawatt of reasonable capacity from the residential sector has been leveraged, home electrification can no longer serve as a resource to match virtually assured continued load growth post-2030. To do so will require additional centralized power plants and transmission—the majority built by utilities and paid for through electric bills, or by data centers themselves.

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Affordable Electrification Cannot Ignore Infrastructure

The proper balance of attention towards home upgrades and the grid at a system level is ultimately simple. Policymakers should cut through red tape to make home upgrades more accessible for Americans that want them while focusing on channeling utility and data center developer capital investments into the shared infrastructure that supports long-term electricity system resiliency and national economic growth. In short, home electrification and DERs should be pursued on their own merits without overstating broader grid benefits.

The dilemma confronting U.S. politicians for the foreseeable future is that no realistic course of action will substantially lower electricity rates—certainly not immediately. More electricity demand will require more construction, which will in turn require capitalization through shared charges. The costs of merely maintaining and replacing existing distribution infrastructure are already showing up in ratepayers’ bills. The conflict between the transition to clean energy, load growth, and energy affordability is thus an emergent feature of markets adjusting to new demand, not a bug.

With or without clean energy, modernizing the U.S. grid in a time of rising demand will be more costly for many years before those efforts start saving Americans money. Those expenditures represent an investment in a better future that may reduce energy bills in a decade, not tomorrow. Maintaining focus on the long-term arc of the energy system, more than anything, will help keep policy efforts more appropriately balanced between opportunities at the level of the single-family home and those at the level of the macrogrid.

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Smoke from wildfires in Canada and Minnesota left much of the east coast under hazy skies this past weekend—an increasingly familiar summer occurrence. In some parts of the D.C. metro area, air quality reached a hazardous 373 AQI. No U.S. forest policy could have prevented smoke from Canadian wildfires from reaching D.C. But the episode is a reminder of the broader wildfire crisis and of the need to ensure federal investments in reducing wildfire risk are actually yielding results here at home.

Climate conditions, decades of fire suppression, and a century of fuel accumulation leave us increasingly vulnerable to catastrophic wildfire. A perfect storm of political reorganization, staffing attrition, and regulatory gridlock is actively making it even harder for government agencies to respond. Without addressing these challenges, federal funding for wildfire mitigation will be slow to stop our forests from burning as often and as severely.

Congress is days away from breaking for August recess and faces a dwindling number of weeks for legislative activity before the end of the year. This past weekend’s conditions and the worsening wildfire season underway across the western United States serve as reminders that Congress cannot afford to delay action on legislation aimed at reducing wildfire risk.

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Wildfire mitigation under Trump 2.0

Historically, greater federal investment in hazardous fuel reduction (HFR) has translated into more acres treated. As Congress increased funding for mechanical thinning, prescribed fire, and other fuel reduction activities, treatment output rose accordingly.

The Infrastructure Investment and Jobs Act (IIJA) followed by the Inflation Reduction Act (IRA), provided a multiyear infusion of funding for hazardous fuel reduction beginning in FY2022. According to the last decade of HFR data for the Forest Service, both funding and reported treatment acres peaked in fiscal year 2023.

When President Trump returned to office, his administration inherited those investments and the opportunity to translate them into substantially higher risk mitigation outcomes. Yet, reported treatment has since moved in the opposite direction. IIJA funding is set to expire this year. After $514 million in HFR spending over its five year period, there has been little acceleration in treatment rates. The US Forest Service (USFS) treated 3.3 million acres in 2025, below 2024 levels and short of its own 3.6 million acre target.

Even prior to Trump 2.0, the current pace of treatment was vastly outmatched by the crisis. In recent years, USFS and DOI have averaged treatment of 5-7 million acres per year nationwide. For comparison, California alone requires treatment on roughly 3.9M acres per year to meaningfully reduce wildfire risk. In 2022, the Biden administration published a wildfire strategy with the goal of carrying out fuel treatments on an additional 50 million acres nationwide over a decade. USFS and DOI have identified a backlog of 117 million acres with high or very high wildfire risk potential.

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Why hasn’t more funding produced more treatment

Since the influx of unprecedented wildfire mitigation funding from the IIJA and IRA, treatment rates have not accelerated proportionally and measurable reductions in wildfire risk remain elusive. There are several reasons the recent funding surge has not yet translated into record treatment output.

First, as IRA and IIJA supplemental funding kicked in for HFR, Congress pulled back on the “regular” annual base appropriations for the same activities. Regular appropriations for these activities are primarily included in the annual funding bill for Interior, Environment, and Related Agencies. This apparent supplanting is, in part, due to a shift of some funding to a new budget line item consolidating salaries and expenses across all Forest Service programs starting in FY2021. The budgeting change makes year-to-year comparisons of HFR funding difficult, but two things are clear: the IRA and IIJA funding is less of a windfall because it offsets some of the drop in regular appropriations, and federal funding for HFR has, nevertheless, reached record highs.

Second, more treatment requires more planning. Large landscape treatments require years of planning before implementation, so some lag is expected. Workforce losses have affected USFS’ ability to maintain the current pace of HFR treatments, much less execute even more. Data from late last year showed HFR work by USFS was down 38% in 2025. If USFS is suffering a similar slow down in planned acres—which stakeholders and Members of Congress are concerned is the case—USFS will struggle to sustain higher treatment levels in future years.

There will undoubtedly be calls for more mitigation funding this year as IIJA funding expires and the next round of annual spending bills are negotiated. Adding to the looming funding cliff, the Wildfire Suppression Operations Reserve Fund is scheduled to expire after FY2027 unless Congress extends it, raising the risk that suppression costs will once again crowd out funding for HFR efforts.

Funding remains necessary but just throwing more money at the problem isn’t enough. Congress must also address slow multi-year NEPA reviews, resolve litigation induced delays, and ensure agencies prioritize wildfire mitigation among other agency priorities like wildfire suppression or timber production.

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What Fix Our Forests can and can’t fix

Congress should dedicate sustained funding for HFR, but also focus on removing barriers to implementation. The Fix Our Forests Act (FOFA), which passed the House and advanced out of Committee in the Senate last year, takes aim at regulatory streamlining and reducing litigation risks. Forest management projects, which include HFR efforts, attract more litigation than any other federal projects. The bipartisan bill expands several authorities intended to accelerate hazardous fuel treatments on more acres, including expanded categorical exclusions under NEPA to encompass larger sized projects, shorter timelines for legal challenges, and improved interagency coordination mechanisms.

Trump 2.0 has made it clear that their deregulatory agenda goes hand in hand with historic federal workforce reductions. This is important because while streamlining environmental reviews or improving interagency coordination might result in some improved efficiencies, regulatory reform doesn’t automatically put chainsaws in the woods. USDA’s sweeping reorganization and mounting workforce reductions threaten to further exacerbate preexisting staff capacity constraints at USFS.

When asked in congressional hearings why treatment targets had fallen despite available funding, Forest Service Chief Tom Schultz did not provide a clear explanation for the decline beyond citing vague “operational challenges.” Meanwhile, Interior Secretary Doug Burgum and other agency officials have emphasized full suppression. It would be a mistake to return the failed policies of the last century that prioritized full suppression at the expense of proactive fuel management.

Some environmental organizations and sympathetic lawmakers have cited the lack of direct funding in FOFA and a general distrust of the current administration’s land management priorities and implementation abilities as reasons to withhold their support from the legislation.

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Congress’ next move

Despite warranted skepticism, Congress should pass FOFA this year. Giving diminished, understaffed regional offices the statutory tools to cut through red tape is the best opportunity they have to maximize remaining resources, and lay the groundwork for future administrations to make better use of appropriated mitigation funding.

Congress has already demonstrated that it is willing to invest billions in reducing wildfire risk. The next question is whether federal agencies can convert those dollars into completed fuel treatments on the ground. Until Congress pairs sustained funding with regulatory reform, implementation capacity, and accountability for acres treated, appropriations alone will continue to produce disappointing results.

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I’m very excited to share with you the product of many months of research and writing. It’s a report called Rewiring Risk: How to Bring Down Electricity Bills and Increase Wildfire Resilience in California, and it offers a framework for understanding and addressing the state’s intertwined wildfire, home insurance and electricity unaffordability crises.

For the launch of this report, we decided to try something a little different: a podcast! Above you can find a conversation between me and my colleague Eric Biber, a professor of environmental law at UC Berkeley who was an incredibly helpful reviewer of my report. I hope you take the time to listen, but if you just want the highlights, you can find a heavily abridged transcript of our conversation below.

Thanks, Lauren.

Read the Report HERE

Inverse Condemnation with Strict Liability: A Boring-Sounding Doctrine that Is Actually Really Important

Lauren

So maybe we can just start with what exactly this is. “Inverse condemnation with strict liability,” It’s a bit of a mouthful. People’s eyes glaze over as soon as you utter it.

Eric

Inverse condemnation is the flip side of what’s called eminent domain. Eminent domain is the power of the government to take someone’s property, with or without their consent, as long as compensation is paid for it. Say the government wants to build a highway. You can sell to the government if you want, but if you choose not to sell, the government can go to court, force the title of the property that’s covered by the route of the highway and have that transferred to the government in return for a court adjudicated amount of money that is supposed to be just compensation—which is the federal constitutional term for this and it’s the standard practice in most states.

Inverse condemnation is the opposite of eminent domain. The government does something to your property, and they don’t go through the eminent domain process, and the property owner alleges that the government action was effectively taking title, or affecting the property in a way that required compensation, and so I’m going to court to force the government to pay that compensation.

The concept of strict liability is a concept out of what’s called tort law. Tort law is basically the law of accidents or intentional actions—where someone does something that hurts someone else, either in their body, in their property rights, in their reputation, range of possible ways, and you know, if you purposely do something to hurt someone, that’s pretty obvious. But most of the time, this is unintentional, right? You run into someone’s car with your car, and we adjudicate who owes what for that accident through a concept usually called negligence. So that’s the standard for much tort liability in the U.S.

Strict liability is a different standard. It basically says if you’re doing a certain kind of action and you harm someone else, you’re liable. Doesn’t matter if you took reasonable precautions. Doesn’t matter if you were negligent or not. You are liable. So to put it back together, what we have here is inverse condemnation with strict liability – if you do something that harms someone else, we will hold you strictly liable for it because it is a form of eminent domain for which compensation is required.

So that raises the question: Why is this applying to electric utilities? These are not highways. These are not public entities. These are private companies. Well, as it turns out, California, like basically all other states, applies this concept of eminent domain and publicness to activities besides constructing public roads. It has long historically applied for railroads and electric transmission and gas pipelines and other pipelines. Even if it’s operated by a private company, those entities have eminent domain power, and the theory here is that they’re providing a public utility, a public use. The whole point is that anyone should be able to access electricity if you can pay the fee. They have an obligation to hook you up and connect you to the system. They can’t discriminate against you.

Okay, so now you can see that the electricity system could be seen as something that’s for public use, and that the utility company would be seen, even if it’s a private company, as a public utility. And that’s basically how the California courts put it together. It’s like, okay, these are public utilities doing a public use; if they damage private property in the course of their operations, compensation is owed.

Why strict liability? So this concept is not unique to California, as you note in your report. A bunch of other states have this possibility of an electric utility being liable for damage to private property. California is basically an outlier here because of the strict liability standard. In other states, it tends to be a negligence standard.

Lauren

So why does California apply strict liability where all the other states only apply a fault-based or negligence-based standard?

Eric

Basically, the California Supreme Court concluded this is what the standard should be. There’s, I think, a theory that the public is benefiting from this infrastructure, so the public, in the form of the public entity that causes the damage, right, should compensate the members of the public who are harmed as a result of that infrastructure, right? So it’s sort of a risk spreading concept. If you are harmed by this public infrastructure, the public should be supporting it. Balanced against, are you making it too expensive for us to construct or operate this infrastructure? It’s not clear to me that the California courts would come to the same result, knowing what they know now about the implications of this doctrine.

Lauren

You just alluded to the consequences of strict liability, and I guess I should be clear about what I think those are and what I think probably you agree those are, which is: one, it’s been disastrous for electricity affordability because it incentivizes electricity utilities to mitigate to the point of diminishing marginal returns, often with extremely expensive capital expenditures.

But strict liability for utilities has been around for 25 years. So, why did these affordability effects become pronounced only quite recently? Well, it turns out the collision of growing wildfire risk with this doctrine produces it, which leads us to the question of why wildfire risk has apparently grown in California over the past 10 years. Most wildfire people who study it have an agreed upon story of what these factors are. The first is fuels management, and Eric, maybe you can talk a little bit about this because you go into quite a bit of detail about it in your Fixing Wildfire Law article. What is the history of fuels management specifically in California, and how has it led to the situation we have now?

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How Forestry Practices Provided Fuel for the Fire

Eric

Basically, starting in the 1920s, there’s a huge push for fire suppression. The Forest Service starts a policy of putting fires out on its lands by 10 a.m. of the next day as a basic policy. Fire was seen as a risk to property. Part of this was a response to a very large series of fires in the 1910s that caused tremendous damage throughout the Western U.S. But it was also seen as damaging a resource that should be used by people. Like we don’t want trees to burn; we want to use them for timber, for instance.

And the problem, of course, is that many, though not all, the ecosystems in Western forests historically burned. Whether it’s from Native American burning or natural sources. A chunk of it’s natural lightning. These are species, for instance, that require fire to reproduce. Pine trees whose cones need fire to burst open and sprout, but also that if you don’t burn, if you’re in a dry western pine forest, the fuels just accumulate. It’s not wet year round, like in much of the eastern U.S. such that you can get the fuel to decompose. It’s going to burn, and so the forests will burn one way or another, and of course, if you decide to put out the fires for 50 years, the result is the fuels accumulate.

And exacerbating that was a range of practices of industrial logging that tended to emphasize treating forests like plantations, creating large single age stands of forests that also can be vulnerable to fire in sort of the way they structure and are managed. So you put those two together. Those happen for several decades, and eventually, the result is at some point things are going to give, and then that gets exacerbated by climate change. Things are warmer. Things are drier. Those are things that make fires go bigger. They can also interact, for instance, making wind events like we have in California particularly stronger and more dangerous.

So again, one of the challenges is that fire is particularly a risk in particular weather events that will occur, but are hard to predict in the aggregate. And so, most of the worst fire events get started during these extreme wind events. So you put that together, as you say, you have a doctrine sitting around that allows for recovery, and then you get a dramatic explosion and fire, and in particular, expansion in the intensity and size of the fires and the damage they do.

You know I reference the big burn in the 1910s in northwestern U.S. that burned out whole towns, but it’s different today in part because there’s more people, property is a lot more valuable. There’s a lot more development and a lot more development in places that might burn, and so you get events like the Camp Fire that burns out Paradise. You get fires in the Napa and Sonoma counties and wine country in Northern California that burn in urban areas, and one of the things we’re starting to see now, and again—this has happened historically—you’re getting fires entering in or starting on the edge of urban areas that turn into structure-to-structure fires.

This is what happened in the Palisades in LA, Altadena in LA as well, and it turns out there’s actually a lot more fuel in a house than in a tree. So if you overwhelm urban fire suppression, it can become extremely difficult to restore control in a high wind event. So you put all that together, and you get the possibility of much higher losses economically and at levels that are just not sustainable by even very large corporations like California public utilities, which are companies with tens of billions of dollars of assets, but you know they’re not going to sell off the transmission system to pay the judgment. They have to have cash, and they don’t.

How We Subsidize the Expansion of the Wildland-Urban Interface with Fire Policy

Lauren

This brings us to the other element of growing wildfire risk, which is growing exposure. The fact is, more people are living in dangerous proximity to wildfire than ever before. I think we probably have a pretty similar account of why this is. What’s your understanding of why we have this growth in the WUI, the so-called WUI, the wildland urban interface?

Eric

Wildland urban interface, one of the worst acronyms ever invented.

So why? Well, some of it is just a story of urban sprawl, cars, lots more income. People want to live in beautiful places, right? So that’s a chunk of it. There have always been rural communities in these places, but a lot of the population boom is driven, you know, by tourism, by people wanting second homes, by people wanting to travel and visit these places or retire to these places because they’re beautiful, wonderful places to live, and I don’t think that that demand is not going to be there.

Another component of it is that land use regulation, which has its pros and cons, tends to be stricter in urban areas than it tends to be in some, but not all of these exurban or rural areas. That varies a lot by place, but I think it’s fair to generalize that rural areas in the Western U.S. tend to have less strict land use regulation, which makes it easier to build things again for better or for worse. And so the result is you can get a lot of development scattered over the landscape, which makes it harder to protect. Isolated houses are harder to protect than contiguous core areas from fire coming in. Makes it harder to have fire on the landscape. One of the prime ways you deal with fuel loads is to try and restore fire, low intensity or even medium, higher intensity fire, depending on the ecosystem, to reduce the fuel loads. It’s hard to do that if you have people living out there.

So that’s another chunk of it, and another chunk of it is that we effectively, in our fire policy, at least subsidize development in these spaces, right? So we provide public fire suppression and fire protection, and that disproportionately benefits the people who are more at risk, right? Which is going to be people living in the WUI as a general rule. And related to that, the insurance system can provide that cross subsidization as well, depending on how policies and rates are structured.

And California is particularly susceptible to this because it has, for a long time, strictly regulated the rates that can be charged for homeowners’ policies to protect against losses like from fire, and that restriction on rates mutes the ability of using insurance to send economic signals about where higher risk exists, right? And so that’s another form of cross subsidization. Just because you have cross subsidization doesn’t make it bad, right? We may think that you know, rural communities are poor. They need support, things like that. But talking about a bunch of second homes in Tahoe, or you know, down in the Sierra Nevada, or somewhere like maybe you’re less sympathetic to cross subsidization. But those are the basic concepts.

Development in the WUI’s exploded. It’s going to continue to explode. There’s demand there. We don’t have a regulatory system that consistently constrains it. And from an insurance and public policy perspective, there are components that significantly subsidize it. I could back out and sort of say, if we were thinking about rural development more broadly, there are other ways in which rural areas are more expensive to live and harder to live in. So I don’t want to say that this is all determinative, but within the scope of what we’re talking about for fire, there’s definitely a cross subsidization component.

