Quiet Climate Policy Is Dead. Long Live All of the Above Energy Policy.

How Climate Polarization Swallowed Bipartisan Energy Policy

By Ted Nordhaus and Alex Trembath

Last January, in the Wall Street Journal, we argued that efforts to preserve the whole of the Inflation Reduction Act were both bad policy and politically doomed. Republicans had run against the IRA and needed to cut trillions of dollars to finance the extension of tax cuts established during the first Trump administration. One way or another, they were going to take a pound of flesh and it behooved climate and clean energy advocates to get clear about what in the IRA was worth saving.

We also argued that there was plenty of fat to cut. The vast majority of IRA spending was flowing towards mature technologies—wind, solar, and electric vehicles—that were well established in electricity and automotive markets. Preserving IRA money for these technologies wouldn’t appreciably change their trajectory, or the trajectory of US carbon emissions, which have been falling at a consistent rate for decades.

Rather, the main obstacles to continuing growth of those technologies are not primarily their direct costs, which continue to fall, but a range of well understood challenges associated with integrating these very different technologies into the legacy electricity and transportation sectors—permitting, transmission, and intermittency in the former case, range and charging infrastructure in the latter.

This message was not well received by many climate and clean energy advocates. They believed that the Biden administration’s clever Green Vortex strategy, which overwhelmingly directed clean tech spending toward Republican districts, might insulate wind, solar, and EV tax credits politically and accused us of “negotiating with ourselves.” Forever subsidies for wind, solar, and electric vehicles, moreover, were necessary because the future of the climate hung in the balance.

In reality, we weren’t negotiating with ourselves. We’ve long argued that public subsidies should support early stage commercialization of clean energy technologies and should phase out as those technologies achieve traction in energy and transportation markets. The point of clean tech industrial policy should be to make clean energy cheap in real, unsubsidized terms, not to prop up uncompetitive technologies in perpetuity.

Nor did the fate of the climate, or even US emissions, hang in the balance. Groups like Energy Innovation and Princeton’s Net Zero America that had promoted the legislation produced modeling purporting to show dire consequences if Trump were elected and repealed the IRA. But well before Trump and Republican majorities gutted it, the IRA was underperforming its promised emissions benefits while costing far more than initially estimated. In reality, emissions over the short and medium term were always likely to converge toward the long-term historic US decarbonization rate with or without the IRA. What will matter over the longer term are nascent technologies necessary for further progress: long duration energy storage, advanced nuclear energy, geothermal, and industrial decarbonization.

As it happened, the final package broadly comported with our political analysis. A handful of EV, battery, and solar assembly factories in Republican districts were not going to sidetrack tax, fiscal, and energy policy priorities that were far more important to the Republican coalition. The key fights that were there to be won were to preserve policy support for nuclear, carbon capture, geothermal and other nascent technologies in the face of the opposition from the Freedom Caucus’ fiscal hawks, along with beating back a last minute effort to tax wind and solar energy production.

If it had stopped there, we’d be taking a victory lap today. High-priority programs to promote nuclear, geothermal, energy storage and similar were not only preserved but extended through 2035. The sunsetting of wind and solar subsidies gave Democrats strong incentives to work with Republicans on permitting reform. And there was substantial demand in Congress to develop domestic critical mineral supply chains, and provide sufficient support for the commercialization of next generation nuclear energy technologies.

In place of the Biden administration’s whole of government climate obsession, you could almost convince yourself that federal energy policy was swinging back toward the successful all of the above energy policies that held sway across both the Obama administration and the first Trump administration—to the benefit of both America’s economic performance and its impressive decarbonization over the last two decades.

But, of course, it hasn’t ended there. The Trump administration has now borrowed a page from the Biden playbook, answering Democrats’ punitive approach towards fossil fuel and mining projects by turning the formidable administrative powers of the executive branch against wind and solar energy development. That effort has not only endangered clean energy production that America needs to meet rising demand in the short term, but has also substantially reduced the likelihood that Congress will get very far in efforts to reform permitting and other outdated environmental laws that now stand in the way of energy development of all kinds.

Polarization Trumps Green Pork

The green vortex strategy was, in one sense, an effort to build a durable bipartisan political base for the clean energy economy. By directing enormous public funding for clean energy manufacturing and production toward Republican and right-leaning congressional districts, the idea was that the representatives of these districts would have strong political incentives to support clean energy policies and subsidies whether they were Democrats or Republicans and whichever party controlled Congress and the executive branch. And perhaps, had Kamala Harris squeaked out a victory last November, four more years of public investment in these programs would have proven that strategy out.

