By FREE Staff
Attempts by the federal government to enact meaningful climate policy have often been stifled due to political intransigence and infighting.
A recent phenomenon documented by the Foundation for Renewable Energy & Environment (FREE) research team is the growing hostility by the national Republican party towards climate science and action, with Democratic party efforts failing to push past this opposition.
The gap in climate action has motivated significant state and local climate effort, forming a ‘polycentric layer’ of ambition that is accelerating the United States energy transition. In particular, local governments have taken the lead implementing progressive climate policy that pushes cities and states to reimagine their economies in the era of an energy transition.
Cities and states have introduced everything from aggressive vehicle emission cut mandates to
city-to-city knowledge sharing through coalitions, like the Global Covenant of Mayors for Climate
Now, finally, the federal government is getting involved. The Biden administration passed the
Inflation Reduction Act in August 2022, the biggest piece of climate-fighting legislation in U.S.
history. The law includes billions of dollars for tax incentives, government programs, and other
resources to advance the country’s clean energy transition.
FREE research into the Inflation Reduction Act found that, combined with the previously passed Bipartisan Infrastructure Law, the federal government has announced over $465 billion in clean energy related funding (research soon to be published on freefutures.org/publications). Research estimates suggest that the federal effort will help the U.S. reach its target of cutting its greenhouse gas emissions by 40% below 2005 levels by 2030.
The bill includes a host of possible funding opportunities for states and localities to take
advantage of, such as loans to finance the building of electric distribution, transmission, and
generation facilities, or loans to aid in the production of sustainable aviation fuel.
This financing is meant to spread and strengthen the country’s energy transition, as well as
create jobs and economic growth. Such a strategy also aims to create greater buy-in for the
energy transition by spreading the economic might that the Biden administration says the law
and its many programs will bring.
Observers say that promise is off to a good start. The World Economic Forum found that in the
six months after the law was passed, almost $90 billion dollars had been invested in the
country, creating more than 100,000 jobs. The pace of investment is accelerating as another
study found that, by the time nine months had passed since enactment of the bill, over $150
billion in private clean energy investments have been announced – more than the total private
investment volume in clean energy from 2017- 2021.
The IRA’s investment, funding, and programming brings new opportunities for local and state
governments. Powered with new federal financial and policy support, these locations can create
programs that aid citizens in the fight against climate change.
One of the key ways the law does so is through the $250 billion expansion of the Department of
Energy’s financing authority in its Loan Programs Office. This increase will allow the department
to help states meet their own climate emissions targets and to carry out the goals set by the law.
States will play a key role in the IRA’s implementation by regulating the planning, siting, and
permitting of energy projects, according to a blog post from the Center for American Progress.
The law works to complement existing efforts by cities and states to push their residents and
businesses to implement more progressive climate policies. It includes $4.5 billion for grants
related to the high-efficiency home electric rebate program, as well as $1 billion in the Department of Housing and Urban Development loans for efficiency and resiliency upgrades to affordable housing.
The Biden administration is making it clear it’s ready to aid state-by-state. In Delaware, for
example, it’s offering grants to help the state and local governments implement the latest
building energy codes, which would save the average new homeowner in Delaware 9.8% on
their utility bills.
And at the individual level, the law will help make it more affordable for residents in the state to
install energy-efficient appliances. This includes rebates that cover 50-100% of the cost of
electric appliances such as heat pumps, water heaters, clothes dryers, stoves, and ovens.
In addition, it offers tax credits to cover 30% of the cost to install solar panels on a home.
These types of incentives and financial aid can help local governments to bring progressive
climate policies and ideas to fruition. They also help to bypass the constant infighting between
the national Democratic and Republican parties that has all too often squashed climate policy
By giving local governments more financial capacity to enact their own policies and
programming, it brings change to the community level, where it can be more acutely felt and
quality of life improvements for families can be seen.