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Prop 103: The Root of All Evil?

Lauren

Yes, this is the great bugbear of my paper. The mechanism by which rates are tightly regulated is the dreaded Proposition 103, which I mention a lot in my paper, and I doubt we will ever see rolled back in our lifetime. Which essentially, yeah, Eric’s shaking his head. Proposition 103 was originally a response to, I guess people thought auto insurance was too high, and like many things in California, it was put to ballot initiative. People were saying, “Do you think the prices are too high? Then vote for this ballot initiative.” And people said, “That sounds good to me.” And it turned out what that did is it subjected rate increases to the whims of an elected official, the insurance commissioner, who being elected has political reasons to not approve rate increases that are high enough, and by high enough I mean to let the insurance market clear and send actuarial signals about where it is safe to live. To me this is the root of all evil. I don’t know if you feel the same way exactly, but this is the original sin to me.

Eric

Yeah, yeah. I mean, I think the framing you give is, I think, a key, an important part of it. I think the best responses, if I was to sort of play the devil’s advocate on the other side, is, you know, without the elected accountability, the insurance companies would dominate as the larger repeat players relative to consumers, and you would get crappy products with poor claim service that would just take money from people and not actually give them good services, right? And there is, you know, I think a reasonable argument for consumer protection in the insurance context because of the possibility that you could pay in and not get out, because insurers could use policy provisions and claims services to effectively deny what you thought you were paying for.

That being said, there is a large range between good consumer protection and rate freezes, right? And so I think it is fair to say that I would agree with the position you’re putting out there, which is that the current system is not allowing insurers to recoup the funds they believe they need to be economically viable to provide protections in high risk parts of the state.

And part of that is that they can’t differentiate based on that risk to the level they think they should be able to, and also differentiate between policyholders who take various steps to reduce risk. Right, so you can harden your home or clear what’s called defensible space, removing vegetation around your house to reduce those risks, and part of it is also just the inability to increase rates in response to new information, and so that can effectively turn into, as you note, a cross subsidization in which low risk parts of the state pay for high risk.

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Some Cross Subsidies Are Better Than Others

Eric

Now I’m going to step back. Like, insurance is sort of by definition cross subsidization in that way, right? It’s risk spreading. I think the problem comes in when it gets to an extreme level where it raises questions about what policy goals we’re trying to achieve. And so, again, this I think is a hard problem to solve, in part because some of that cross subsidization you could make plausible equity claims for, right? Poor rural communities. Think of communities like in Northern California that were historically logging dependent, natural resource extraction dependent. Those industries have declined substantially. They’re relatively low income, looking for some kind of economic boost, and setting insurance at much higher rates would be just yet another economic burden to what are already very burdened communities.

But like I said, it’s hard to have much sympathy for someone buying their second home in a resort area in California. So separating out who we’re supporting and what the equity claims here are is tricky and may not always be feasible. But I agree with you, the current system is not functional, and it does effectively produce substantial cross subsidization that, at least in part, is benefiting people that we probably don’t think have good equity claims, and is also in part facilitating further development in areas that are higher risk for fire, which exacerbates the problem to begin with.

Lauren

We should get into what exactly the cross subsidies are that I complain about in my report. So there’s quite a few of them. The first is the one relevant to the utilities, and this is a somewhat complicated one. There’s kind of two ways in which the utilities cross subsidize people in high risk areas. The first is, of course, by taking excessive grid mitigation measures to avoid setting a fire in a high risk area.

The second is this really interesting—and maybe you can explain more about this—it’s an interesting kind of mechanism called insurer subrogation, by which the insurer can sue the utility to recover the claims that had to pay out to the person whose house burned down. Why can they do that?

Eric

Subrogation is the idea that you can step in the shoes of someone else to assert their claims because you compensated for them. So, if you actually ever read your policy, you’ll see this comes up, right? Like if the insurer comes out and pays a claim for you, they’re going to reserve the right that you had a claim against someone else for the harm that they compensated you for, they will assert that claim to get their money back. As an example, I once turned my ankle playing basketball in a gym, and the health insurance company called me up a little later and said, “Hey, do you think there was something fishy about the gym that led you to turn your ankle? It’s like, “No, no, I just misplaced my foot on the basketball court.” But they were looking to see, “Did I have a claim?” Right, a negligence claim against the owner of the court, such that they could recoup the money they had paid on my behalf for my medical care, right?

Lauren

And that would be awesome for them, right?

Eric

Yeah, well, I mean, insurers budget based on this, right? They’re going to take into account that they are going to assert claims for a certain proportion of our asserted legal claims and the certain proportion of claims, insurance claims, made by our policyholders, and use that to recover some of the funds we pay out. And you know, if you take that into account, then you’ll take into account what capital reserves do we need to pay claims, what rates do we need to charge to pay claims, and so on and so forth.

So, as you know in the report, what has essentially happened for the insurance industry in California is they have made up for the lower rates they can charge, which may not be sufficient to support the claims they believe they will need to pay out because of wildfire risk. They have made that up by asserting claims against utilities under strict liability, so essentially, what has happened is strict liability for utilities for fire risk in California has been a way to help prop up the insurance industry in California, and as you know, that that does produce another form of cross subsidization because the rate payers are not just paying for the capital expenditures to reduce.

But all the utilities self-insure or contribute to the state pool funding, and what happens is that ratepayers in general are paying for the claims payouts by the utilities to these insurance companies, and again, that’s going to go from low risk to high risk as a general rule, right? Because there’s going to be more claims in high risk than low risk areas, and so that is a key part of supporting the insurance industry in California. The insurance companies make arguments that you do that [get rid of strict liability], we’re out of here.

Lauren

So this is to me one of the worst cross subsidies. Because it essentially subsidizes people to live in dangerous places indefinitely, and it delays an insurance crisis that is going to need to happen. Well, it’s already happening essentially. This is what’s happening right now. You know, State Farm pulled out of the state a couple years ago [editor’s note: State Farm didn’t actually pull out but they stopped writing new policies and non-renewed a bunch].

Eric

I think I see it as the same as the others, right? It’s still low risk to high risk. I think maybe it’s the capriciousness of it is what you’re maybe referring to. It’s just like who suffers losses that their insurance companies claim that then have the happenstance of being connected to utilities that result in payments, as opposed to a more systematic way of understanding, you know, who was harmed? Who took reasonable risks in where they lived, and reasonable precautions in hardening their homes or managing fuels on their property, and paid reasonable, or paying into rates that were reasonable to cover an insurance pool, for instance, and it’s also going to be totally capricious in terms of who who’s compensated. You could have a very expensive second home versus, you know, the only place you live. It’s all your assets in a rural town, and either one, it’s treated the same.

Lauren

Yes, the capriciousness is part of why I don’t like it. I would say the other reason is that as opposed to a cross subsidy, like say general fire protection and suppression, it is funded regressively. So when something is funded through the rates, everyone famously pays the same rate for electricity. That is going to affect lower income consumers more than higher income consumers, especially because in California, low income people are more likely to live in our very hot Central Valley and require more air conditioning. So I think it’s a very bad way to do it. It obviously creates a ton of moral hazard, and I think that if you’re going to create a ton of moral hazard, at least have it funded progressively through the tax base.

Eric

The capex, to be clear, would also be regressively funded. That is, at least arguably, that’s providing a public good in the sense that you’re reducing fire risk that will benefit the broader landscape and society.

Lauren

Yes. So yeah, the capex benefits people in high risk areas more than low risk areas, but at least it benefits the people in low risk areas some.

Eric

Sure.

Lauren

Whereas subsidizing people’s insurance really only benefits them and makes the wildfire exposure worse in the long run, in my opinion.

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The Radioactive Politics of Home Insurance and Electric Utilities

Lauren

There’s also the famous cross subsidy of the FAIR plan that’s slightly outside of the scope of my paper. But we should talk about it.

Eric

It actually is essential because the FAIR plan is the backup insurance plan if you can’t get homeowners insurance in California, and let us emphasize: like, if you do not have homeowners insurance, the average person is screwed because you can not have a mortgage without homeowners insurance. Set aside that your most important asset is at risk of going poof with no compensation. No one’s going to write you a mortgage without homeowners insurance for obvious reasons. The bank wants to be able to get its security back if something happens, and so the FAIR plan is a state mandated insurance program that’s the insurer of last resort. It is not unique to California. Florida, Texas, many states have similar systems. All of them are prone to similar risks. They get all bad risks, so it’s a terrible risk pool, which means it is extremely susceptible to losses. Historically, these have also not been good at setting rates commensurate with their risk, in part because they’re often publicly run or publicly supervised, and in part because you can tell equity stories about why you’re not going to dump giant rates on poor people who need to get insurance to protect their limited assets.

The result is that you need a backfill somewhere, and so this happened in the FAIR Plan, which got hit with a bunch of claims out of the LA fires. I believe it was a billion dollar backfill that all the other insurers in the state had to give the FAIR plan, and half of that comes from the admitted insurers putting an assessment on their ratepayers. So all the policyholders in the state are cross subsidizing those people who are on the FAIR plan as well. And again, that is going to be low risk to high risk, and again, within the high risk pool, there’s going to be a range of people we may feel more or less sympathetic to in terms of whether we want to be supporting them.

You can see these dynamics happen in other states. It is extremely politically popular to ensure people have access to homeowners insurance, and insurance companies, like utilities, are hard to make politically popular. Let’s put it that way.

Lauren

So people hate insurance, and this is kind of your, I would say, reasonable critique of my report, is that people hate insurance, people hate utilities. It’s politically popular to rail against them.

Right, and you see that dynamic, like you see this down in L.A. after the fires, right? Like it’s not a left-right thing. It’s a range of people who are really pissed at their insurance company for not paying out the way they think they should be paid, and wanting to get back at them about that. And again, like there are times when insurance companies don’t do what they should do. It’s a difficult contractual problem to solve, right? And so that’s why you have the public intervention. But the result can be, as you say, that the insurance companies can’t charge what they need to make the risk pooling work.

So is it politically feasible [Lauren’s idea to reinstate actuarial pricing]? I don’t know. I mean, it’s also going to be infeasible if no one wants to write policies. And one interesting dynamic you have seen is there have been efforts at reform or change by the current Insurance Commissioner [Ricardo Lara, who implemented the Sustainable Insurance Strategy in late 2024, which seeks to take pressure off the FAIR plan by allowing insurers to charge higher rates]. One can debate the merits of them as well as the underlying politics of how much he’s helping insurance companies versus rate policyholders. But there have been changes that have happened, and there’s been, I think, surprising levels of political support for those changes, from what I’ve observed. Partly because of the shock waves of non-renewals and people getting non-renewals across the state does change the political tenor some.

Utilities are harder in part because there’s definitely examples of bad behavior by some of the utilities along these lines in the past, including deferred maintenance. So those memories are present in a way that I think makes it hard for people to have sympathy for what you’re talking about, but again, you know the question is when, if utility bills go up enough, does that change the political dynamic enough? And one other thing– you flag the progressivity or regressivity of those rate increases, which I think is really important. It also interacts with the state’s climate goals because a lot of those are focused around electrification. Transportation, heating, home heating, and things like that. And if electric rates are high enough, those become much less feasible for people to do, and also increase the regressivity of the increased electricity rates even more because transportation and heating are pretty fundamental activities for people, and so that is an additional reason. And I think those dynamics are one reason why . I think you would potentially see traction in the state legislature to make changes. I’m more skeptical you get changes through the ballot process because I think with the politics around utilities and insurance companies, it’s just really hard to get the broader public on board. Well, let’s make those entities better, let’s help them – it’s not an easy pitch to make, right?

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2026 may well be remembered as the year global agriculture began to untangle itself from decades of precautionary red tape. Earlier this year, the agricultural biotechnology landscape shifted in two places that have long defined opposite poles of the regulatory debate: the European Union, historically the home of exceedingly precautionary biotech rules, and the United States, a pro-innovation leader now eyeing a massive regulatory overhaul.

The EU Parliament recently approved a landmark framework for regulating New Genomic Techniques (NGTs). Many plants developed with CRISPR or other precise gene-editing techniques will now be treated more like conventional crops by regulators than transgenics, commonly referred to as “GMOs.” Meanwhile, the US Department of Agriculture is weighing a clean break from its legacy Part 340 biotechnology rules, in place since the late 1980s.

Together, these moves mark a broader retreat from process-based regulation toward more risk-based and technology-agnostic frameworks. Product-based regulations ask what a product does, what risks it plausibly poses, and whether regulation will actually improve safety—rather than focusing on the technology used in development. This is about more than administrative streamlining; it’s the key to a new wave of agricultural innovation.

While the EU’s NGT reforms and the US’s potential overhaul are steps in the right direction, true modernization demands that all genetically engineered products—gene-edited and transgenic alike—be treated the same as conventionally bred crops. Continuing to differentiate between these categories as a proxy for risk conflicts with the scientific consensus that gene-edited and transgenic crops don’t pose new risks compared to conventional breeding, often making changes to a plant’s DNA with greater speed and accuracy and fewer unintended changes. Only by aligning regulations with established science will we unlock the benefits of biotechnology innovation in agriculture.

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Climate policy often clashes with the needs of poor households. Nowhere is this clearer than in the debate over clean cooking. For nearly three billion people, daily cooking still depends on wood, charcoal, dung, crop residues, coal, or other solid fuels. The smoke from those fuels is not an abstract environmental problem. It is a direct health risk, especially for women and children who spend the most time near household fires. Liquified petroleum gas (LPG) is a solution: compared with wood, charcoal, dung, and coal burned indoors, it produces far less household air pollution and can sharply reduce exposure to fine particulates and soot. For families facing daily smoke exposure, the health gains can be large and immediate. But LPG is not a zero-carbon fuel, thereby making it a target for climate activists.

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Kirk Smith vs Paul Ehrlich

While almost everyone has heard of Paul Ehrlich and his sensational (and wrong) views on overpopulation, few people are aware of the late Kirk R. Smith, a professor of global environmental health at the University of California, Berkeley. Smith helped establish the modern science of household air pollution. He was a major contributor to international climate science, including the Intergovernmental Panel on Climate Change. Yet he refused to treat climate policy and human health as competing goals. Smith never lost his focus on practical solutions for people living with severe health risks in poor countries.

Beginning in the early 1980s, Smith studied the consequences of cooking with solid fuels in poorly ventilated homes. He and his colleagues documented the links between household smoke and serious illness, including childhood pneumonia, chronic lung disease, and cardiovascular disease. His work on clean cooking in India helped transform household air pollution from a largely overlooked problem into a major public-health and development priority. Smith worked with Indian researchers to measure women’s exposure to smoke from traditional cooking fuels such as wood, dung, charcoal, and crop residues. That fieldwork helped establish the scientific basis for understanding household air pollution as a serious cause of respiratory and cardiovascular disease, especially among women and young children.

Smith’s central contribution was to show that the health problem was not merely “indoor smoke,” but dirty combustion that affected entire households. In India, where hundreds of millions of households relied on solid fuels for daily cooking, this meant that exposure was both widespread and lifelong. His research emphasized that improved biomass stoves could reduce some pollution, but often did not reduce exposure enough to meet health-protective standards. Smith argued that genuinely clean fuels—especially LPG—were essential for rapid health gains.

Smith was an influential advocate for expanding access to LPG for poor households. He viewed LPG as a practical, immediately available fuel that could sharply reduce household air pollution, lessen the burden of fuelwood collection, and improve the daily lives of women and children. His collaboration with Indian scientists and policymakers helped support one of the world’s largest clean-cooking efforts, which provided LPG access to roughly 80 million households.

Smith’s approach was pragmatic. He argued that clean-cooking policy should be judged by actual exposure reductions, health outcomes, affordability, and sustained use—not simply by whether a fuel was classified as renewable. Subsequent research in rural India has reinforced the importance of sustained LPG use, noting that a connection to a gas line is not enough if households continue to “stack” fuels by using wood, dung, or crop residues alongside LPG.

Smith’s legacy in India is that he linked environmental science with practical public health interventions. By documenting the risks of solid-fuel cooking and making the case for clean fuels at scale, Smith helped shift clean cooking from a niche stove-design issue to a central question of health, gender equity, air quality, and development. Smith and his collaborators showed that household air pollution was among the world’s largest environmental health risks, contributing to millions of premature deaths each year. The burden fell disproportionately on poor women and children. For households that rely on solid fuels, LPG is the most immediately available clean-cooking substitute.

That conclusion sometimes sits uneasily with climate activists in the West who treat any expansion of fossil-fuel use as inherently suspect. But Smith warned that “improved” biomass stoves do not meet health-protective air-quality standards in real-world use. A stove that is marginally better than an open fire may still leave households exposed to dangerous levels of pollution.

The World Health Organization makes the same point: for households relying on solid fuels, LPG is among the cleanest alternatives that is widely available at scale. This does not mean LPG should be treated as a permanent end point for energy policy. It means that, in places where electricity, biogas, ethanol, or other genuinely clean options are not yet affordable and reliable, LPG can be an important bridge to better health and lower household pollution.

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Health, forests, and policy realism

There is one important additional benefit to clean cooking. In many poor communities, the use of wood and charcoal puts pressure on forests and local ecosystems. The contrast between Haiti and the Dominican Republic illustrates the point. The two countries share the island of Hispaniola and have similar environmental conditions, but they have followed very different cooking-fuel paths. The Dominican Republic shifted much more of its household cooking away from wood and charcoal and toward LPG or electricity, while Haiti has remained heavily dependent on charcoal. Forest outcomes have diverged sharply. Clean cooking is relevant not only for health, but also for land use and forest conservation.

Smith was concerned that restricting LPG access in poor countries in the name of climate change could push hundreds of millions of people back toward biomass or coal for cooking. His argument was not that climate change is unimportant. It was that climate policy should not ignore near-term health damage or impose unrealistic solutions on households that lack affordable alternatives. In his view, opposing LPG in the name of climate policy could be ethically questionable if it blocked one of the few proven, scalable ways to reduce the world’s largest household environmental health burden.