But it is also the case that most of these policies already had bipartisan support. A broad swath of Republican politicians had supported tax credits, loan guarantees, ARPA-E, and other policies to support clean energy, electric vehicles, and other clean tech going back to the last years of the George W. Bush administration, including through the first Trump administration. Even as pitched partisan battles over climate science, carbon regulation, and the Paris Agreement intensified, quiet climate policy largely prevailed when it came to energy innovation and investment. But the era of quiet climate policy, it seems, ended with the passage of the IRA, or more precisely, with the fateful determination to enact those policies through a maximalist and entirely partisan budget reconciliation process in the name of historic climate action.

The bet by the Biden administration was that it could use budget reconciliation in the same way that the Obama administration had used the parliamentary procedure to pass the Affordable Care Act. Give the public a valuable benefit and policy-makers would be loath to take it away. Meanwhile, through its implementation, the Administration would use the IRA to make sure that Republican congressional districts benefited from the spending in much the same way that the Pentagon distributed defense production (or pork) widely around the country to assure bipartisan support for defense spending.

But in contrast to the ACA, most households saw little benefit from the IRA. Electricity prices in most places continued to rise and most people remained unconvinced that electric vehicles were a viable option despite the generous subsidies. And while defense spending was broadly supported by both parties in the Cold War era, when the Pentagon built a durable political economy around the military industrial complex, passage of a massive spending package for clean energy on a straight party-line vote in the name of averting a climate apocalypse put a huge partisan target on the IRA and the clean tech economy.

In the age of Donald Trump and an era defined by negative polarization, the results were predictable. Climate polarization swallowed the formerly bipartisan commitments to energy innovation whole, ushering in the fate that we have long warned of: that catastrophism and polarization were a positive feedback loop, imperiling not just conventionally toxic climate policies like carbon taxes and regulations but pragmatic quiet climate policies as well, such as transmission investment, conventional pollution regulations, and energy innovation.

Live By the Electricity Price Sword, Die By the Electricity Price Sword?

In the face of the Trump administration’s full frontal assault on wind and solar, much of the clean energy and climate advocacy community has pivoted, warning today not of looming climate catastrophe but an electricity price apocalypse. For the first time in decades, electricity demand is growing rapidly. Electricity rates are rising around the country. Natural gas production has flatlined. And now, alongside the phase out of subsidies, the Trump administration aims to block the siting of wind and solar projects on public lands and federal waters.

There is a belief among many advocates that Trump and the Republican Party will die by the same electricity price sword that they used so effectively against Biden and the Democratic Party in the last election. The public will blame Trump’s vendetta against wind and solar for the price hike, swinging the mid-term elections to Democrats or, at least, forcing Trump to backtrack in the same way that Biden was forced to reverse course on his administration’s moratorium on oil and gas development on public lands.

This may come to pass. But there are also reasons for skepticism. First, Trump, to a much greater degree than Biden, inherited rising electricity prices. As with the broader issue of inflation, Biden had the bad fortune of taking office just as energy prices were rebounding after the Covid pandemic, a problem that was then made worse by the Russian invasion of Ukraine. Biden’s various energy policies were not the main event in the run up of energy prices. But in the context of a lot of other things that were out of his control, policies that seemingly contributed to the problem were bound to get an outsized share of the blame.

Second, it is not yet clear that Trump’s moves against renewable energy will be as politically salient as Biden’s moves against oil and gas. Gasoline prices typically set the template for public perception of energy prices more broadly and Trump has been extremely proactive about encouraging Saudi Arabia and other global producers to increase production, even though this has disadvantaged US oil and gas production.

As a result, while electricity prices are rising, gasoline prices are not. So it is not at all clear either that higher electricity prices will stoke public concern about Trump’s energy policies absent an increase in gasoline prices or that the voters or the public will so easily be convinced to accept a connection between Trump' s assault on wind and solar and electricity prices as they were to accept that Biden’s early moves against fossil fuels were responsible for high gas prices specifically and rising energy prices more generally. Indeed, recent polling suggests that voters are more likely to blame corporations and state governments than the Trump Administration for rising electricity prices.

Finally, the narrative that Democrats and clean energy advocates have begun to tell, about the cancellation of wind and solar projects causing rising electricity prices, is complicated by the widespread perception that wind and solar are responsible for high electricity prices in California and other blue states. This claim is highly contested. Clean energy advocates point to trends in wholesale electricity prices, for instance, which don’t show a strong correlation with renewable energy penetration.

But whether high retail electricity prices are the result of the costs of transmission, distribution, and other measures necessary to integrate variable renewable generation into electrical grids, wildfires, or just the “blue state model” more broadly, the fact remains that many of the highest profile Democrat-run states, including New York, California, Pennsylvania, New Jersey, and Massachusetts feature very high electricity prices. This problem is further exacerbated by what has, to date, been Exhibit A in the effort to blame Trump for high electricity prices, which is the repeal of IRA subsidies for wind and solar, which undermines the claim that these electricity sources are cheap, not expensive.

