Red and blue states have big climate plans. The election could upend them

Alex Brown | (TNS) Stateline.org

Pennsylvania wants to remain a manufacturing powerhouse. But state leaders also want to reduce climate change-causing emissions from steel mills and other industrial facilities, while cutting back the toxic pollutants that cause health problems in nearby neighborhoods.

Thanks to a nearly $400 million investment from the federal government, the state is preparing a massive plan to help industrial operators upgrade to new technologies and switch to cleaner fuel sources.

“Pennsylvania was one of the birthplaces of the industrial revolution, and now we’ve been given the opportunity to lead the nation in the industrial decarbonization movement,” said Louie Krak, who is coordinating the plan for the state Department of Environmental Protection.

Leaders in every state in the country have their own big plans. North Carolina and neighboring states are preparing to restore wetlands and conserve natural areas along the Atlantic coast. Iowa leaders intend to plant trees in neighborhoods that lack shade. Local governments in Texas plan to help residents install solar panels on their rooftops. And Utah is readying to purchase electric buses and reduce methane emissions at oil and gas operations.

All of these plans are backed by federal money from the Inflation Reduction Act, the climate law passed by Congress in 2022. But former President Donald Trump, who has called climate change measures a “scam” and vowed to rescind “unspent” funds under the law, could throw much of that work into chaos if he retakes the White House.

Legal experts say Trump couldn’t outright cancel the law without an act of Congress. But climate leaders say a Trump administration could create extra barriers for grant awards, slow the approval of tax credits and delay loan requests. If the federal support becomes unreliable, projects could lose financing from the private sector and cease to be viable.

“Even if the money is technically safe, we would definitely expect to see agencies [in a Trump administration] dragging their feet,” said Rachel Jacobson, lead researcher of state climate policy at the Center on Budget and Policy Priorities, a progressive think tank.

Federal agencies have already announced plans to award $63 billion — mostly in the form of grants — to states, nonprofits and other entities for a host of projects to fight climate change, according to Atlas Public Policy, a climate-focused research group. Many Republican-led states have, for the first time, drafted plans to fight climate change in order to compete for the money.

In addition, the feds are rolling out billions more in loans and tax credits aimed at similar projects. States say the mix of funding sources and financial incentives that will soon be available could supercharge efforts to fight climate change and create green jobs.

Many states whose projects have been approved say they’re urging the feds to issue their funding before the election.

“There’s a risk that an incoming administration could cancel our agreement,” said Krak, adding that Pennsylvania is hoping to finalize its funding award this fall.

Another $30 billion from the law is still up for grabs, much of it aimed at reducing emissions in the agricultural sector. And agencies have just begun offering loans and tax credits to provide hundreds of billions more in financing.

“So many states have climate plans for the first time [because of the federal law],” said Ava Gallo, climate and energy program manager with the National Caucus of Environmental Legislators, a collaborative forum for state lawmakers. “Even states that weren’t supportive of the Inflation Reduction Act are certainly touting these projects.”

State plans

In July, Utah learned that it would be receiving nearly $75 million to carry out its climate plan. The program will pay for electric school and transit buses, help residents purchase electric vehicles and install equipment to reduce methane emissions at oil and gas operations, among many other components.

By 2050, the investments are expected to reduce carbon dioxide emissions by 1.4 million metric tons, said Glade Sowards, who is coordinating the plan for the Utah Department of Environmental Quality. Sowards said the plan was also designed to reduce pollution that harms public health.

North Carolina is focused on protecting natural areas. The state filed a joint plan with Maryland, South Carolina and Virginia that is set to receive $421 million in federal funding. The coalition plans to conserve and restore more than 200,000 acres in coastal areas in the four states. While the natural lands are valuable for pulling carbon from the air, the funding will also help to expand state parks and protect residents from flooding.

Like many of the state projects supported through the climate law, the four-state plan has been announced as a recipient but the funding agreement is still being finalized. State leaders are urging the feds to complete that this fall.