Smith’s views represented a nuanced perspective on fossil-fuel use. Subsidizing gasoline for wealthy consumers is not the same as helping a poor rural household replace a smoky biomass stove with LPG. The climate implications, equity implications, and health implications are different. A targeted LPG subsidy for poor households must be evaluated as a public-health intervention, not as a generic fossil-fuel subsidy.

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Policy lessons

Clean-cooking programs have helped tens of millions of poor households gain access to LPG, reducing reliance on solid fuels and improving the prospects for women’s and children’s health. Implementation challenges remain: connection to LPG does not always mean sustained use, especially if refills are unaffordable or distribution is unreliable. But the experience demonstrates that large-scale clean-cooking transitions are possible when public policy, distribution systems, and household affordability are aligned.

Poor households need safe, reliable, and affordable energy now. Where grids are reliable and power is affordable, cooking can be done with electric cookstoves. But until those options are broadly available, rejecting LPG can leave families dependent on fuels that are more dangerous for health and often worse for local forests.

A more constructive climate and development policy must place human welfare at its center. It should support LPG cooking fuels today, invest in electric and renewable alternatives, and judge interventions by measured outcomes rather than slogans. Kirk Smith’s work is valuable because it points toward that kind of practical environmentalism: one that takes climate change seriously while also taking seriously the lives of people exposed to dangerous smoke every day.

The same principle applies more broadly. Energy policy should not be reduced to a choice between climate and development goals. Healthier and more prosperous societies are generally better able to invest in environmental protection, forest restoration, and cleaner energy systems. Climate policy should support energy transitions within poor households, to improve health outcomes and alleviate the burden of poverty.

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It’s easy to forget today, as more and more people have come to take the idea of solar geoengineering seriously, that the idea first really broke through into elite public consciousness as something of a troll. The notion had been discussed in a few arcane corners of the academy over previous decades. My uncle, William Nordhaus, even briefly mentioned it in his seminal 1975 paper on climate change. But the 2009 publication of SuperFreakonomics, by Steven Levitt and Steven Dubner, was the first time that discussion of the topic, to my knowledge, broke through to the mainstream. Levitt and Dubner argued that it would be far cheaper to simply hack the atmosphere with sulfur particles than to reorganize the global economy around non-fossil technology.

The book provoked a furious reaction, almost entirely to the single chapter devoted to the topic. All of the now familiar objections were present. Geoengineering created moral hazard and might become a gigantic perverse incentive for the world to continue to burn fossil fuels. It could create new armed and perhaps even nuclear conflicts, as the resulting changes in weather patterns might shift rainfall or ocean currents in ways that advantaged some nations and disadvantaged others. Geoengineering might solve one aspect of the problem, a warming atmosphere, but wouldn’t do anything about another, ocean acidification. The untimely cessation of geoengineering, before atmospheric concentrations of CO2 had been significantly reduced, would result in termination shock, causing temperatures to rise rapidly and catastrophically.

The troll ended up playing a central role in both turning geoengineering into the climate culture war object that it is today and galvanizing efforts to transform it from a thought experiment to a real technology. Within a few years, multiple international frameworks for governing geoengineering had been proposed. Research funding began to flow into the sector. Today, multiple startups around the world purport to be developing the technology. Several new NGOs have launched to advocate for geoengineering research. The billionaire tech class has taken notice, which has led, predictably, to some quarters of the environmental movement taking notice. The Environmental Defense Fund has launched a deep pocketed research program. Even NRDC says it supports geoengineering research.

Over the years, I too have been supportive of geoengineering research. Back in 2018, I argued in Foreign Affairs that the two degree delusion created its own sort of moral hazard, lending credence to the idea that adaptation to higher temperatures and geoengineering research were not necessary. In my 2021 review of Elizabeth Kolbert’s Under a White Sky, I suggested that future human societies might engineer the climate not to save our own skins but to preserve biodiversity. And in 2024, I somewhat cheekily proposed that we use a somewhat less controversial form of geoengineering, marine cloud brightening, not to mitigate climate change but to moderate natural climate variability driven by the ENSO cycle.

Geoengineering was interesting to me discursively because it usefully separated concern about the consequences of climate change from all of the priors that had been mapped onto the issue from its emergence as a public concern in the late 80s and early 90s. The notion of modifying the atmosphere intentionally seemingly had the potential to disrupt the polarized battle lines that had hardened around the climate issue, making it less of a proxy for the environmental movement’s long-standing regulatory and soft energy obsessions.

But as discussions about geoengineering have moved from the fanciful to the practical, I have increasingly come to see it not as the antidote to climate catastrophism and green millenarianism in the public discourse but rather as the most likely, and perhaps only, plausible pathway to actual catastrophic climate change. My evolution on this question has less to do with the technology itself—the risk of termination shock has always been part of the conversation. Rather, it is my evolving view on climate risk and the continuing disconnect between the actual consequences of climate change on human societies, which have thus far been marginal, and the climate discourse, which insists that the consequences have already arrived and are already catastrophic, that has led me to reconsider the wisdom of even geoengineering research.

Geoengineering has been promoted as a “break in case of emergency” technology in the event that climate change gets really bad. But this framing of geoengineering presumes that there is a clear and observable threshold of badness where it is clear that emergency action is required. It should already be obvious that no such threshold exists.

Much of the climate movement insists that the emergency has already arrived, reliably conflating natural climate variability with climate change, which in turn is blamed for climate related disasters that are predominantly driven by maladaptation, poverty, and failing institutions, not anthropogenically intensified climate hazards. Many geoengineering advocates, meanwhile, have themselves become increasingly catastrophic about climate change, at least in part to justify use of the technology.

As a result, the troll has ended up reifying the catastrophism it was intended to combat. In a “post-truth” world in which states of emergency are easily manufactured, geoengineering strikes me as far more likely to be deployed in response to a fake emergency than a real one.

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The Fake Emergency

Despite a degree and a half of warming over the last two centuries, human populations have done nothing over that period other than become more resilient to climatic extremes. Climate related mortality has fallen dramatically. Economic costs have fallen as a share of GDP and remain flat as a share of wealth exposed to extreme climate phenomena. Emissions continue to rise, and with that atmospheric concentrations of CO2 and global temperature. But emission growth is slowing globally and falling in many regions of the world.

Things could, of course, get worse in the future. But all of the key drivers of future emissions are moving in the right direction. Global fertility rates have fallen precipitously and population growth is likely to come to a halt in the coming decades. Economic growth is slowing in most industrialized and industrializing economies. The global energy system is slowly decarbonizing. Moreover, the primary factors that will determine how the climate affects human societies going forward are the same things that have so dramatically increased our resilience to climate extremes over the last century. Societal wealth, and the improved technology and infrastructure that come with that, mediate our relationship with climate hazards and moderate their impact on us.

For both ideological and strategic reasons, the environmental movement has long misunderstood and overlooked these factors. Environmental determinism has led the environmental and climate movements to fetishize environmental change and downplay our species remarkable adaptive capacities. A belief that catastrophic framings of climate risk would result in strong public demand for climate action has further led the climate movement and its many allies in the media, academia, and government to exaggerate the present day impacts of climate change.

The latter effort has abjectly failed. The issue has no greater support or salience today than it did forty years ago, when pollsters first started asking the public about it. People support climate action as long as it doesn’t inconvenience them or cost them money. When it does, public opinion swiftly turns negative.

Levitt and Dubner’s key innovation was the idea that you could solve the problem, or at least hold it at bay, without resorting to costly policies that the public was unlikely to support. The environmental movement predictably objected to this idea. What, after all, is the point of a climate crisis if you don’t get to slay the fossil fuel industry and construct a solar energy utopia?

That basic reaction to the technology has continued to obtain. The environmental community, mostly, continues to insist that climate change is an existential crisis but not so existential that it might justify geoengineering. The loudest climate advocates are overwhelmingly also loud opponents of geoengineering, insisting that it is a false solution and that the crisis can be averted through a mass mobilization of the global economy to rapidly transition to renewable energy.

But objections of the climate movement notwithstanding, geoengineering strikes me as exactly the sort of solution that political leaders, in the face of a climate emergency (real, imagined, or manufactured) and a public allergic to constraining its own consumption or paying for costly solutions, would turn to. As Nils Gilman observed in his 2020 Breakthrough Journal essay, The Coming Avocado Politics, there is really no reason to expect that the reaction to a major climate panic would be an embrace of eat your spinach environmentalism or a green new deal. Gilman focused on the possibility that catastrophism would stoke xenophobia and support for deportations and enforcement of energy poverty upon poor countries. But geoengineering seems like the sort of response that would fit comfortably as well.

This is the problem with the “break in case of emergency” framing that has attended the geoengineering discourse over the last decade. It assumes that the public discussion about the impacts of climate change reasonably approximates the actual impacts of climate change and that, hence, the technology will remain behind glass until it is truly needed. Nothing that has transpired in the climate discourse over the last fifteen plus years, since SuperFreakonomics brought the idea of geoengineering to public attention, should inspire any confidence that this is so.

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A Man-Made Climate Crisis

The problem with geoengineering is not simply that it is unnecessary given human adaptive capacities. Rather, it is that the technology is far more likely to cause a climate catastrophe than avert one. The reason for this is that termination shock turns climate change from a slow moving phenomena into a fast moving one.

Anthropogenic warming driven by the combustion of fossil fuels has warmed the planet very rapidly on geological timescales but quite slowly on human timescales. We experience far greater temperature variance in most regions of the world from winter to summer, or when we travel from Honolulu to Anchorage, than we have or will experience from climate change. We are resilient to temperature variance and extremes because human populations and societies have had centuries and millennia to adapt to those climates.

This has become something of a talking point for the climate movement in recent years, which claims that our present infrastructure is no longer fit for purpose in our superheated climate. But the actual data suggests otherwise. As wealth, technology, knowledge, communication, and migration have accelerated, our adaptive capacities have accelerated as well—much faster thus far than warming is amplifying climate impacts.

Could a social or economic collapse of some sort, driven primarily by factors other than climate change, dramatically undermine those capacities? It surely could. But the climate consequences of such a collapse would almost certainly pale in comparison to the direct consequences. The only plausible path to catastrophic climate impacts, in other words, entails more proximate problems whose consequences would be far greater than catastrophic climate change.

There is one major exception to this in my view though. Geoengineering. As opposed to the multi-decadal, century, and millennial times scales over which climate change is changing the climate, a termination shock due to the untimely cessation of geoengineering would significantly alter the climate at local and regional levels over decadal, or even annual, timescales. The temperature spike would occur predominantly over the course of one to five years. Most other climate impacts would unfold over similar timescales. Termination shock might disrupt the Asian and African monsoons and accelerate melting of the Greenland and West Antarctic ice sheets. Agricultural yields could see dramatic declines virtually overnight.

Geoengineering notwithstanding, all of these risks will be familiar concerns to anyone who has followed the climate discourse for very long. But geoengineering makes it possible for these changes to occur over the course of just a few years, not decades or centuries, stressing the ability of human societies to adapt because the rate of change matters as much as the magnitude. Such rapid climate change would occur far faster than anything produced by even the worst case emissions driven warming scenarios produced by climate modelers. It is, rather, almost singularly associated with geoengineering termination shock.

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The Climate Catastrophe Horseshoe

The climate discourse is a funny beast. A lot of people gravitated toward geoengineering for the same reason that Dubner and Levitt did, because it offered an alternative to the climate emergency. But once they became committed to the geoengineering solution, the solution started to reshape how they thought about the problem.

This is one of the underappreciated features of a wicked problem. It’s not just complicated. In a pluralistic society, and in the face of irresolvable scientific, economic, and technological uncertainties, a multiplicity of meanings are easily projected onto the issue. The nature of the problem and its solution are contested from all sides and the common intuition that solutions are proposed in response to how one understands a problem gets inverted. Problems are increasingly defined in ways that justify the solutions that various factions, constituencies, and interests are already invested in.

The original troll positioned geoengineering as an antidote to catastrophic framings of the climate issue—a kind of get out of jail free card for climate angst. If things really did get as bad as environmentalists said they would, we could always just geoengineer our way out of the problem. But as many geoengineering supporters came to embrace the idea, the reasoning subtly shifted. Increasingly, geoengineering is advocated not as a kind of insurance in case things get really bad but because they are already really bad.

Once you decide that human control of the climate is desirable, not a sin against nature, the desire to geoengineer becomes hard to resist. Wicked logic then almost inevitably drives you toward catastrophism to justify its use. As a result, geoengineering advocates and opponents now hold nearly identical views about climate risk, despite holding diametrically opposite views on geoengineering as a solution.

There is hubris on both sides of that divide. The climate movement remains far too confident that catastrophic framings of the issue will not only result in climate action but the sort of climate action that the movement has in mind. Geoengineering advocacy, meanwhile, simply assumes a level of technocratic competence that is nowhere to be found: that we will be capable of understanding the consequences of geoengineering in advance of undertaking it, that we actually have the technological capability to deliver sulfur particles reliably and with precision to the upper atmosphere, that wise global governance might assure that we will only use the technology in the face of dire necessity and in a manner that is democratically accountable, and that once we start, there will be some plausible mechanism to assure that we don’t stop prematurely.

Put the yin and yang of geoengineering advocacy and opposition together and what you get is an emergent, rather than intentional, path to geoengineering: the development of a technology with assurances that it would only be used under the most dire of circumstances, a global climate movement determined to characterize all negative climate related impacts upon society as proof of just such a dire predicament, strong political incentives for policy-makers to address climate change in ways that don’t cost very much, and the lack of any global institution with the legitimacy to decide when to start or how to stop.

Such an emergent path may even serve the interests of partisans on both sides of the issue. Advocates are effectively getting the world a little bit geoengineering pregnant through research and development, aided and abetted by the catastrophic claims of a climate movement that ostensibly opposes the technology. The climate movement gets a true looming apocalypse to motivate its decarbonization agenda, because without deep decarbonization, catastrophic climate change really does beckon in the event that the world fails to sustain geoengineering.

Such an outcome might serve both the climate movement’s social engineers and the geoengineering community’s aspiring climate engineers. But I fear that it is unlikely to serve the public’s interest. Geoengineering, instead, risks turning the climate movement’s catastrophism into a self-fulfilling prophecy.

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Thanks to fast-growing electricity demand, especially from AI data centers, demand for new nuclear energy is rapidly growing. In this analysis, we identify 74GW of planned or new nuclear reactor capacity in the United States. While it is unlikely that all of that capacity will ultimately be built, if even a fraction of it is deployed it would mark a historic turnaround for the US nuclear industry.

Historically, a commercial nuclear project required a regulated utility to build the plant, own the asset, and recover approved costs through rates. That is no longer the main event when it comes to planned new nuclear development. Today, the profile of potential commercial nuclear buyers has diversified, thanks, in large part, to AI’s new energy demand. Companies building hyperscale data centers are responsible for 30 GW, or 41% of the 74 GW of announced or prospective new nuclear reactor capacity in the United States. That is more than double the 18% currently under order from utilities and public-power buyers. If utility-hyperscaler hybrid deals are included, the total share of the commercial pipeline drawn from hyperscaler demand is nearly half. Hyperscalers now dominate the firm middle of the pipeline and are the largest identified demand source among more tentative projects. That is a dramatic shift for an industry that, until recently, effectively only had one class of buyers.

Hyperscalers and data-center developers are looking for large amounts of reliable, clean electricity, and nuclear is one of the few technologies that can plausibly provide firm power at that scale. But the story is not simply that AI demand will rescue nuclear. Nor is it that hyperscalers will replace utilities as the primary driver of nuclear project development. The reality is more complicated: non-utility buyers are creating much of the visible demand pressure, while utilities and public institutions still provide much of the deployment interface. In short, commercial nuclear demand is shifting away from decades of exclusive dependence on utilities and public-power buyers.

The technology mix is diversified too. The emerging pipeline is not simply a repeat of the historical large-LWR buildout. Small reactors and non-light-water reactor designs represent the majority of new orders at most stages of the deployment pipeline, from firm orders to more tentative demand signals. Large LWRs remain important, especially by capacity, but a range of reactor designs are being matched to different buyers and use cases.

While the market for new commercial nuclear projects is no longer just a utility procurement pipeline, this transition is still in its early stages. Demand is real and more diversified than in the past. Much of it however, from both utility and non-utility buyers, and inclusive of both traditional large light water reactors and smaller non-traditional technologies, has not yet become firm deployment activity.

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From Market Signals to Buildable Projects

To understand this market more clearly, we built a dataset of new U.S. commercial nuclear projects, programs, and demand signals, sorted by maturity. We separately track non-commercial projects such as research reactors, the DOE pilot program, and other demonstration projects–which generate operating data and reduce technical uncertainty but have a totally different deployment logic. Uprates to existing plants are also tracked separately.

The dataset groups the commercial pipeline into three maturity stages: building, firm, and tentative, and five specific tiers. The building stage captures projects that have crossed a formal licensing threshold—with a site, a design, financing, and an issued license or permit—and may have construction underway. The firm stage covers projects with NRC-docketed applications or site-specific development with pre-application activities: not yet reactor orders, but the bridge between market signal and binding order. The tentative stage captures earlier activity—state-backed efforts, committed developers without NRC engagement, and broader demand signals like fleet-level agreements or non-binding capacity targets. Read from bottom to top, the tiers describe a conversion funnel: the stages a project must move through to get from demand signal (Tier 5) to actual build (Tier 1).

As shown in Figure 1, the United States has a broad commercial new-nuclear pipeline mainly because Tier 5 is so large. Nearly 60 GW of announced or prospective capacity sits in fleet-level demand signals, while the more mature tiers remain comparatively small.

The enormous amount of capacity in Tier 5 especially demonstrates the changes in the U.S. nuclear reactor customer base –hyperscaler-linked demand is now a major part of the commercial pipeline. Hyperscalers now have a direct stake in 45% of announced or prospective commercial capacity of the roughly 60 GW in Tier 5. Hyperscaler-only entries account for about 21 GW, or 35%, while utility-hyperscaler hybrid deals add another 6 GW, or 10%.