In short, while the Trump administration’s energy agenda may not prove a recipe for either energy abundance or energy dominance, it is not clear that Trump or Republicans will pay a particularly high political price for it, particularly given how polarized the politics of energy, not just climate, has become.

Electricity Prices Are Too Damn High

Beyond the dueling claims about who is responsible for high electricity prices, what is clear is that energy price, reliability, and security are now the coin of the realm. The decade-long effort to center climate in US energy policy is over.

Yet neither fossil energy-focused Republicans nor renewable energy-focused Democrats are likely to make much headway on electricity prices in the short term. US natural gas production was already at record levels in the last years of the Biden administration. Gas production is expected to tick up a bit more this year but won’t grow remotely fast enough to keep up with demand growth.

Wind and solar, meanwhile, were not coming to the rescue of electricity ratepayers even if Kamala Harris were president and the IRA had not been repealed. Solar generation was growing rapidly even before the passage of the IRA and most current projections foresee strong continuing growth despite the phaseout of subsidies. Wind energy deployment, by contrast, was already flagging, due to rising commodity prices and exorbitant costs for off-shore projects even before the Trump administration’s recent moves against off-shore wind and the repeal of the IRA’s subsidies. Had Harris won the 2024 election instead of Trump, electricity prices would be rising just as rapidly and Republicans would be blaming the IRA for today’s electricity prices, just as they were before the election.

Pitched political battles over electricity generation, moreover, don’t address the source of much of the increase in retail electricity prices. Rather, a substantial portion is associated with the cost of transmission and distribution, which in many places has been rising faster than the cost of wholesale electricity generation.

The costs of maintaining and expanding transmission and distribution owes to many factors, including grid hardening in the face of extreme weather and rising commodity prices, as well as the costs of integrating geographically diffuse intermittent electricity generators like wind and solar. But it is also in significant part an unintended consequence of the effort to restructure and liberalize electricity markets.

Electricity market liberalization has allowed for competitive electricity generation markets and has been good for both the natural gas and wind and solar industries. But it also, by design, pushed utilities out of the electricity generation business. As a result, most utilities around the country now make their money through transmission and distribution, where they still maintain their regulated monopoly status and are still granted a guaranteed profit on top of the cost of building and maintaining transmission and distribution infrastructure.

Unsurprisingly, this has incentivized utilities to build and upgrade a lot more transmission and distribution infrastructure, and those are the costs that in most of the country are rising fastest. Worse, the institutional capacity to plan and coordinate investment for affordability, reliability, and decarbonization has been deeply compromised by a utility landscape that was already highly decentralized, by the many Rube Golbergesque variations of electricity market liberalization, and by the transformation of federal and state energy policy into culture war objects.

Wicked Electricity

Last spring, Alex declared the era of the climate hawk over, noting that none of the conditions that had allowed climate advocates to believe that climate change could be established as a durable priority for US policymakers over the decade or so before the COVID pandemic any longer obtained. Post-Covid budget deficits, supply chain challenges, and inflation had brought an end to the low interest rates and expansionary fiscal policy that had underwritten public clean energy investments over the previous decade. The post-COVID recovery and huge new demand from data centers reversed a generation of slow energy demand growth, putting upward pressure on electricity prices and making policy tradeoffs between energy costs and clean energy and climate objectives even more toxic politically than they already were. Perhaps most importantly, the election of Donald Trump had put to rest the notion that inexorable demographic trends would allow for sustained Democratic majorities which would prioritize climate policy at the federal level.

This shift appears unlikely to be temporary. Democrats might take back the House or even the Senate in the midterm elections and perhaps they will retake the presidency in 2028. But high interest rates and budget deficits are likely to be with us for a long time. So are high electricity prices. Despite America’s remarkable innovation capacities and energy resource endowments, we do not have the right mix of technologies nor the institutional arrangements nor the political leadership to solve the electricity problem anytime soon.

This will create possibilities for some clean energy technologies. Higher prices and supply constraints are good news for anyone who can get so-called “clean firm” generation technologies commercialized, sited, and built at a competitive price, whether that is advanced nuclear, enhanced geothermal, natural gas with carbon removal, or solar with long-duration battery storage. But the balkanized utility landscape, liberalized electricity markets, and diversity of rent-seeking interests competing for a share of the electricity generation and distribution pie make neither more centralized and rationalized planning of the electricity system nor truly competitive and efficient market based solutions particularly feasible.