“We want to get this done quickly for two reasons: one, so we can get the work underway, but two, to make sure that the money will be there [before a new administration could threaten it],” said Reid Wilson, secretary of the North Carolina Department of Natural and Cultural Resources.

The federal law also will pay for trees in urban areas, where they can reduce the dangerous “heat island” effect and limit stormwater runoff and air pollution. Iowa earned a pair of grants totaling more than $5 million to increase tree canopy in its cities.

“We’ve never had this level of funding before,” said Emma Hanigan, urban forestry coordinator with the Iowa Department of Natural Resources. “We have a really low canopy cover, one of the lowest in the nation.”

Another nationwide program is set to offer funding in all 50 states to help residents put solar panels on their rooftops or buy into community solar operations. In Texas, a coalition of municipalities and nonprofits, led by Harris County (which includes Houston), earned a nearly $250 million award to carry out that work.

The program will largely focus on disadvantaged communities, with a requirement that solar projects reduce participants’ energy bills by at least 20%. Leaders in Texas expect the investment to reach about 28,000 households.

States are also tasked with distributing rebates to help residents with their home energy needs. Wisconsin was the first state to bring its rebate program online, with $149 million in funding. Residents can receive up to $10,000 to improve insulation, upgrade appliances or install electric heat pumps. Over time, they will see greater savings in the form of lower energy bills.

“It’s nice [for a contractor] to be able to sit at the kitchen table and say, ‘You’re getting $3,000 of work here, but the state is paying $2,800,’” said Joe Pater, director of the Office of Energy Innovation with the Public Service Commission of Wisconsin.

Three other states (Arizona, New Mexico and New York) have rebate programs up and running, and others are finalizing applications. Indiana is among the many states awaiting federal approval to launch its program. The state expects to offer $182 million in rebates starting in early 2025. Greg Cook, communications manager with the Indiana Office of Energy Development, said the state is hoping to execute its plan regardless of the election outcome.

The climate law also has boosted “green banks,” which are state or nonprofit-run institutions that finance climate-friendly projects. The nonprofit Coalition for Green Capital received $5 billion of the federal money, which it will use to build a network that includes a green bank in each state, said Reed Hundt, the group’s CEO.

Michigan Saves, a nonprofit bank, expects to receive $95 million as a sub-award from the coalition. Chanell Scott Contreras, the president and CEO of Michigan Saves, said the “unprecedented” funding will enable the bank to expand its work, which includes helping low-income residents weatherize their homes and financing electric vehicle chargers and solar installations.

Loans and tax credits

The grants given out to states and other entities are just the start. The climate law supersized a federal loan program for clean energy projects, bringing its lending authority to $400 billion. And a new mechanism known as elective pay will now allow states, cities and nonprofits to receive the clean energy tax credits that have long been available to the private sector.

Climate advocates say many of the plans that states are setting in motion rely on the financing and tax rebates — components of the law that are most vulnerable to political interference.

“If an administration wanted to completely thwart the ability of [the Department of Energy] to make those loans, they could do so,” said Annabelle Rosser, a policy analyst with Atlas Public Policy, which has been tracking the rollout of the climate law. “That could be cut off at the knees.”

Meanwhile, many states are relying on the new tax credit to support plans such as electrifying state vehicle fleets and installing solar panels on public schools. In Washington state, for instance, the Office of Financial Management is coordinating a governmentwide effort to ensure state agencies use elective pay to bolster their climate work.

But climate advocates fear that an Internal Revenue Service led by Trump appointees could stall that work.

“There’s a lot of concern about what [Trump] would do with IRS staffing to limit the ability for them to get the refund checks out,” said Jillian Blanchard, director of the climate change and environmental justice program with Lawyers for Good Government, a nonprofit focused on human rights. Such delays could “chill hundreds of thousands of projects,” she said.

“I’m not sure he knows that red states are counting on this money too.”

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