That demand from hyperscalers is not confined to one corner of the pipeline. Hyperscaler-linked entries appear prominently in Tier 2, Tier 3, and Tier 5. This tells the story of a market in transition: hyperscalers are now one of the most important sources of visible market pull for new nuclear, but much of that pull remains upstream of orders. They are reshaping the demand landscape faster than new reactor projects are moving toward construction.

These new buyers are also influencing the technological mix of U.S. nuclear. Figure 2 shows that the demand pipeline is not simply a return to large LWR deployment. Across all stages and tiers except for Tier 2, small LWRs and non-LWRs account for most announced or prospective capacity, even though large LWR units are much bigger individually. This suggests that even where large LWRs remain significant, the pipeline is far more technologically diverse than the historical U.S. buildout. Also, buyers for non-LWR and small LWR are mainly hyperscalers. That suggests hyperscalers are not just adding demand to the traditional LWR market; they are disproportionately shaping the advanced-reactor demand to seek firm clean power.

To some, the hyperscaler demand pull is nothing more than a mirage. But rather, these early shifts in reactor demand should be understood as evidence that the U.S. is in a market formation process: the demand has arrived well ahead of the technological products, regulatory certainty, supply chain maturity, and financing support. Importantly, the demand for nuclear from hyperscalers is not only showing up in speculative new-build announcements. It is already showing up in the existing fleet, where capacity can be delivered faster. Hyperscalers are the clear catalyst behind the latest restart, uprate, and existing-capacity deals with a total of 8.3 GW of existing-fleet nuclear capacity: roughly 6.3 GW through existing-plant power purchase agreements, about 1.5 GW through restart-linked agreements, and about 0.5 GW through uprate-linked deals. In other words, that existing-fleet activity confirms the market pull is real, while the larger new-build opportunity remains earlier in the formation curve.

Still, this new demand is in an early stage. Fleet-level agreements, commercial frameworks, and high-case capacity targets are not yet build orders; they still have to become site-specific, financeable, and licenseable projects, and many early-tier entries even lack identified buyers.

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A Matrix of Orderbooks

The next generation of U.S. nuclear projects will not be built only by vertically integrated utilities ordering large reactors one at a time. Utilities will remain central, especially for grid-scale deployment, but they will not be the only source of demand or project formation. Nor will the market be built by data centers alone. Hyperscalers may become major nuclear customers, investors, or partners, but they still need utilities, developers, regulators, suppliers, and operators to turn demand into electricity.

The more likely future is a matrix of orderbooks: repeatable project structures matched to different use cases. Large reactors may be best suited to bulk power, regional load growth, and large industrial or data-center corridors. SMRs may fit public power systems, coal-site replacement, utility-mediated data-center demand, and certain industrial applications. Microreactors may scale first through defense, remote, and critical-infrastructure markets.

The point is not to pick a single winner. It is to create repeatable combinations of reactor designs, customers, sites, financing structures, and licensing pathways. Nuclear gets cheaper and easier to deploy when projects are not reinvented one at a time. DOE’s new American Nuclear Supply Chain Loans point in this direction. The program is not a final build order, but it is designed to support long-lead equipment for eligible projects and accelerate deployment of a standardized reactor design.

The data-center surge has changed the nuclear market in a way that is still difficult to measure but hard to dismiss. For the first time in decades, new nuclear is being ordered by large, fast-growing customers that need firm, clean, around-the-clock power at scale. Some announcements may become projects, others may not, but the sector is no longer waiting only on traditional utility procurement. In any case, nuclear deployment will only scale through a matrix of orderbooks across customers, developers, and utilities.

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In January, Senator Sheldon Whitehouse coined the term “climate hushers” to describe his fellow Democrats who stopped talking about climate change in recent years. Inside Climate News recently quantified this trend, observing a marked decline in congressional press releases that mention “climate change” since 2022.

Whitehouse and his allies have chalked up climate hushing to bad advice from a cowardly pundit class. In April, Bill McKibben called the phenomenon “a product of political consultants looking at polling data.” Last week, Kate Aronoff described hushing as “received wisdom among party pollsters and pundits,” while Aaron Regunberg attributed the trend to “a host of think tanks and pundits—mostly corporatist outfits like WelcomePAC, the Searchlight Institute, and the Breakthrough Institute.”

Most of the coverage of climate hushing has tended to invoke this polling and the punditry. In particular, the anti-hushers are furious about a September 2025 analysis from the Searchlight Institute counseling Democrats “Don’t Say Climate Change,” and a May 2026 op-ed in the New York Times in which the socialist scholar Matt Huber wrote “American voters broadly agree that climate change is a real concern and support addressing it, but they largely do not see it as a top priority.”

And, as the author of the original essay on what we now call climate hushing, I feel some standing to intervene here. So let me be clear: Climate hushing is not principally a punditry phenomenon. It’s an increasingly widespread stance taken not just by moderate strategists, but by the progressive politicians and environmental movement leaders who shape the Democrats’ climate and energy agenda. And it’s happening because the world is changing faster than the anti-hushers can keep up with.

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Take Robinson Meyer’s recent reporting for Heatmap. Many of the rising progressive stars in American urban politics got their start in the Green New Deal coalition of yesteryear, whether it was Zohran Mamdani’s “ecosocialist” upbringing or Nithya Raman’s focus on carbon neutrality in Los Angeles. But as Meyer astutely observes, green industrial policy quickly came into conflict with the anti-imperial commitments of this new progressive class. “Instead of revitalizing the country’s industrial might,” Meyer writes, “it sought to pacify and dismantle the military industrial complex.”

Portions of the environmental movement have also conceded that the old emphasis on the climate apocalypse is no longer tenable. A better approach “is talking about a climate solution, but it’s talking about it in a way that meets voters and the public where they are,” according to LCV Action Fund’s Sara Chieffo.

As Eric Michael Garcia observed, progressives’ new political project “does show how little the modern left talks about climate change compared to 2018.” Even the climate donor class has taken notice. “We gave them money, and all they do now is talk about Palestine,” said Open Society Foundation chairman Alex Soros.

But the mistake that almost everyone involved is making here, on both sides of the hushing debate, is in thinking that that the shift is one of talk or messaging. But it’s not merely a matter of whether Democrats should stop saying “climate change” or start saying it again. Rather, it’s that climate hushing reflects a reaction to the very real material developments that have occurred since climate change came to occupy such a prominent place in Democrats’ issue prioritization.

As I have written since before the re-election of Donald Trump, the events of recent years have destabilized the conditions that characterized the era of the climate hawk. The once seemingly durable Obama-era political coalition is defunct. Interest rates, inflation, and energy prices are stubbornly higher than they were in the 2010s. First Ukraine, then Gaza, and now Iran have drawn political and economic attention away from the domestic decarbonization agenda. Gaza in particular has reordered the progressive prioritization stack, with climate activist groups like Sunrise now almost entirely focused on solidarity with Palestine.

These events in aggregate have fundamentally altered the climate commitments of governments and corporations alike. Net-zero is gone and it’s not coming back. The 1.5 degree target, which was always preposterous, is now acknowledged as such by the United Nations and the wider commentariat.

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And all of these developments have occurred during the relative infancy of the issue that will increasingly eclipse climate change even within the attention spans of progressives and environmentalists: artificial intelligence.

AI obviously reorganizes pre-existing emissions and infrastructure debates. New data centers are powered overwhelmingly by natural gas, obviating the emissions expectations and modeling scenarios that undergirded energy and climate policies like the Inflation Reduction Act. Many anti-fossil activists have shifted their attention to these data centers as a result. The pro-technology wing of the climate movement, meanwhile, is trying, and mostly failing, to shoehorn an electrification-and-renewables agenda crafted before the rise of AI onto a context in which data center load growth is outpacing even the impressive expansion we have come to expect from solar, electric vehicles, and heat pumps.

But this is only the beginning. If projections of AI compute and load growth are even directionally correct, AI will take up not just an increasing portion of our infrastructure and electricity demand but also of our cultural and political attention. In my view, that can all redound to the benefit of electrification and decarbonization—AI may be the strongest demand signal ever for new low-carbon energy technologies. But beyond that, I think AI will come to occupy a central societal anxiety that progressives always hoped would become attuned to climate action.

Democrats, the climate movement, and broader civil society may not have fully reckoned with this epochal shift. But sooner or later, they’ll have to. Progressives and climate advocates are already talking more about data centers, Gaza, and energy prices than they are about heat waves and emissions targets.

In other words, the climate hushing is coming from inside the house. And the sooner that pundits like McKibben, Regunberg, and Aronoff understand that, the better off our climate discourse will be.

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In early 2005, one of the largest public works projects in American history was about to age into eligibility for the National Register for Historic Places. The Interstate Highway system, launched by the Federal-Aid Highway Act of 1956, would reach its 50th birthday in June 2006—the age at which federal law considers a place as potentially historic. The officials who administer the nation’s preservation law needed to figure out how to handle this impending deluge of work. Treated as eligible, the system’s 46,700 miles would trigger historic review for every federally funded repaving and guardrail replacement project.

Rather than absorb the burden, the Advisory Council on Historic Preservation exempted the entire Interstate Highway System from historic preservation rules. The Council adopted a rule relieving federal agencies from the obligation to consider the effects of their actions on the Interstate as a historic property, reserving review only for a short list of individually significant bridges and interchanges. Moving in parallel, Congress passed legislation exempting the bulk of the system from a related preservation requirement that same year.

The exemption solved an immediate administrative problem. But it duly raised a more fundamental one. If one of the most significant public works projects in American history had to be exempted from historic review to keep that review process functioning, the design of the process is exceeding its intended purpose. The National Historic Preservation Act (NHPA) requires federal agencies to consider how their funded, permitted, or otherwise assisted actions affect “historic properties.” Critically, the statute defines that category to include not only sites already listed on the National Register but also any site eligible for listing. Eligibility hinges on whether a property is generally over 50 years old, retains its physical integrity, and ties to a significant historic event, an important person’s working life, a distinctive design tradition, or a body of information important to our understanding of history. Of these criteria, only the 50-year threshold is genuinely objective; the rest invite interpretation, which means a determined challenger can drag almost any property approaching half a century old into a Section 106 review. NIMBY interests routinely exploit this breadth to block development, layering on procedural hurdles that are expensive, time-consuming, and litigious—and that inject substantial uncertainty into project timelines.

The 50-year threshold poses a compounding challenge as America’s mid-century infrastructure ages into eligibility. The post-New Deal building boom produced an enormous stock of highways, dams, federal buildings, and housing, much of which is now crossing the half-century mark. The average year of construction recorded in the National Bridge Inventory is 1964, meaning the average American bridge is more than 60 years old. Each passing year enlarges the pool of properties that challengers can argue require Section 106 review, expanding the surface area for litigation and delay.

Congress passed the Infrastructure Investment and Jobs Act (IIJA) in 2021 to begin addressing a generation of infrastructure decay. The slow rollout of the $1.2 trillion package has revealed a deeper problem: the historic preservation framework built in 1966 to protect a curated set of significant sites has grown into a system whose reach now extends across most of the infrastructure that legislation aims to repair. Congress authorized the largest federal infrastructure investment in a generation, but the federal preservation review system has grown so expansive that new infrastructure spending generates a corresponding surge in review.

That much of America’s roadways, bridges, and buildings are more than 50 years old means that they are aging, not historic. Improving—or rebuilding—our infrastructure and housing will require a system that does not generate endless review over technicalities. Reforming the NHPA is a step in the right direction.

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Expanding the Universe of What Counts as Historic

When Congress passed the NHPA in 1966, it broke from sixty years of curated federal historic preservation. The three preceding statutes—the Antiquities Act of 1906, the National Park Service Organic Act of 1916, and the Historic Sites Act of 1935—had identified a small set of obviously significant national treasures (Mesa Verde, Independence Hall, Monticello) for individual designation. In 1966, the NHPA replaced that model with the National Register of Historic Places, State Historic Preservation Officers (SHPOs), and the Section 106 review process, which required federal agencies to consider the effects of their actions on properties on the Register.

The universe of covered properties has expanded steadily ever since.

As more kinds of properties qualify as historic, more procedural requirements are being attached to each one. The 50-year threshold exacerbated this expansion, pulling a larger cohort of properties into the system every year, which may have seemed manageable when Congress wrote the statute in 1966, but functions very differently against a built environment dominated by mid-century construction.

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Capacity and Delegation

Federal funding for the offices conducting these reviews hasn’t kept pace with the workload. A key role of SHPOs is to survey, evaluate, and nominate significant historic buildings, sites, structures, districts, and objects eligible for the National Register. SHPO Section 106 caseloads jumped 42.7% in a single year following IIJA, reaching 177,400 reviews in FY2023. Between 2020 and 2024, SHPO offices’ share of the Historic Preservation Fund fell from 44% to 32.9%. The workload climbed; the budget for handling it didn’t follow.

The workload has also shifted. When Congress created SHPOs in 1966, they were meant to advise federal agencies on Section 106 compliance—the federal agency was the responsible party, and the SHPO supplied expertise. Over time, the day-to-day review work has moved onto SHPO and THPO staff: identifying properties, assessing effects, drafting findings. The 1992 amendments accelerated the trend by creating THPOs and allowing them to assume SHPO functions on tribal lands. But the THPO appropriation in the Historic Preservation Fund has not kept pace with the addition of new THPOs—five to ten of which are established each year—so each office’s share of the pool has shrunk. Federal agencies still hold formal authority, but the offices doing the work are underfunded relative to the caseload they’ve absorbed.

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The Limits of Existing Exemptions

The growing review burden has not gone unrecognized. Over the past two decades, the Advisory Council on Historic Preservation has exempted routine work on one aging sector after another, highways, common bridges, rail corridors, federal buildings, and nearly all of telecommunications. Each of these exemptions concedes that subjecting ordinary maintenance to historic review has become unworkable—leaving intact the review process for large construction projects that would naturally have significant effects.

However, these carve-outs are far too narrow to fully address the scale of the issue. Every exemption only reaches to the edge of the official project boundaries, while the potential effects that can trigger review can extend miles in any direction. The area surrounding these aging infrastructure components is also aging and increasingly eligible for listing on the National Register. For one federally funded interchange reconstruction in Reno, the agency had to evaluate more than 1,400 properties in the project’s path, including over 650 postwar homes that had reached 50 years of age, even though the Interstate itself was exempt from review.

These sector-specific exemptions don’t include maintenance for transmission lines, oil pipelines, and water mains. Laid in the same postwar decades, these systems are now crossing the 50-year threshold just as they most need maintenance and upgrades, and have no exemptions for historic review.

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Moving Forward

More money won’t fix process design flaws; we need to rethink how much these regulations are helping to preserve our cultural identity and how much they’re impairing efforts to build a better future.

Maintenance and routine work for transmission and pipelines, which can cross hundreds of miles and sweep large swaths of the landscape into review, should get the exemption they lack. Better still, a single standing rule should exempt routine maintenance within existing rights-of-way across all sectors, rather than carve out one at a time. Environmental review already treats this work as routine: the same corridor maintenance project can qualify for a categorical exclusion under NEPA, yet still face full Section 106 review.

As more infrastructure approaches the review threshold each year, Congress should move away from treating broad classes of postwar infrastructure and development as presumptively eligible for the National Register. Common resource types—including highways, bridges, transmission lines, pipelines, utility facilities, and standard residential and commercial development—should be presumed ineligible absent a showing of exceptional significance. For purposes of federal review, eligibility should require not merely an association with broad historical trends, but a demonstrated national significance or exceptional distinctiveness relative to the thousands of similar resources produced during the postwar building boom. States would remain free to recognize and protect locally important resources through their own preservation programs.

Such a reform would preserve protection for genuinely important landmarks, cultural resources, and public works while preventing ordinary aging infrastructure from being swept into an ever-expanding review system simply because it has crossed an age threshold. And it would help ensure that the money intended to repair the country’s aging systems is spent on repairs, not absorbed by the review.

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Antares Nuclear’s Mark-0 reached zero-power criticality at Idaho National Laboratory (INL) on June 4th. Valar Atomics’ Ward 250 followed later that month in Utah, becoming the first DOE-authorized reactor built and operated outside the national laboratory system. And Deployable Energy, in DOE’s Nuclear Energy Launch Pad program, reached criticality at INL yesterday, making it the third reactor to meet the July 4 target. Aalo anticipates reaching criticality this week.

That is real progress. It is also easy to misunderstand.

Following July 4th, the Reactor Pilot Program will likely be treated in one of two narrow ways. Supporters may cast the milestone as proof that advanced nuclear has arrived: that the major barriers have been broken, that commercial deployment is close, and that the program has shown how to move around the slow machinery of nuclear regulation. Critics may take the opposite view: these are small test reactors, many operating at zero or low power, not commercial plants delivering electricity to the grid; therefore, the program is mostly symbolic.

Both reactions miss the point. The Reactor Pilot Program was a test of whether the United States could recreate the innovation cycle for nuclear developers to do what every other complex technology sector depends on: build, test, learn, and improve before scaling.

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Stuck in a Narrow View

Most people take a narrow view of the RPP, its functions, and its value. There is no way to cover everything here, but we will expand on some topics that are generally reduced to a polarized talking point, or completely ignored.

These are not commercial reactors.

The Pilot Program was never about making commercial plants by the 4th of July. While companies like Radiant and Oklo entered their “full power” design into the RPP, those reactors are being demonstrated at the INL, not a customer site.

Focusing on the RPP not producing commercial reactors is missing the point entirely. You might be able to make a case that the RPP diverted attention and resources from companies that were aiming at a commercial product in several years. But, outright rejecting that the RPP gets the participating companies closer to a commercial product than they were before is nonsense.

Every product has a prototype; it’s just a matter of whether you admit it or not.

Technology readiness level (TRL) is a concept used to evaluate the progression of a project. NASA first developed TRL, but it has been adopted broadly, including by the DOE, and is used in most industries. You can see the TRL stages below:

The RPP helps reactors move from TRL 3 to TRL 5 or 6. In the past, many nuclear power projects tried to skip TRL 5-7 and go straight to TRL 8, a full-scale project that is qualified in the real-world through testing. That is where nuclear has often gotten into trouble. When the first real test of a design is also the first commercial project, every unresolved technical, construction, operational, or regulatory issue shows up at the most expensive possible moment.