We have long written about the wicked nature of climate change, which suffers not merely from polarization but rampant solution-based problem definition, policy-based evidence making, and arbitrary boundary setting. “The expert is also the player in a political game, seeking to promote his private vision of goodness over others,” as Horst Rittel and Melvin Webber, the UC Berkeley urban planning professors who first applied the idea of wickedness to policy debates, wrote over 50 years ago. “What comprises problem-solution for one is problem-generation for another.”

America’s electricity landscape is now wicked. The sheer number of conflicting economic and ideological interests make electricity cost and reliability a problem to be managed, not solved. Electricity costs are increasingly salient at a moment when cost of living concerns remain high and yet are not salient enough to discipline political actors and policy making in a nation in which a highly polarized public and even more polarized opinion elites are mostly rich enough to ignore cost of living concerns when they conflict with their ideological priors.

While there is no solving the problem, there are problems to solve. The electricity price crisis is the result of multiple causes, including generation and supply shortfalls; permitting, transmission and interconnection bottlenecks; wildfire mitigation, particularly in the west; and kludgy regulatory and market restructuring that simultaneously socializes the costs of goldplated infrastructure, subsidizes high-volume customers, and simulates competitive generation markets.

Solutions to these problems will look different in liberalized versus traditionally regulated utility markets. They will also look different in different parts of the country. Solutions that work in Texas, with abundant wind, solar, and natural gas resources competing in the most liberalized electricity market in the nation will not look the same as North Carolina or Florida, where vertically integrated monopoly utilities still lean heavily on nuclear and coal, or the Tennessee Valley, where TVA operates a publicly owned system powered predominantly with nuclear and natural gas.

For these reasons, as a matter of both policy and political communication, all-of-the-above energy policy remains both the most robust approach to the wicked and highly differentiated nature of America’s electricity system and, demonstrably, the best political approach. Neither Bill McKibben’s solar liberation nor Trump’s fossil-heavy energy dominance agenda are plausible alternatives.

Back to an All of the Above Future

Democrats and clean energy advocates still have a lot of unlearning to do. We were both struck during our week in DC for Abundance 2025 how hard it was for even moderate, Abundance-pilled Democratic politicians, despite the determination to pivot to electricity cost, to talk about energy and electricity without talking about climate change. They would start off on their talking points, about AI and data centers, the need for more renewable energy and President Trump’s anti-abundance assault on wind and solar, and then they’d veer back to talking about climate change and decarbonization.

This was, perhaps, by design—based on the perception that they still need to signal to environmentalists that they care deeply about climate change. But if so, it is a poor design. When Democrats and clean energy advocates extoll the benefits of renewable energy to keep electricity costs under control, their supporters already know that they care about climate change. By contrast, when they muddle their energy affordability message with talk about climate change and emissions, they end up signalling to everyone else that what they really care about is climate change, not electricity costs.

Climate advocates, for their part, do their partners in the Democratic Party no favors by rebranding conventional green policies as an “energy affordability” strategy. A policy agenda that supports residential rooftop solar while opposing fossil fuel drilling and pipelines will strike voters as an agenda to keep energy prices high, because that’s what it is, notwithstanding talking points about shielding ratepayers from fuel price volatility and promises of solar energy too cheap to meter.

Trump and Republicans may face similar problems by the time the 2026 or 2028 elections come along. But removing subsidies, as they did in the Big Beautiful bill, likely won’t have the same political valence as the Biden Administration’s sweeping gestures towards fossil fuel abolition. That said, blocking wind, solar, and transmission development on public lands may undermine public support for the Trump Administration's energy dominance agenda.

Ultimately, whoever controls the affordability debate is likely to have the upper hand. For Democrats, environmentalists, and clean energy advocates, this represents a “who moved my cheese” moment, where not just talking points and arguments will need to change but the entire basis of clean energy advocacy. Policies to “keep it in the ground” are dead and aren’t coming back. The conflation of policies to make clean energy cheap with perpetual subsidies for renewable energy has polarized opinion toward what were once popular technologies and undermined claims that these technologies are cheap and hold the key to lower electricity prices. Hardest of all, clean energy advocates, not just Democrats, will need to learn to talk about the benefits that fossil fuels bring to America’s energy and electricity systems, even as they advocate for diversifying away from them.

This will seem new to many. But it is not so new for an older generation of Democrats and environmentalists. It is the language and agenda of the Clinton and Obama administrations, from before the time that the climate hawks seized control of the Democratic Party. It is still the most popular and durable approach to energy affordability and decarbonization, and holds the key to restoring credibility on the energy issue for both Democrats and clean energy advocates.

Quiet climate policy is dead. But all-of-the-above energy policy can rise again.