The RPP does not make these reactors commercial products overnight. But it does move participating developers further along the maturity curve by forcing real hardware, real operations, real safety cases, and real test data into the process earlier. That is not commercialization, but it is a necessary step toward it. A step that has been absent in recent history.

This is all just PR.

Yes, the Pilot Program, in small part, is for PR. Choosing the 4th of July, on America’s 250th birthday, is certainly for effect, and does not match the specific timeline to a specific need. But it is the norm for companies to boast about achievements. If that was the real goal, this is a very expensive way to pay for marketing. Investors are understandably enthusiastic about seeing real-world progress in a field that has been criticized for years for only making paper reactors. For some developers, the deadline served as a forcing function to move away from the typical decade-long development timelines of the nuclear industry in favor of one that takes years. For others, it was simply good PR to be selected for the Pilot out of the sea of developers.

Companies had to consider the cost of participating in the RPP and building a prototype against the value of it, which, as advertised from the outset, did not include selling to a customer, but admittedly did include demonstrating something for investors and public news cycles.

After years of stagnation, and the last major project—Vogtle reactors 3 and 4 near Augusta, Georgia—having major issues, it is odd that some are downplaying the RPP as trivial. It is a bit absurd to suggest no one should have been inspired by past demonstrations and following commercial products, such as landing the first reusable rocket, or the first alternating current generator, wireless charging, or finishing the Hoover Dam. Those were clearly not just for PR.

This step is unnecessary.

Prototypes are not always necessary, but a well-designed prototype is always useful.

The United States has a lot of experience with prototyping reactors. American developers also built many first-of-a-kind commercial projects. Some did not work well and were ultimately decommissioned after a brief existence. The challenge becomes pinpointing, from the start of a project, which step in the figure below is the unnecessary step.

Almost every technical or mechanical product had a prototype that preceded it. The expected value, in terms of building the supply chain, increasing company knowledge, finding opportunities for innovation, and most importantly, catching problems before moving into production, has to be weighed against the cost in money and time. From an accounting point of view it is hard to put specific numbers to most of the benefits of prototyping. Even project risk reduction is hard to define. As the tolerance for project risk decreases, the more you are willing to pay to eliminate tripping points. Most nuclear power projects have very small risk tolerance and want on-time, on-budget guarantees. Conversely, it is easier to put a dollar value on the cost of the parts and labor. Add in the uncertainty related to licensing and permitting for a test reactor, and it is usually easy to make the case that a prototype costs more than it saves.

In other words, we can assess the potential reward from a successful project, but we cannot truly assess the project risk of getting that reward. The risk/reward relationship is unknowable, or at least highly uncertain.

Most major companies that are known for innovation use cost-benefit analyses to inform which concepts should receive attention, but almost never use them to justify skipping the prototyping phase. This is especially true for safety-significant products, like vehicles, medication, manufacturing equipment, or consumer electronics.

This approach is challenging for large reactors. They take years to build and cost billions of dollars. It would be challenging to justify that as an R&D expense alone if it could not also sell power. The result is the first customer becomes the test case, and the design is improved for the second customer. Buyers have rejected this approach after Vogtle. Smaller reactors can be prototyped more easily, just like Boeing can build a prototype airplane to test manufacturing and operations, before finalizing a production-ready design.

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How the Pilot Program Fits Into the Innovation Cycle, or, How to Grasp the Holistic View of RPP

The innovation cycle is abstract to most observers, and concepts of innovation abound. It is very tempting to think, “why don’t you just build the final product?” due to near-term consumer demand. But this trivializes the uncertainty of technological innovation, and the effort required to build something new.

An innovation cycle is the process by which a technology moves from concept to product through repeated rounds of design, testing, learning, and improvement. A developer starts with an idea, models how it should work, tests pieces of it, builds larger integrated systems, identifies what failed or did not perform as expected, changes the design or the manufacturing process, and then repeats the cycle at higher levels of maturity.

This is not unique to nuclear.

At some point, developers need to learn how the design behaves when the parts are assembled, when operators use procedures, when instrumentation collects data, when construction sequences meet field conditions, and when the system is reviewed under a real safety case. When manufacturing and building the prototype many challenges will be discovered. In the prototype phase they are minor, but if you are building a commercial project you will have to stop working, lose a lot of worker hours, solve the problem, possibly ask the regulator for approval, and then move forward. This happened multiple times in the process of adding two AP1000 reactors at Vogtle.

Building forces you to invest in the equipment, workforce, and processes you will need to build a full commercial product. There is no substitute for this step.

A part might look perfect in the model, but in manufacturing, an edge always forms a bur that needs to be removed by hand. A part might come in from a supplier out of tolerance and not fit, leading to a decision to vertically integrate production of that component. An assembly sequence may be technically possible but impractical in the field. A construction step may require a different tool, procedure, or workforce plan than expected. These are exactly the kinds of problems a prototype is supposed to reveal before a commercial project has to absorb them.

There is a lot that you can’t do with modeling. Test loops for coolant or cycling single components provide very useful component-level data, but cannot provide system-level data, or help with assembly. The Integrated Effects Test is one example of a test built for this purpose.

With full systems, you can test processes that you cannot fully validate at a component level: commissioning, startup, operations and monitoring, regulatory oversight, transients and simulated failure modes. Kairos has been on this path for years, from their Engineering Test Units that are non-nuclear, to Hermes, their first nuclear reactor. (It is odd that many of the people that want developers to go straight to commercial facilities are more negative about the RPP than they are about Kairos, with many prototyping iterations.) But Kairos learned many important lessons in their prototyping iterations, and vertically integrated capabilities to avoid future problems.

Operational prototypes can test criticality, geometry, and get data that you can’t get in a model. When your licensing case for a full-power version rests on validation of your models, this is one of the few options available.

Modeling and simulation are necessary for nuclear projects because that work also supports regulatory engagement. Digital Twins of full-scale facilities are valuable for simulating construction, operations, and maintenance.

Prototyping is a fundamental step towards making commercialization possible. The industry moved away from prototyping reactors because it was an expensive option for large reactors with high regulatory costs. The need for prototyping did not disappear. The opportunity to do it became harder to justify.

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Our Take: A Holistic View of the RPP

The Reactor Pilot Program’s success should not be measured only by whether three reactors reached criticality by July 4. That milestone matters, but the more important question is whether the program helped the United States rebuild a practical innovation cycle for nuclear energy: prototypes that generate useful data, a DOE authorization pathway that can be repeated, NRC licensing that can use DOE-generated experience without surrendering independent review, and developers that can turn early test results into safer, better-performing, more commercially credible products.

Seen narrowly, the RPP can look too small to matter or too preliminary to count. Seen holistically, it is one part of a larger shift in the nuclear deployment ecosystem. DOE created an expedited pathway for test reactors. Developers put hardware, capital, and teams behind early nuclear prototypes. Regulators are being asked to think more carefully about how testing, authorization, and commercial licensing should interact. Policymakers have begun to treat nuclear deployment as a serious national priority rather than a distant aspiration.

The RPP should be understood within that larger system. Nuclear deployment depends on many nonfungible pieces: test reactors, commercial licensing, fuel supply, manufacturing, financing, customer demand, regulatory modernization, and workforce capacity. Progress in one area does not solve the others, but it can make the whole system more capable. A narrow view of the RPP misses that. Its value is clearest when it is seen as one component in a broader effort to rebuild the conditions for nuclear deployment.

Companies entered the RPP for different reasons, and the next stage may not fit every technical goal, business model, or development timeline. That should not be read as failure. A useful prototype pathway should help companies determine what they need next, whether that is continued testing under DOE authorization, a move toward NRC licensing, more design work, a different site, or a different market.

The RPP’s influence may also extend beyond the original cohort. Deployable Energy’s criticality through DOE’s new Nuclear Energy Launch Pad initiative suggests that the pilot helped establish a broader idea: advanced reactor developers need a faster, more practical route to build and test real systems. Launch Pad is now the test of whether that idea becomes a standing capability rather than a one-time deadline exercise.

The Reactor Pilot Program was never going to be able to solve every barrier facing advanced nuclear. But the RPP did challenge a piece of the status quo that had become too easy to accept: that nuclear developers had to move from paper designs and component tests directly into full commercial licensing, with little room for reactor prototyping in between.

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With the gradual re-opening of the Strait of Hormuz, gas prices have finally started falling. Yet California drivers are still paying more than anyone else in the country. In mid-June, regular gas averaged over $5.50 per gallon compared with about $4.00 nationally. Pump prices will remain high across the state until Sacramento reforms the policies that artificially raise fuel costs.

Among those policies, the Low Carbon Fuel Standard (LCFS) is especially overdue for reform. It should impose lower costs on drivers while doing more to reduce emissions and support electrification.

The LCFS adds nearly 20 cents per gallon of gas and even more to diesel, but delivers little discernable benefit to Californians. It requires fuel suppliers to reduce their carbon intensity, largely by shifting toward biofuels made from corn, tallow, soybean oil, used cooking oil, and other sources. Companies import most of their biofuel from out-of-state at a price premium, passing the cost on to drivers.

This cost is only expected to rise as the state’s climate targets grow more stringent, pushing companies to further support biofuels as well as vehicle electrification. Under a worst case scenario, costs could rise as much as 85 cents per gallon over the next few years, exceeding the state gas tax, which is already the highest in the country. Sacramento can and should tightly cap LCFS costs to ensure that never happens.

While policymakers originally thought the LCFS would reduce greenhouse gas emissions, many researchers now find it has had little impact. Most of the biofuel that drivers pay extra for under the program would have been produced anyway due to a federal mandate, the Renewable Fuel Standard. It just would have been used in a different state. This redundancy will only get worse. The federal biofuel mandate expanded this year by a record amount, effectively requiring companies to produce almost all the biofuels that the LCFS then subsidizes.

And, to make matters worse, the small amount of biofuels that the LCFS may incentivize are likely to actually raise emissions. A recent UC Davis and Berkeley working paper found that diverting soybean oil and other vegetable oils to biofuel drove over 4 million acres of forest loss internationally, generating enough emissions to potentially make the biofuels more carbon-intensive than the fossil fuels they replace.

The program must be reformed to make any added cost for drivers worth it. The LCFS should at least be limited to fuels that aren’t mandated at the federal level. That would keep the program focused on emissions reductions that wouldn’t otherwise happen and exclude the most carbon-intensive biofuels.

But policymakers should also revamp the program to better support the electric vehicle transition. Less than a third of LCFS support last year went to electrification, much of it to electricity and electric vehicle rebates. Yet multiple new studies find that funding charging infrastructure instead is the most cost-effective lever governments have for promoting electric vehicle adoption. Light-duty electric vehicles are already cost-competitive for many buyers. What is keeping people out of them is access to chargers. A single fast charger, whether at an apartment building or on a highway, can serve dozens of electric vehicle owners while a vehicle rebate subsidizes only one, and frequently a well-off household that would have bought the car anyway. Redirecting the LCFS toward charging infrastructure, especially in the underserved corridors and apartment-dense neighborhoods that private investment has bypassed, would close the gap that is actually slowing electrification.

The war in Iran and closure of the Strait of Hormuz reminded Californians that they have little control over global oil markets. But they do have control over state policy. Sacramento may not be able to prevent the next geopolitical crisis from driving up fuel prices. But the legislature and the next governor can stop adding unnecessary costs on top of those shocks. Reforming the LCFS would be a good place to start.

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At Breakthrough we’ve been digging into U.S. and California biofuel policy for the past few years. Here are a few highlights:

Biofuels increase food prices; incentivize more agricultural land-use and thus risk deforestation and other environmental problems; and are an inefficient way to support producers.

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Crop-based biofuels, like the ones that California’s LCFS program incentivizes, drive deforestation, grassland conversion, and other land-use change around the world. Cropland expansion due to biofuel production has been significantly larger than initially projected.

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California’s LCFS is paying for biofuels that are already incentivized by the U.S. federal Renewable Fuel Standard. So, not only does LCFS fail to actually reduce emissions, it is overcharging Californians for a biofuel incentive program that does not incentivize new biofuels.

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Congress may soon rewrite a key piece of environmental law without knowing what it does. A comprehensive deal to reform federal permitting will likely include changes to Clean Water Act Section 401—the provision that grants states and Tribes authority to certify, block, or impose conditions on federally permitted activities that may result in a discharge into state or Tribal waters. The trouble is that the most important decisions made under Section 401 are fragmented across states, buried in agency files, and often folded into other Clean Water Act permitting regimes. Lawmakers are poised to fix a program they cannot actually see.

That blind spot matters because the politics here are genuinely contested. In 2016, New York state began to use Section 401 to block gas pipelines partly on climate change grounds. The law gives states broad deference on what they may consider, and New York also cited water quality impacts.Republicans and their stakeholders argue the rejections were “wholly unrelated to water quality.” Section 401 also implicates dam re-licensing, which can drag on unresolved for years. These are the fights driving reform. Yet there is no comprehensive data to inform whether existing challenges reflect a pervasive national problem or just a narrower set of high-friction cases concentrated in particular sectors, states, or agencies.

The fix isn’t a maximalist archive of every certification document. Sound analysis requires clean, high-level data that lets us see and understand Section 401 decision-making—the kind of information that reveals the scale and scope of repairs the program actually needs.

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Two policy problems, no evidence

Two issues dominate the Section 401 debate. First, the one-year time limit on certification has proven difficult to implement in certain high-profile circumstances. States and project sponsors have exploited loopholes to circumvent it, and the practice has emerged as a stalling tactic states can deploy for disfavored projects. In the Hoopa Valley case, California and Oregon strategically withdrew and resubmitted the same certification request for over a decade, thereby usurping “FERC’s control over whether and when a federal license will issue.” A politically contentious transmission line or pipeline can involve multiple state authorities—and multiple opportunities to game the timeline.

The court ruled the withdraw-and-resubmit scheme illegal. But the facts of Hoopa Valley may not reflect a widespread trend; dams and pipelines may be the only true friction points. That distinction matters for the remedy. The SPUR Act, for instance, would transfer water quality review to FERC—but that solution may leave other problems in place with other types of projects.

The second concern is that states sometimes use Section 401 to block projects because they oppose fossil fuels. Republican stakeholders cried foul when New York used climate change as the reason for denying certification to multiple natural gas pipelines, arguing that climate change is not a water quality impact resulting from a discharge. But without proper data, it’s difficult to say whether state objections unrelated to water quality are large or small. While there are anecdotal cases of Section 401 being leveraged to oppose projects on grounds like climate, noise, or traffic, anecdotes are insufficient to inform our policy options.

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What the records actually look like

The Clean Water Act hands states and Tribes the job of administering Section 401, which means no centralized federal repository exists to track certifications. To see what studying the program would actually require, the authors sought records through the public records process in four states where Section 401 sat at the center of pipeline fights. The results illustrate the structural barriers to building any comprehensive dataset.

In West Virginia, the disputed certification for the Mountain Valley Pipeline yielded extensive litigation and drastically higher costs—a project initially estimated at $3.5 billion ran nearly $10 billion, and Congress had to intervene by statute to force it to approval. Yet the state’s files lacked searchable metadata on applicants, timelines, project characteristics, or outcomes. It was even unclear which documents were certifications. Obtaining the full record required labor-intensive downloads of thousands of documents.

In New York—home to the climate-based denials at the heart of the national debate—certification records are dispersed across nine district offices. The agency determined that producing all certifications and applications would be too time-consuming and therefore infeasible, offering only a subset of denial records instead. The authors made their initial request in December 2025; after repeated delays, they had not received the records.

Massachusetts shows how Section 401 reshapes projects without an outright denial. In 2016, the state certified Tennessee Gas’s Connecticut Expansion Project with 47 conditions, including a requirement that the company convey 36 acres of forest, wetlands, and open fields to offset 4,792 square feet of wetland fill. Conditions like these avoid the conflict of a denial or lawsuit but add costly, time-consuming demands—and the underlying data is not publicly available. The state estimated nearly $1,500 to fund 60 hours of staff search time to produce its records.

In North Carolina, the Atlantic Coast Pipeline demonstrates how the program can shape outcomes even without a formal denial. After certification was issued, a coalition petitioned to revoke it, citing newly discovered impacts on the Lumbee community and inadequate analysis of cumulative water quality effects. The agency did not publicly act before Dominion and Duke canceled the $8 billion project in 2020. North Carolina keeps a publicly accessible database—but the files have no metadata, are organized in county folders, and consist of handwritten documents, emails, and other paperwork, making them unsearchable and unusable.

Despite maintaining records, none of these states could readily provide information suitable for systematic policy analysis. Program administration is fragmented across states, Tribes, and territories with varying resources and priorities, which makes national analysis effectively impossible. A few well-resourced states do better—Colorado offers an interactive map, Illinois clear legal information—but the performance of a few states cannot substitute for a functioning national system.

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The cost of guessing

The practical consequence of this vacuum is that policymakers base their decisions on anecdote rather than evidence. Critics frequently cite New York’s handling of the Northeast Supply Enhancement pipeline as an example of a state obstructing interstate energy infrastructure. But without systematic data on denial rates, approval timelines, and certification conditions, there is no way to know whether that case is representative or exceptional. We are debating reforms to a program we cannot empirically describe.

And the reform options on the table respond to very different diagnoses. Congress could narrow the statute to exclude non-water-quality considerations and tighten timelines. It could transfer pipeline certification authority to FERC, as the SPUR Act proposes. Or it could create a separate, faster certification track for pipelines. If delays and overreach are concentrated in pipelines and dams, sector-specific reform may be enough. If non-water-quality considerations appear broadly, a general statutory narrowing may be warranted. Without data on denials, timelines, conditions, project types, and agency practices, Congress cannot know which reform would solve the problem, which would leave dysfunction in place, and which might create unintended consequences.

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A fix that respects state authority

The natural worry is that a federal reporting requirement could intrude on state authority. Under the anti-commandeering principle—set by the Supreme Court in New York v. United States and Printz v. United States—Congress cannot compel states to administer a federal program, and EPA likely cannot impose such a requirement through rulemaking alone.

But the Clean Water Act already contains the answer. The NPDES permitting program pairs standardized reporting with program authorization: a state that chooses to run the program accepts federal reporting standards as part of the deal, and for states that decline, EPA administers the program directly. Section 401, by contrast, grants certification authority with no corresponding reporting obligation, leaving the program’s most consequential decisions opaque. Congress likely has authority to amend Section 401 to require standardized reporting as a condition of participation—and EPA, which already defines what certifications must protect and operates analogous national databases, is the logical home for it.

The reporting itself would be modest: application and decision dates, outcome, the type of underlying federal permit, whether conditions were standalone or embedded in another permit, general project category, and high-level classifications of any conditions imposed—each paired with a link to the underlying record. This would make Section 401 decisions visible and comparable without constraining substantive state authority, and it would be ripe for AI-driven analysis.

Congress may need to make choices on Section 401 before comprehensive data is available. That doesn’t diminish the case for future-proofing decision-making against guesswork. Permitting reform is a long-term, iterative effort across many statutes—better to have data informing decisions along the way. The success of reform may ultimately depend on whether its effects are measurable. Congress shouldn’t continue to regulate in the dark.

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On June 22, the World Bank’s management will decide whether to remove the target to spend at least 45 percent of the Bank’s annual lending on climate change. Scrapping this target cannot come soon enough.

The World Bank’s climate spending target distorts its core development mission. Bureaucratic incentives were skewed towards satisfying climate-accounting thresholds rather than impact on poverty reduction. Spending decisions sometimes bordered on the absurd. Precious dollars were spent attempting to reduce emissions by 30 percent in Guinea-Bissau, an extremely poor country with carbon emissions of 0.1 tonnes per capita. Poor countries need growth plans, not “ridiculous decarbonization.”

These very real concerns were ignored in favor of a climate portfolio that is, at best, dubious. At the World Bank, projects related to healthcare, education, governance, and payment systems were assigned climate-benefit scores without clear explanations, proper documentation, or measurable evidence of decarbonization. Even now, climate finance accounting lacks transparency, standardized metrics, and independent verification, making it difficult to assess whether reported climate spending addresses climate change in meaningful ways. An elaborate climate scorecard does not shed light on the link between climate finance and outcomes. Climate finance bean counting is mostly a shell game.

We don’t know whether the World Bank’s lending portfolio genuinely changed because of climate targets, or whether projects were simply being categorized differently. But plenty of damage has been done. The World Bank has refused to finance fossil-fuel energy systems that are essential for industrialization and electrification in Africa. Fossil fuels are necessary to build resilient infrastructure, provide reliable electricity, and build transportation networks, air conditioning, cold storage, and other practical investments that generate economic growth. Fertilizer, made most cheaply with natural gas, is essential to raising agricultural yields and preventing famine. Reliable and cheap energy remains indispensable for development, and renewable systems, on their own, do not meet industrial and infrastructure needs in low-income countries.

It has been all but impossible for African citizens to raise concerns about the World Bank’s priorities. Faten Aggad, a prominent policymaker and negotiator in Africa, recently explained on LinkedIn:

“The messages from our non-African friends reminded me of the gaslighting many of us were subjected to whenever we raised questions that exposed contradictions. You ask questions on how to let go of fossil fuels for countries who have the endowment in a context of poor finance for renewables and sovereignty and you’re told you defend the position of the fossil fuel lobby and “petro-states” (whatever that means!). You ask questions on the Net Zero Framework and its cost implications on Africa and you are supporting the anti-NZF lobby. You ask questions on the application of Carbon Border Adjustment Mechanism and how to ensure it doesn’t impact negatively Africa and you are labelled a polluting industry lobbyist. In the process, the real question of how to safeguard African interests is never answered nor seriously engaged with.”

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Removing the 45 percent climate target is all the more important following the Trump administration’s hollowing out of American development and foreign aid programs like USAID. Prior to the cuts, USAID spent roughly 1% of the U.S. federal budget—$67 billion in 2023—on various projects such as maternal and childhood health, economic development, and food aid, amongst other things.

Trump’s aid cuts were met with condemnation from Biden-era bureaucrats and foreign policy leaders. Former Secretary of State Antony Blinken warned “when America pulls back, other countries fill the vacuum—often not in ways that advance our interests or values.” Former USAID chief Samantha Power argued that development assistance is not charity, but rather a strategic investment in global stability and American security. She and others pointed out that the closure of USAID meant that ongoing programs addressing hunger, maternal and child health, clean water access, and education in low-income countries have been disrupted or terminated. Clinics dispensing HIV drugs have been shuttered, and more people are dying from AIDS.

But these same officials actively supported reprogramming precious development dollars to climate mitigation programs. For more than a decade, wealthy countries redirected development aid toward climate mitigation in poor countries, in line with the preferences of domestic environmental groups in donor countries rather than with the needs and wants of those receiving aid. Western leaders framed climate finance as a strategic investment in their own futures.

“Climate change is the greatest common threat the world faces today,” said the very same Samantha Power in 2021, then chief of USAID. Gillian Caldwell, USAID’s chief climate officer under Biden, bragged that she had turned “the largest government development agency in the world into a ‘climate agency’ in which our $30 billion+ budget is informed and in some cases driven by the climate crisis.” European politicians echoed these sentiments. “The global fossil fuel crisis must be a game-changer. So let us not take the ‘highway to hell’ but let’s earn the clean ticket to heaven,” said Ursula von der Leyen, President of the European Commission. German Chancellor Olaf Scholz framed climate policy as central to Europe’s economic and security future. Dutch Prime Minister Mark Rutte repeatedly warned that climate change is a threat multiplier in NATO and European security discussions about migration, instability, and conflict.

The diversion of precious development dollars to climate mitigation had already begun hollowing out Western aid programs well before Trump’s second term, making recent cuts an acceleration of a trend that saw poor countries’ needs being ignored. These efforts undermined both poverty alleviation efforts and US interests in the developing world without having any appreciable effect on emissions.

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China and Russia filled the void when the US and other Western countries abandoned development finance that involved fossil fuels. Meanwhile, development funding provided by Western nations to address climate shocks was neither new nor particularly effective. Governments of rich countries mostly diverted money from traditional development aid budgets—such as health, education, agriculture, and infrastructure—to meet climate finance pledges.

Research from CARE International suggests that only a small share of climate finance was genuinely “new and additional” beyond longstanding development aid commitments. Countries like France, Germany, the US, and the UK—all top-ten climate funders in absolute terms—provided little to no climate finance that was strongly additional. France and the United States provided no funding above their existing commitment to allocate 0.7 percent of gross national income to development assistance. Germany contributed only about 3 percent in genuinely new funding, while the United Kingdom reached roughly 5 percent.

Some countries performed somewhat better under a less stringent measure of additionality. Germany, for example, disbursed nearly $54 billion above its 2009 level of development finance. France, however, saw little improvement: of the $47 billion in climate finance it disbursed between 2011 and 2020, only $4.8 billion—just over 10 percent—exceeded its 2009 development aid baseline. The United States disbursed $17.8 billion over the same period, with even less new funding provided in the years after the Paris Agreement. In the United Kingdom, the treatment of the 0.5 percent aid-to-GNI target as a fixed spending ceiling meant that climate finance counted as aid came at the expense of traditional development programs.

And to make matters worse, projects were labeled as climate-related despite having tenuous connections to emissions reduction or climate resilience. Projects funded as “climate finance” included airports, hotels, movies, chocolate shops and even commercial investments by private firms.

We don’t know how much development aid was diverted by the World Bank or other development finance institutions to “address” climate change and how many development projects were set aside or modified to meet climate goals. But after a decade of development banks and wealthy countries cannibalizing their own programs in the name of “climate” combined with foreign aid cuts by the U.S. government and other Western countries, the time is right for the World Bank to reject climate targets and reprioritize its efforts and funding on projects with clear economic development benefits for the poor.

With higher fuel and fertilizer prices following the Iran Crisis, the World Bank’s role as a counter-cyclical lender is more important than ever. As natural and manmade shocks increase, it is the poor that suffer the most. Counting climate change dollars is like fiddling while Rome burns. Scrapping the 45 percent target will enable the World Bank to focus on investments in agriculture, energy, and infrastructure, to meet the needs of households and businesses, and help poor countries deliver much-needed services.

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The decline of the steel, aluminum, and other metal industries in the United States and Europe have long been symbolic of the general decay of Western industrial power. Yet recriminations over lost industrial capacity revolve around grand ideas of trade, overregulation, or state planning at the expense of a simpler focus on what actually makes metallurgical plants profitable.

Today, outlets like Bloomberg or the Financial Times regularly rattle off steel and aluminum as among the many strategic markets that Chinese producers now dominate. The widely-discussed new Draghi Report on EU competitiveness highlighted these two energy-intensive industries as examples of sectors where European disadvantages are deepening. Meanwhile, President Trump has famously centered steel, aluminum, and copper in his vision of American reindustrialization, seeking to revitalize U.S. metals production with the help of broad blanket tariffs on imports.

At conferences or in op-eds, western policymakers, think tankers, and business leaders ascribe the lack of new metallurgical plants in their countries and declining metal output to various causes. High labor costs remain a common explanation for manufacturing declines, but in the metallurgical sector labor makes up a tiny fraction of production costs. Other popular diagnoses for the West’s failure include heavy Chinese state subsidies, mercantilist export incentives, differences in energy input and feedstock costs, the succession of newer more efficient production plants, and disparities in environmental, social, and safety standards. These factors all play significant roles in explaining shifts in metal markets since the end of the Cold War, but a crucial reason underlying the lack of new smelter projects in advanced economies remains their high upfront capital costs.

Specifically, the interest repayments on loaned capital required to finance facility design, construction, and startup often weigh heavily on the operating cash flow of new projects, alongside energy and raw material costs. The results of this dynamic speak for themselves. The higher the capital expenditure (CAPEX) per ton of annual metal output, the smaller the share of global production of that metal by advanced economies other than Russia or China (Figure 1).

This observation highlights one of the most powerful industrial policy tools available to governments seeking to drive new innovation and grow market share in CAPEX-heavy sectors: low-cost debt. Public sector support through low-cost debt can correct private sector underinvestment that has otherwise shied away from the lower investment rate of return of higher-CAPEX industrial ventures. Such derisking, in turn, will go a long way towards enabling new breakthroughs that bolster both reindustrialization ambitions and technological progress.

Figure 1: Approximate capital intensity per ton for the production of different metals across various projects, plotted against the current share of global production outside of Russia and China.

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Reduced CAPEX is an investment magnet

Certain commodities stand out in Figure 1 as both particularly capital-intensive and particularly dominated by Chinese producers: titanium, rare earths separation, rare earth metal refining, and battery-grade nickel and cobalt processing. This pattern illustrates the challenge that high-CAPEX production of critical metals faces in free capital markets. These processes, for instance, share a reputation for complex metallurgical flowsheets with temperamental quality control factors, with initial facilities often experiencing cost overruns and requiring lengthy ramp-up periods to reach full production capacity. And while labor may comprise only a minor sliver of operating costs, a safe and better-paid construction sector does drive upfront capital costs upwards, contributing to the CAPEX differential that Western projects face.

Capital markets naturally shy away from such activities. For the same assumed revenue flow, high initial CAPEX already reduces a project’s calculated internal rate of return. Factor in technology and schedule risks, and private investors gravitate instead to competing sectors with lower upfront capital costs and higher returns, posing a consistent, if rational, financial hurdle to critical mineral activities. In effect, high CAPEX has become the price of readmission into strategic industrial capabilities like steel heavy forging, magnesium smelting, and rare earth metal refining.

Modern financial markets typically reward shorter-term investment strategies with faster timelines to payback. Market actors thus possess few incentives to address strategic industrial base inadequacies—certainly not on the urgent timescales relevant to national needs. If countries intend to seriously address critical mineral processing gaps as a strategic vulnerability, they must either govern such industries as state industries, or intervene to offset CAPEX and financing costs to make such sectors more attractive to private market actors. In addition to the political hurdles of creating and maintaining state-run enterprises, there are potential pitfalls of centralized and nationalized production, such as suppressing the yet-high potential for disruptive innovation in critical minerals processing. As such, the policy case for incentivizing private sector redevelopment of strategic industrial capabilities clearly stands out.

When think tank scholars and policymakers warn about the perils of “picking winners” and caution against trying to match Chinese industrial policy dollar-for-dollar, they seem to expect plucky companies to magically compete head-to-head in industrial sectors where production economics are and have always been distorted. Without intervention, the “free market” equilibrium results in the present status quo where the “efficient” level of critical metals production in the United States, Canada, or France is often close to zero. Given atrophied domestic experience in developing greenfield projects, supportive debt financing is arguably necessary to re-enable competition by catalyzing new innovation, rebuilding technical knowledge, and alleviating CAPEX hurdles and production costs.

Assuming that only China is engaging in robust financing support for strategic industries is also committing a strategic oversimplification. Some wealthy Gulf States—a closely-watched emerging hub for mineral processing and heavy industry—provides similar concessional finance, grants and land grants for metallurgical projects, including subsidized natural gas and electricity in Qatar and Saudi Arabia. Many of the Gulf states offer “repayment holidays” for their strategic debt, eliminating a recipient’s obligation to pay interest while their facility is still under construction. Qatar, for instance, offers a 3-year grace period. Put simply, such debt service leniency does excellent things for a project’s internal rate of return.

Even without such repayment schedule tweaks, however, the calculus of low-cost debt is still transformative. Take the case of a new aluminum smelter in Europe or the United States. A capital cost of $8,000/ton of refining capacity and a 10% cost of capital impose $800/ton on the smelter’s cash flow dedicated solely towards paying investors. This may match—or even exceed—the $780/ton spent on electricity (assuming an electricity cost of $60 per megawatt-hour and electricity inputs of 13 MWh/ton of aluminum) and would exceed the roughly $640 of alumina feedstock required to smelt one ton of aluminum. Taken together, interest payments, power, and alumina come out to $2220/ton in total costs. Assuming an optimistic aluminum price of $2500/ton, this leaves a razor thin profit margin before even accounting for costs of labor, carbon anodes, and other site charges. In this case, halving the cost of capital would more than double the plant’s expected operating profit, better fortifying it against aluminum price volatility and making the project infinitely more attractive to private investors.

Figure 2: A simplified high-level annual cash flow for an aluminum smelter assuming a sales price of $2500 per ton of aluminum product, showing how debt repayment weighs upon operating profit margins. This project achieves positive net revenue after 12 years of operation at 5% cost of capital but takes 29 years at 10%.

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A CAPEX fare across the valley of death

High CAPEX also creates a prohibitive environment for industrial innovation. Most startups already struggle to cross a technological “valley of death” that stands between a promising idea or prototype and a mature product ready for commercial deployment. But capital intensity and technical complexity intensify this gauntlet of hurdles to an even more imposing degree for chemical and metallurgical startups. To enable project finance, very expensive pilot and demonstration facilities are often necessary to generate de-risking operational data that benchtop experimentation and computer simulation cannot reproduce.

Other, less capital-intensive sectors enjoy the luxury of moving from idea to product without as much of a CAPEX hurdle. A software or services startup can ship a beta app while a consumer goods entrepreneur might make a prototype. Meanwhile, an early-stage chemical or metallurgical firm constructs a facility half the size of a football field that easily surpasses tens of millions of dollars in upfront CAPEX.

The allure of economies of scale further complicates the industrial “valley of death” and discourages industrial innovation. A company looking to build its first-of-a-kind (FOAK) commercial plant can choose between a small plant or a large plant, navigating tradeoffs between ambition and risk tolerance. The problem with a small, lower-risk plant is that—while it could operate profitably—it is likely to generate lower rates of return. Metallurgical plants and heavy industry benefit from economies of scale, with bigger plants enjoying bigger profit margins. As such, companies are tempted to take on “more than they can chew” and build larger plants that boost rates of return and help justify private investment. This is myopic, as a successful small first plant, even if it only produces 5% returns, substantially eliminates the risk associated with larger plants and thus unlocks many opportunities to build gargantuan plants with enormous margins.

Unfortunately, project financiers typically only care about the investment case in front of them, not hypothetical future opportunities. The practical result is that most developers end up needing to propose billion dollar facilities to advertise attractive rates of return, and then fail to secure financing as the project is judged too large and too risky.

With this in mind, policymakers should essentially think of low-cost, Treasury-rate loans as a necessary component of industrial research and development, just as powerful for this purpose as government grants or tax credits. A policy environment offering sufficiently favorable debt for a project’s CAPEX to enable profitable deployment of a FOAK 2,000 ton-per-year facility instead of a FOAK 200,000 ton-per-year facility is synonymous with a policy environment that can catalyze an enormous surge in industrial metal innovation.

Low-cost loans or investment credits are in turn complemented strongly by policy programs that reduce market uncertainty, like an active strategic reserve program or firm purchasing commitments. Ultimately, it’s all about finance, and large industrial projects face exposure to a number of external risks that deter private capital: construction cost and schedule overruns, permitting compliance, or long lead times for key components. Internal uncertainties like engineering challenges or a lengthy production ramp-up period may also weigh on investor worries. Demand-side tools like offtake agreements augment the lower barrier to entry facilitated by low-cost loans by assuring committed, patient customers, bringing projects to a lower risk threshold, and appealing to private finance.

Hard tech in high-CAPEX sectors—perhaps more aptly termed “heavy tech”—is especially costly and difficult to commercialize. To make progress in building these “heavy tech” sectors requires a favorable policy and market environment that allows new approaches to advance down the cost curve, and one of the best levers governments can wield to this end is financing support that attacks the root obstacle to the early commercialization stage of R&D directly—its high capital costs. Fundamentally, a large institution providing low-cost debt to small first-of-a-kind commercial facilities will greatly accelerate technological development in critical minerals processing and other difficult heavy industry technologies.

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Fixing the CAPEX problem

The United States is already flexing powerful policy levers to spur new projects. The Office of Strategic Capital in the Department of Defense—authorized to commit up to $100 billion in loans for critical minerals projects—is forging ahead with low-interest loans and loan guarantees. The Office of Energy Dominance Financing (EDF) at the Department of Energy—formerly known as the Loans Program Office—possesses $250 billion and $89 billion in loan authority under its Section 1706 and Section 1703 programs among others, although such programs span energy as well as critical minerals priorities. The Export-Import Bank’s Make More in America Initiative can similarly support domestic critical minerals capacity under the U.S. Export-Import Bank’s (EXIM) total $135 billion in financing authority.

However, such programs require long-term certainty to effectively carry out the decade-plus project of reestablishing a resilient U.S. industrial base. Congress should start by rapidly reauthorizing EXIM this year, sending a strong signal to the world that EXIM is a durable instrument of U.S. strategic financing. The Office of Energy Dominance Financing similarly deserves continued support from Congress to maintain its capacity to support innovative critical minerals projects into the early 2030s and beyond.

More ambitious Congressional efforts could revitalize the Section 48C Qualifying Advanced Energy Project Credit, offering a new tranche of competitive investment tax credit opportunities to support industrial base projects that supply critical materials at commercial scale. But above all, policymakers should more intently appreciate the impactfulness of debt financing tools relative to other policy incentives. Recent proposals to expand per-unit production tax credits for battery critical minerals, for example, might yield greater and more lasting results if reimagined as support for low-cost loans available to the same kinds of facilities.

In any event, whether the industry in question is magnesium smelting or nuclear power plant construction, regions like the United States and Europe can no longer afford to continue procrastinating the hard work of relearning how to execute CAPEX-intensive large projects. Across such efforts, governments should maintain focus on the chief goal of debt financing and policies to slash the industrial capital cost burden—lowering the disproportionately higher risk experienced by first-of-a-kind technology deployments and first-in-a-generation domestic projects.

Governments undertaking this challenge should do so with the understanding that their efforts will grow easier over time. In essence, the public sector is covering the upfront costs of retraining the industrial sector’s muscle memory, lowering the CAPEX hurdle and non-financial risks to such a point that projects become more palatable to private finance. In some sectors, low-cost financing or investment tax credits might enable the commercialization of innovative new processes that could flip the global calculus of cost-competitive production entirely. Such industry revolutions are hardly theoretical. New metallurgical processes recently transformed the face of the global nickel market, while a new technique to leach and refine ores directly into metal is now disrupting the copper sector.

Established technologies that benefit from already-developed domestic know-how, like a common copper refining tankhouse or a scrap recycling electric arc furnace, are not the primary target demographic of such financing support. If a project can already acquire loans for the majority of their project capital costs at a 7% to 8% interest rate, then the role of low-cost government loans is minimal. Rather, the objective of government lending should be to enable recipients who might otherwise only be able to secure high interest debt to access debt at much lower cost. Those projects in greatest need of financing support are often precisely those deploying promising new technological approaches, and countries that fail to offer such financing support will concede the potential of today’s yet-theoretical techniques to the countries that do incentivize their development.

The public sector should thus prioritize supply chain gaps where strategic industries either have no choice but to learn and acquire capabilities dominated by adversarial producers, or are hoping to pioneer new paradigm-shifting technologies altogether. The long-term policy philosophy should treat reindustrialization and industrial innovation as two sides of the same coin—inseparable and requiring dedicated policy support focused squarely on the capital cost problem.

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A data spreadsheet documenting the calculations and sources underlying the main figure in this article can be viewed and downloaded HERE.

As Congress revisits permitting reform, proponents are clearing the path of obstacles. Lessons from the demise of the Energy Permitting and Reform Act (EPRA) of 2024 are in the spotlight. A March 2026 piece by the Breakthrough Institute (BTI) argues that EPRA failed in part because some utilities read its transmission provision as a vehicle for “stealth deregulation” of power generation, and warns that the next permitting package will fail the same way unless transmission reform is decoupled from deregulatory efforts. The piece makes two further claims: that deregulation has not delivered on its promises and that mandatory interregional transmission expansion is bad policy.

BTI is right that permitting reform is overdue, that side agendas can derail otherwise valuable proposals, and that the political coalition needed to pass anything is fragile. We share these premises and the urgency behind them. Diverse agendas ranging from reshoring manufacturing to fostering artificial intelligence (AI) development to reducing power sector emissions and enhancing grid reliability all require an ability to get things built.

We disagree, however, that transmission reform is a stealth deregulatory effort and disagree with their characterizations of industry restructuring and interregional transmission. Further, transmission and permitting reform are substantively compatible and politically complementary, as coalitions pairing the two have gained steam over the last three Congresses.

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Stealth Deregulation: A Category Error

BTI’s description of the “stealth deregulation” effect is perplexing. It correctly identifies that greater physical ties between regulated utility regions and deregulated regions would expose “utilities to the argument that lower cost imports should displace new local investment” and that “this would not definitively lead to deregulation.” BTI claims that this would allow ratepayer advocates to make the case for utility trading with external generators and to integrate with competitive markets. This is true and desirable—it results in gains from trade—but this does not equate to generation deregulation. In fact, the wholesale markets in the Midwest, Plains, and those emerging in the West primarily consist of vertically integrated, cost-of-service utilities. Indeed, nearly half of the states in the US’s largest electricity market, PJM, are composed of vertically integrated, cost-of-service utilities. Transmission expansion and better generation coordination in these regions enable rate-regulated monopoly utilities to serve their customers at lower cost.

BTI’s “stealth deregulation” argument frequently treats wholesale market integration and supply deregulation as a single phenomenon. They are not. Supply deregulation, better known as restructuring, refers to reforms that make power generation and retail supply subject to competitive markets. Organized wholesale electricity markets are necessary to facilitate competitive supply, but they can also exist to improve trading between monopoly utilities. Further, even in states where retail supply has not been deregulated, wholesale competition exists with or without organized wholesale markets. Wholesale customers, such as coops and municipalities, are not subject to retail market designs determined by state policymakers, and they and their customers additionally benefit from cost-effective transmission integration.

Such confusion is common. It prompted the R Street Institute’s paper on electric paradigms, which identifies three basic models: traditional monopoly, fully restructured, and the hybrid that most states use—competitive wholesale markets with predominately monopoly generation and retail. For example, the majority of the Southwest Power Pool and Midcontinent Independent System Operator wholesale market footprints are regulated monopoly states totaling half of U.S. states. Western wholesale market expansion, and prospective expansion in the Southeast, are projected to have the same composition. Better transmission ties have value across all three paradigms.

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Eat real food. It’s the closest thing American alternative food politics has to a creed, and for the better part of two decades it belonged to the left. To eat real food was to opt out of industrial agriculture, to refuse the long ingredient list and the seed oils and the corn-fed beef, and in doing so, to register a quiet protest against the system that produced them. It was, we were told, a progressive politics—an alliance of small farmers, conscientious eaters, and environmentalists against the depredations of Big Ag.

That coalition is gone, but the phrase is not. Today “real food” is the rallying cry of the Make America Healthy Again (MAHA) movement, repeated by Calley and Casey Means, endorsed by RFK Jr., and dispensed on Instagram by suburban moms warning each other about Froot Loops and Doritos. The vocabulary has barely changed—wholesome, clean, natural, traditional, ingredients your grandmother would recognize—but the political reality is far from the same.

Into this altered reality, Jan Dutkiewicz and Gabriel Rosenberg released Feed The People: Why Industrial Food Is Good and How to Make it Better, a book-length appeal to the alternative food movement to reconsider their long-running critiques of industrial agriculture. But, while Dutkiewicz and Rosenberg provide a useful new lens to understand the values of industrial food production, they stop short of defending the food system as a whole. Industrial food is good, they proffer, except for the meat and dairy products that remain fundamental to the American farm economy and diets.

While it is abundantly clear that animal agriculture has problems—high emissions compared to other foods, staggering land and water use, and, of course, animal welfare concerns—a defense of industrial food production that does not include industrial meat and dairy production raises a question. If technologically advanced, large-scale, highly capitalized modes of production provide the solutions to the problems caused by agriculture in general, why would these systems not also provide the solutions to the problems caused by animal agriculture in particular?

Dutkiewicz and Rosenberg likely wrote most of Feed the People before the sudden rise of MAHA, which is distinct from foodie environmentalism mostly in its zeal for animal-based protein. That makes their book’s inconsistencies when it comes to meat production all the more glaring. Offering a tractable alternative to anti-industrial foodie politics requires now, more than ever, an embrace of the efficiencies, innovation, and regulatory leverage available only through factory farms.

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Who’s Opposed to Industrial Food?

Make no mistake, Feed the People is an important book. In it, Dutkiewicz and Rosenberg lay out a strong argument for a different approach to the food debate. Their “democratic hedonism” thesis, defined as “an approach to politics that sees moral value in the simple pleasures that people experience in their daily lives” (18), represents a humanist opposition to the ascetic and judgmental moralizing of alternative foodies who preach organic, farm-to-table, and wholesome.

There are, as Feed the People demonstrates, pleasures inherent to the industrial food system. According to Dutkiewicz and Rosenberg, those pleasures—whether from a late-night Waffle House run or a bodega egg sandwich—ought to be defended, and made accessible to all in a fashion that reduces their harm. But the accessibility of those pleasures depends on the large-scale, hyper-efficient food production systems that critics label as “industrial.”

Through this framework, Dutkiewicz and Rosenberg lay out the absurdities of the various arguments against industrial food production. The “family farm” of foodie nostalgia accounts for a vanishingly small share of American agriculture, and the farmers markets that have proliferated in its name feed a narrow, largely affluent slice of the country. A system built on small, local producers simply cannot move enough calories at low enough prices to deliver the pleasures the authors defend. The point is not that we should reluctantly accept fast food and processed snacks as inferior substitutes for “real” or “slow” food; it is that virtually all of our food—fresh broccoli no less than Hostess Cup Cakes —is a product of the industrial food system in the first place.

In this effort, Dutkiewicz and Rosenberg are doing real, important work. The myths proffered by the likes of Wendell Berry, Michael Pollan and Alice Waters, still hold sway over a large swath of the ostensibly progressive population. Debunking the progressive foodie narrative from a progressive, justice-oriented perspective is crucial to reframing the question of the future of food and agriculture for the American left.

But, while anti-industrial faux-progressivism did indeed dominate foodie politics for decades, the movement that Dutkiewicz and Rosenberg have targeted has already lost its influence. Berry, Pollan, and Waters are still wrong, but the energetic core of the anti-industrial food movement has completely migrated right-ward. And so too has the underlying debate.

Progressives can read this migration two ways. The flattering reading is that the food movement has been hijacked. The more correct reading is that food politics was never really progressive in the first place. It was a politics of purity and disgust dressed in progressive clothes, and the clothes have finally come off. MAHA, the manosphere foodies, and the suburban mom alternative eaters did not pervert the once liberal and righteous food movement—they unmasked its immanent conservatism. But, more than anything, the MAHA movement completely changed the food discourse.

As recently as 2024, the debate over industrial food was an intra-progressive argument with broadly shared premises. Everyone at the table—vegans, effective altruists, environmentalists, alternative foodies, food justice folks—agreed that factory farms were bad, that the modern American diet contained too much meat, and that the future, whatever it looked like, would involve eating further down the food chain. The disagreements were about scale, technology, and means: lentils versus cell-cultured beef, smaller dairies or ranches versus veganism. How to solve the “meat problem” was hotly debated, but almost everyone in the alternative food movement agreed it was a problem.

MAHA has rearranged that table. While MAHA glorifies the small, regenerative farmers, few MAHA voices go so far as to directly criticize or target large-scale animal agriculture in their screeds. And, there is little to no acceptance of the idea that eating meat is somehow bad for people, or the environment, let alone, the animals themselves. Instead, MAHA has reshaped American food politics around something a bit harder to quantify: health and nutrition.

No longer made up of coastal-progressives, the anti-industrial food coalition is now a more politically potent alliance of wellness influencers, anti-vaccine activists, libertarian homesteaders, and suburban parents who believe the food system is poisoning their children. Far from agreeing that meat is a fundamental problem that must be solved, many of the MAHA-inflected anti-industrial foodies laud meat—especially beef—and dairy products as the key to American health.

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The Meat Problem

The meat question remains the sub-text underlying most debates around food. This is true for Dutkiewicz and Rosenberg. While Feed the People aims to defend industrial food production, it is assuredly not defending all industrial food production.

As longtime advocates for alternative proteins, Dutkiewicz and Rosenberg made their position on meat eating and production abundantly clear long before they published Feed the People. In venues like The New Republic, Wired, and Vox, the two published many pieces criticizing the meat industry and promoting its alternatives. It’s not surprising, then, that Feed the People, even after defending the varied pleasures of industrial food, provides a critique of both industrial meat production and the bogus claims of regenerative ranching, and other smaller-scale, more “farm-to-table” approaches to animal rearing.

In Feed the People, Dutkiewicz and Rosenberg are explicit that everyone should eat far less meat. They advocate for increasing taxes on meat that would help internalize the external costs of its production, and they promote improved alternative meat sources that would serve as a replacement for industrially produced meats. While they suggest that a “eat less meat, stupid” policy proposal amounts to “meat austerity,” they equate eating meat to “other bad pleasures you may also be loath to lose—booze, risky sex, dangerous sports, gambling” (93). For example, their vision for a healthy, industrial food future would include Waffle House branches with “mycelium-based steak and Impossible burgers for the patty melts,” and no red meat thanks to “improvements to animal-welfare laws and the implementation of carbon taxes on agriculture” (229).

But, meat is simply too popular, and too ubiquitous to actually replace anytime soon with alternatives. While alternative proteins like plant-based and cell-cultured meat may eat into some meat consumption, there is little evidence that it can displace even a small portion of the animal agriculture industry. Unfortunately for its critics, industrial meat production is the only way to produce enough meat and dairy products without accelerating the deforestation of wild lands or driving up food prices. Intensive and confined operations have lower emissions, use less land, and have the potential to improve welfare at a better rate than their organic, regenerative, and extensive alternatives.

Replacing industrially-produced meat and dairy with non-industrially produced meat and dairy would significantly increase land use for agriculture, raise emissions, force the conversion of wild lands into pasture, and increase the price of food. This is not the reality that Dutkiewicz and Rosenberg want—they are especially critical of the regenerative gurus who promise to replace bad factory farms with pastures and grass-fed livestock operations.

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Meating the Moment

And, perhaps more importantly, by criticizing meat production in total, Feed the People cedes the debate to the newly coalesced anti-industrial MAHA foodies. Dutkiewicz and Rosenberg essentially defend industrial food, except for the part of industrial food that is most central to the modern American plate.

For the vast majority of MAHA, meat and dairy products are central to nutrition and health. They advocate for beef tallow instead of seed oils, organ meats instead of vegetables, and ground beef and eggs instead of grains. With few exceptions, much of the cultural and political energy of the new anti-industrial food movement relies on the idea that animal products are vastly healthier than the fibers, sugars, and carbohydrates that purportedly drive inflammation, weight gain, mental disrepair, and all manner of physiological and psychological maladies.

Defending industrial agriculture means defending it against this movement, and convincing at least some of its constituents that industrial agriculture is not the problem. In 2026, that means acknowledging the carnivorous shift in American foodie identity, and attempting to channel that energy towards the most efficient forms of meat and dairy production. MAHA leaders like RFK Jr., Joel Salatin, and the like, may rage against health threats from factory farms, CAFOs, and large-scale dairies, but, for most, industrial animal agriculture is the only source of affordable meat and dairy. Centering a defense of industrial food around an overarching anti-meat politics simply is a non-starter for the vast majority of Americans, and lets the most radical anti-industrial fringe of MAHA control the debate over the future of American food and farming.

Some anti-meat activists and researchers seem to have tacitly understood this dilemma. For example, Coefficient Giving’s Lewis Bollard has, for years, advocated for marginal improvements to animal welfare standards in industrial agriculture. This approach may not save the millions of animals being born and bred to slaughter, but feasible steps to make their lives even just slightly better trump infeasible pathways to end factory farming. This was the central philosophy behind California’s 2018 passage of Proposition 12 to limit extreme confinement of hogs and chicken in gestation crates.

Since passing by referendum, Proposition 12 has been the target of failed lawsuits and campaigns, mainly from the meat industry. Most recently, this opposition took the form of the Save Our Bacon Act, which sought to ban states from imposing animal welfare laws onto meat producers. That bill died in Congress, but was given new life—to the consternation of many—when Republican legislators added the bill text to the pending Farm Bill.

Whether or not Proposition 12 survives the upcoming Senate Farm Bill vote, the effort to ban gestation crates and marginally improve the welfare of the horde of animals going through factory farms demonstrates both opportunities for and limitations to anti-meat politics. While many Americans—and, apparently, the majority of California’s voters in 2018—are appalled by aspects of industrial meat production, few Americans—around 4%, according to Pew—are actually morally opposed to the act of eating meat. If industrial meat is here to stay—whether through incremental steps like banning gestation, or more radical pathways—the only way to improve these modes of production is to embrace them. This would be drawing “democratic hedonism” to its logical conclusion. This is especially the case since both the contemporary supporters and detractors of the industrial food system seem to only agree on one thing: the importance and centrality of meat.

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The Future of Industrial Food Will Include Meat

To be fair to Dutkiewicz and Rosenberg, the rise of MAHA in American food politics happened fast. And the process of writing a book is slow. But while much of Feed the People could not have been written with MAHA in mind, there was little doubt in 2023 or early 2024 that the lodestar of food politics would always be meat.

Feed the People was a project born out of the Pollan-era of anti-industrial food discourse. It speaks to progressive values and finds common ground over things like climate, corporate power, and labor. That posture made sense when the opposition to industrial agriculture was a coalition of progressives who could potentially be persuaded by appeals to “democratizing” pleasures and the reality of environmental impacts. But, it does not make sense today, when that opposition has mutated into a populist movement that has successfully captured state power, rejects basic premises of agricultural science, and wants to dismantle the food system to try to, among other reasons, increase testosterone production in teens.

Dutkiewicz and Rosenberg set out in Feed the People to defend the industrial food system from its progressive critics, and they do so with creativity and empiricism. But, they can not bring themselves to defend the part of the system—meat and dairy—upon which most Americans’ food preferences actually hinge. In doing so, they fall victim to the same kind of moralizing that is central to the critique of industrial agriculture. While the moral center of food politics has shifted from Chez Panisse to the Joe Rogan Experience, the underlying feeling has not changed: disgust at how most people eat.

A defense of industrial food requires a defense of industrial meat and dairy—not as a guilty pleasure to be taxed and surreptitiously abolished, but as one of the greatest achievements of modernity. Industrial animal agriculture feeds hundreds of millions of people affordably and can, with reforms and improvements, be made better still. That is a hard book to write, especially when the authors firmly believe the opposite.

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The long-overdue abandonment of RCP 8.5, the IPCC’s much criticized and implausible emissions scenario has, rightly, shined a light on how climate modeling and emissions scenarios are constructed and used by scientists, policymakers, journalists and advocates. The making of scenario sausage turns out to be a dodgy business, rife with all sorts of unexamined assumptions both within and across scenarios. These, in turn, produce a wide range of highly speculative outcomes that actors across the political spectrum can select from to support their priors.

It should be entirely unsurprising, then, that the abandonment of RCP 8.5 has had little apparent impact on the well rehearsed debates that have raged in the years leading up to the change. Was RCP 8.5 always implausible or was it made implausible by climate policy and falling renewable energy costs? Did scientists really think of and describe it as business as usual or was it always understood to be a worst case thought experiment? If the former, was it an honest misunderstanding or were there strong perverse incentives to represent RCP 8.5 in that way? Does the abandonment of RCP 8.5 suggest that climate change might not be so bad or does 2 or 3C of warming herald catastrophe anyway? Is 5C of warming off the table or are there other plausible ways that the world might hit the extreme warming levels implied by RCP 8.5 even if the RCP 8.5 pathway to those warming levels is not plausible?

The answers to these questions are, in my view, pretty obvious if you don’t have an ax to grind. Yes, RCP 8.5 was always implausible. Yes, many scientists and other experts represented it as business as usual. Yes, there was a lot of confusion and genuine misunderstanding among many scientists who were using RCP 8.5 but also, yes, there were perverse incentives not to ask too many questions about it. No, catastrophe is not assured at 3C of warming but yes, you can still conceivably end up with higher warming by the end of the century if you assume high end climate sensitivity, deep reductions in sulfur dioxide emissions, and climate feedbacks that all impact warming in the same direction.

What almost all of that misses, though, is just how speculative and ungrounded the entire climate scenario enterprise is.

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Can’t Get There From Here

The problem with IPCC scenarios and modeling isn’t just with RCP 8.5. Across the full range of outcomes, many scenarios simply don’t make sense. The low emissions scenarios, for instance, frequently assume low population growth, slow economic growth, and fast technological change. This combination of factors is every bit as implausible as the combination of high population growth, high economic growth, and slow technological change necessary to produce RCP 8.5. That is not simply because the world does not appear to be on either trajectory. Rather, in both cases, the component factors necessary to produce these futures are not compatible with one another.

Consider that the relationship between economic growth and declining fertility is among the most robust in the modernization literature. As societies urbanize, shifting from agrarian economic relations to manufacturing and services, women and families have very strong incentives to have fewer children and direct more household resources towards educating them.

The relationship between the rate of technological change and economic growth, similarly, is not only robust but foundational in the neoclassical economic literature. Technological change accounts for the vast majority of long-term economic growth. High and sustained economic growth rates bring faster rates of technological change along for the ride and vice versa.

Taken together, these two relationships have very significant implications for plausible climate futures. A rich world at the end of this century will almost certainly be a less populous one than a poor world and, of necessity, more technologically advanced. This is not a future where the world digs up every bit of coal that it can find and burns it. The converse is true as well. A poor world will almost certainly be a more populous and less technologically advanced one. This is not a world in which a small and shrinking population lives lightly upon the Earth while making a quick transition to clean energy.

For all the talk of feedbacks in the climate system, we’re not very good at thinking about, much less modeling, feedbacks in our socio-economic systems. That problem becomes even more pronounced once we use emissions scenarios—which estimate emissions and radiative forcing over the course of this century based upon speculative (and sometimes fantastical) socioeconomic trajectories—to model climate impacts on society. Doing so requires making dozens of socioeconomic assumptions to estimate both how evolving socio-economic conditions will translate into global emissions and hence warming, and then how those same evolving conditions will shape vulnerability, resilience, and adaptation to the climate change that results.

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PATPAT Not IPAT

IPAT (Impact = Population X Affluence X Technology) has been the long-standing framework through which environmental scientists have understood how human activity impacted the environment. It provides a useful conceptual framework for decomposing the factors that contribute to environmental impacts. But it has two deep and related flaws.

The first is that population, affluence, and technology operate on both sides of the equation, affecting the consequences of environmental impacts every bit as much as causing them. So IPAT can just as easily be expressed as PATPAT (Population X Affluence X Technology = Population X Affluence X Technology).

The second is that the decomposition breaks down when we try to use the equation, conceptually or practically, to understand change over time. You can decompose an environmental impact into the factors that contribute to it at any given point in time. But over time, the factors don’t move in the same direction and feedback into one another in ways that blur the lines between them. So, in the case of global emissions, population growth and economic growth increase emissions while technological change blunts those factors, decoupling them from emissions. Economic growth and population growth each independently increase emissions. But faster economic growth rates result in slower population growth rates. Technological change accelerates economic growth which in turn slows population growth.

Similar interactions come into play when considering the human and economic impacts of climate change. Economic growth both results in higher economic damages associated with climate extremes and makes human populations more resilient to those extremes. It slows overall population growth and draws larger populations toward economic opportunity in coastal regions and floodplains where they are more exposed to climate risk. Technological change accelerates economic growth, putting more wealth in harm’s way, increases societies’ adaptive capacities, and results in richer societies, which are also more resilient to climate extremes.

The feedbacks fold back upon each other across the emissions and impacts sides of the equation. This is, of course, exactly what you would expect in a complex, emergent system encompassing the physical climate, the global economy, and the intersection of the two in millions of actual places. Emissions scenarios and impacts modeling can only, at best, give us a very high level and rough approximation of what might happen. At the very least, we ought to demand that these efforts make a reasonable effort to check whether the scenarios they are producing are coherent. A rich world in 2100 is very unlikely to be one with 12 or 13 billion people. It will almost certainly not be one that is heavily dependent on coal.

Or consider global agriculture. Any projection of the impact that climate change will have on agricultural production and food security requires dozens of assumptions about both the emissions levels that the global economy will produce decades from now and how population, economic development, food preferences, agricultural technology, and much else will evolve over many decades. Even if that future does bring 5C of warming, that world is also almost certainly one in which the scale, intensification, and productivity of global agriculture is far greater, even if climate change has resulted in some non-trivial reduction in future yield growth. Technological change (e.g. agricultural productivity improvement) operates on both sides of the IPAT equation, both reducing emissions from the agricultural sector and improving the resilience of the sector to climate change.

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Science Fiction Versus Science

Past, of course, is only prologue. Perhaps in the face of a baby bust, nations will increasingly incentivize (or coerce) women to have more children. Or technology will bring us artificial wombs. Or artificial intelligence will bring about an economic singularity without any significant energy technology breakthrough, leading our robot overlords to dig up and burn all the coal. Perhaps a global government managed by a priestly caste of scientists will perfectly redistribute wealth and resource consumption while engineering a planned transition to a low carbon economy. But these developments are, at this point, science fiction, not something that policy-makers or anyone else should take very seriously. Where, one wonders, are the scenarios reflecting the muddle of our present and future—a baby bust, secular stagnation, mixed economies, slow but steady long term decarbonization, and a rising tide that floats all boats but some far more than others?

The problem with the IPCC scenarios can’t be reduced to one bad apple scenario. The construction of scenarios has been ad hoc. Historically, the climate scenario community has sought to produce a range of anthropogenic forcing and temperature outcomes suitable for modeling impacts and then layered on top of that the mental models of the scenario builders (e.g. a rapacious capitalism making babies and burning coal in roughly equal measure vs various post-growth and egalitarian imaginaries).

The resulting scenarios have largely failed to produce plausible futures, meaning futures that can reasonably be extrapolated from the ongoing evolution of social and economic relations as we actually observe them. Worse, it has enabled a cottage climate impacts industry to manufacture sensational climate impact claims that don’t consider those impacts in the social and economic contexts that could conceivably produce them.

I have increasingly come to the view that human societies will be more resilient to climate extremes in a rich world with 5C of warming than a poor world with 2C of warming. But neither of these futures is particularly likely. Because of the way that population, economic growth, and technological change feedback into each other, the range of possible outcomes, and hence the design space for climate policy efforts is far narrower than that. It’s hard to get much beyond 3C of warming or below 2C of warming without the science fiction described above. The greatest failure of the IPCC’s scenario making enterprise has been to obscure this basic dynamic rather than illuminating it.

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As of June 4, 2026, Antares Nuclear’s Mark-0 reactor became the first reactor in the Department of Energy’s Reactor Pilot Program to reach criticality at the Idaho National Laboratory. Antares is one of 11 companies taking part in the Pilot Program.

These reactors are not gigawatt-scale commercial plants, but they are essential first-of-a-kind demonstrations. Done well, the program can generate the data, operating experience, and regulatory lessons that help clear the path for commercial advanced reactor deployment. It fills the gap in the prototyping stage of the innovation cycle—a stage that is crucial for the U.S. to succeed. That Antares has been able to reach criticality a full month before the July 4, 2026 deadline established for the program is a welcome indicator of the program’s potential success.

Why Prototypes Matter

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I’m just back from Japan, where thanks to my hosts at the Canon Institute for Global Studies, I’ve had a chance to talk with former government officials, academics, industry leaders, and energy experts about Japan’s present energy crisis. Caught between Washington and Beijing, Japan’s struggles to reconcile economic imperatives, energy security, and climate commitments over the last fifteen years have prefigured the difficult choices that much of the world faces today in the wake of the Iran war. Japan’s domestic energy endowments are extremely limited. It has no domestic fossil reserves to speak of. Its main islands are mountainous and forested, densely populated, and not particularly sunny. Its coastal waters support a huge fishing industry and are deep and stormy, not well suited to conventional offshore wind. After the Fukushima nuclear accident, it shut down its entire nuclear fleet, which once produced more than a quarter of the nation’s electricity.

As a result, the vast majority of Japan’s energy consumption, almost 80%, is fossil-based and imported, half of that from oil, most of which must transit the Strait of Hormuz. Like a lot of places with the means to do so, Japan is drawing down its strategic petroleum reserves to mitigate the immediate impact of the price shock. But the clock is ticking on Japan’s petroleum reserves. Japan is less dependent on the Gulf for its LNG imports but the general run up in LNG prices is adding to the economic pain.

Most of the alternatives are less than appealing. Japan has substantial headroom to increase coal imports and generation with its existing coal fleet. But doing so would effectively eviscerate Japan’s net-zero Paris commitments. Wind, solar, and batteries offer some fuel-saving opportunities for the electricity system. But Japan’s wind and solar resources are not great, its eastern and western grids operate at different frequency, making a national grid that might help balance variability unfeasible, and, functionally, a rapid shift to renewables simply shifts Japan’s energy sector from one geopolitical risk, namely imported oil and gas, to another, imported Chinese green energy technology.

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Green energy proponents correctly point out that while the energy technology is imported, the wind and the sun are domestic, and free. Once you build a wind or solar farm, it will produce electricity (albeit variably) for several decades no matter what China does. But China is, increasingly, the sole source of most of these technologies and represents Japan’s greatest geopolitical rival and national security threat. Increasing dependence on Chinese green technology undermines Japan’s independent industrial capabilities, its competitiveness across a growing suite of clean technologies, and its ability to act independently of China in other critical geopolitical domains.

And it’s not like the rest of Japan’s energy system at present features domestic energy sources to balance that dependence. Rather, Japan presently takes an all-of-the-above approach to geopolitical risk, importing oil from the Gulf, coal from Australia, gas from Australia, Southeast Asia, and the United States, and green technology from China.

Unsurprisingly given these realities, Japan has finally gotten serious about restarting its nuclear fleet. After a decade plus of haltingly slow approvals, nuclear generation is now back up to over 9% of Japan’s electricity. That’s still a far cry from close to 30% prior to Fukushima. But it seems likely now, given the energy and geopolitical situation, that Japan will restart most of its legacy nuclear fleet in the coming years, as well as complete two long-stalled new builds.

Japan already runs its LNG-fueled gas plants at relatively low capacity. In response to the current crisis, Japan has issued an emergency waiver allowing dirtier sub-critical coal plants to operate at higher capacity factors in order to conserve costly LNG for load following and firming. Should Japan extend that waiver, it will, in deed if not in word, effectively abandon its net-zero aspirations. Doubling down on green energy won’t change that.

Those net-zero commitments, of course, were never plausible in the first place. I’ve traveled to Japan to engage on energy and climate issues for almost 20 years now. At some point during every trip, I am presented with an elaborate slide deck, sometimes from METI, Japan’s famous industrial planning agency, sometimes from an affiliated think tank, showing how Japan will deeply decarbonize and meet its climate commitments. The plans are impressively detailed and technical, with Sankey graphs and flow charts showing technology by technology how Japan will get there, a triumph, on paper at least, of Japan’s legendary industrial planning bureaucracy.

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Over the years, the plans have involved supercritical coal plants with carbon capture, hydrogen-powered vehicles, and now, lots of solar, wind, electric arc furnaces and similar. Ever the uncouth gaijin, I asked my hosts at METI during a visit a few years ago how it was going. They giggled uncomfortably and then, politely, admitted not so well.

And yet, excepting the extraordinary jump in emissions and emissions intensity after the closure of Japan’s nuclear reactors in 2011, Japan’s emissions intensity trajectory looks like pretty much every other advanced industrialized economy. Its total energy consumption is in structural decline and its emissions (again excepting the rebound following the post-Fukushima closures) has been falling consistently for decades. Running its sub-critical coal plants a lot more in the coming years may slow that trend line a bit. Restarting its reactors will accelerate it. If past is prologue, all of these peregrinations over the long term may look like little more than squiggles in a long, linear evolution of Japan’s energy system from oil, coal, and gas toward ever cleaner energy.

How Japan sustains that trajectory remains an open question. It is already the most energy efficient and electrified economy in the world. If the great global dividing line of the post-post-cold war era is petrostates versus electrostates, as a lot of the left-of-center punditry has recently come to believe, then the archetypal electrostate is Japan, not China. Solar now accounts for 10% of Japan’s electricity, quietly exceeding China’s share of solar electricity—a significant (if costly) achievement given Japan’s less than favorable climate and topography. Yet despite early and quite significant efforts to develop a solar manufacturing industry, Japan has virtually entirely ceded the sector to China. Panasonic, a Japanese company, is a major player in global battery production, but less than 20% of its battery manufacturing is domestic.

It will surprise almost no one that the most obvious path for Japan, to my mind, is more nuclear. Japan has deep technical expertise. Other than the unprocessed uranium itself, the nuclear fuel cycle and supply chain have been fully indigenized. Toshiba, Hitachi, and Mitsubishi all have experience designing and building large nuclear reactors. Japan is one of the few nations in the world with facilities capable of fabricating steel pressure vessels for large reactors.

On the flip side, even before the Fukushima accident, Japan had already largely put its formidable nuclear energy capabilities on ice. Its bubble economy burst in the early 1990s, substantially slowing both economic and electricity demand growth. The post-bubble economy also coincided with a sustained period of cheap fossil fuels globally. Japan then shut down its entire nuclear fleet after Fukushima and, until recently, has only slowly restarted those reactors. It also implemented sweeping electricity market liberalization in the years that followed Fukushima, making the institutional conditions even more challenging for new nuclear.

Nonetheless, much of the technical and institutional capacity that would be necessary for a renewed nuclear push remains intact. Japan’s large regional utilities still control roughly 80% of the nation’s generation assets. Public opinion has rebounded since Fukushima. A majority of the Japanese public now supports nuclear energy.

In the face of increasingly dominant competition from China’s industrially planned manufacturing behemoth, Prime Minister Sanae Takaichi’s administration has taken steps to relax rules designed to discourage the old keiretsu system of interlocking shareholders and investments between large industrial firms. This makes it much more plausible that large utilities, national champion industrial firms like Mitsubishi and Toshiba, component suppliers like Japan Steel, and METI might work together to start building new reactors again.

I have been a very vocal advocate of small next-generation reactors and skeptic of large reactors in the context of the US institutional environment and political economy. The utility sector is too decentralized and liberalized. The capacity to cost effectively build large reactors, and large public works projects more generally, has atrophied. The nation is blessed with an abundance of energy resource endowments, from coal, oil, and gas to wind and solar to geothermal resources. Given these realities, the prospects for dedicating sufficient public resources to building large reactors in multiples significant enough to get good at doing it are not good.

Japan, by contrast, is entirely different. Its domestic energy resource options are practically non-existent. In contrast to its financialized US counterparts such as Westinghouse and GE, its legacy industrial consortiums still make stuff and build things. Its utilities are large and well capitalized. Large reactors make a lot of sense for Japan.

For these reasons, nuclear energy is Japan’s way out of the Hobson’s choice between continuing its heavy dependence on imported fossil fuels and mortgaging its energy future to China. It won’t get Japan to net zero emissions over the next several decades but it will assure that the nation is able to continue to decarbonize far into the future without bankrupting its economy or compromising its national security.

The choices faced by Japan are arguably more extreme than most. But as goes Japan, so goes the world. It is among the most modernized and electrified places on the planet. You would be hard pressed to find any nation that has stronger economic and geopolitical incentives to kick the fossil fuel habit. It has no powerful domestic fossil fuel industry determined to foil efforts to decarbonize in the national and public interest. And yet, it has had limited success doing so.

Nuclear energy is not a silver bullet for Japan or anywhere else. But it is a very critical energy technology for the future of the global energy system. In a decarbonized and energy abundant future, nuclear and solar will have to do the heavy lifting. Other primary energy sources and carriers, including storage, wind, and geothermal can play important roles. What Japan shows, though, is that without nuclear, that future will likely be extremely difficult to realize.

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