Illustration by Alex Nabaum
This article appears as part of a special issue of The American Prospect magazine on state policy divergence and aggression. Subscribe here.
The energy sector has largely avoided the vicious public rancor that defines high-profile issues, from immigration to reproductive rights. But the collective action warranted by this planetary catastrophe has been slow to materialize across all 50 states. In most cases, Americans know what to do—decarbonize, harness renewables, deliver advanced infrastructure upgrades, and much more.
But these responses aren’t happening fast enough. As the parting of the ways between red and blue lawmakers on energy policies intensifies, the resulting intrastate disputes compromise goals that affect the entire country, endanger the lives of millions of people, and provide the incredible scenes of Republican lawmakers publicly celebrating the arrival of federal dollars for state climate and energy projects, while doubling down on trying to undo the very laws that make their press conferences and groundbreakings possible.
The resistance to curbing carbon dioxide emissions through a national cap-and-trade program is still mired in partisan arm wrestling over whether the planet is actually in peril or the fossil fuel companies are. And unfortunately for the planet and its inhabitants, the greenhouse gases from fossil fuels burned in Oklahoma or Wyoming don’t stay in Oklahoma and Wyoming: They affect all Americans, and all citizens of the world.
FEDERAL INACTION ON GREENHOUSE GAS EMISSIONS has convinced a collection of mostly blue states—Maine, New Hampshire, Vermont, Massachusetts, Rhode Island, Connecticut, New York, New Jersey, Pennsylvania, Delaware, and Maryland—to achieve CO2 emission reductions in the electric power sector through the Regional Greenhouse Gas Initiative (RGGI). Launched in 2009, it is one of the most successful climate programs in American history.
RGGI is a mandatory cap-and-trade program for fossil fuel power plants. Participating states price power-sector emissions to compel utilities to come up with strategies to lower their emissions and keep them under a regional cap. States in the program have decreased emissions by nearly 50 percent (compared to 22 percent in nonregulated states), and have used the revenues from the allowances to fund a variety of clean-energy, resilience, and energy efficiency programs, among others.
While Eastern states were signing up to join RGGI, a bipartisan group of Midwest governors launched the Midwestern Greenhouse Gas Reduction Accord in 2007, which they envisioned as the first step toward a regional cap-and-trade program. It dissolved three years later, due, in part, to the first gasp of right-wing reactionism, the Tea Party movement. Republican attorneys general have also developed a coordinated strategy designed to undermine progress in other areas, such as taking aim at environmentally friendly corporate environmental, social, and governance (ESG) programs (Robert Kuttner analyzes the ESG battle in this special issue). But Republican politicians in purple states along the East Coast have turned to other strategies to thwart RGGI’s expansion.
In their public messaging, opponents argue that the program constitutes an illegal tax. It’s a gambit that RGGI opponents have tried before. A 2013 challenge to New York’s participation in RGGI, Thrun v. Cuomo, rested partially on an illegal tax argument. Former New Jersey Gov. Chris Christie, a Republican, had made the same claim in 2011, when he plucked New Jersey out of the pact. The state rejoined RGGI under Gov. Phil Murphy, a Democrat, nine years later.
Pennsylvania is technically a member of RGGI, though its participation has been paused pending the outcome of litigation over former Democratic Gov. Tom Wolf’s 2020 decision to join by executive order. The state’s Commonwealth Court determined that participation in RGGI was, in part, an unconstitutional usurpation of the General Assembly’s authority to tax.
Gov. Josh Shapiro, Wolf’s Democratic successor, convened an RGGI Working Group of environmental, consumer, industry, and labor stakeholders to pore over Pennsylvania’s energy policies. “While we didn’t reach perfect consensus,” says Jackson Morris, who directs state power-sector policy at the Natural Resources Defense Council and was a co-chair of the working group, “we did reach consensus that if we’re going to reduce emissions from the power sector in Pennsylvania, that a cap-and-invest structure is the best way to do it.”
Shapiro has appealed the lower-court ruling to the state supreme court. But even if Pennsylvania prevails, Shapiro, a once and future presidential aspirant, has already hedged his bets with his own proposal, the Pennsylvania Climate Emissions Reduction Act (PACER), which would pull the state out of RGGI.
Shapiro may hope to appeal to local Republicans with his state-centric plan. But Republicans in the legislature, who control the state Senate by six seats—and the legislature may remain closely divided after November—aren’t buying the governor’s reasoning. They insist that a cap-and-trade program is still a tax that would endanger the state’s coal-fueled power plants and raise costs for ratepayers. If the Pennsylvania Supreme Court rules in favor of the environmental groups, Pennsylvania returns to RGGI. But whether Pennsylvania stays in or bows out is anybody’s guess.
In 2020, the Virginia General Assembly voted to join RGGI. “RGGI gives you those guardrails and that certainty to just make sure your power sector stays on track, and it raises hundreds of millions of dollars to benefit your residents of your state,” says Morris. “It’s not as if Virginia has a huge fossil fuel industry at this point, either.”
Red-state obstructionism runs hot until there’s federal money on the table: Then it’s all puppies and kittens.
But when Republican Glenn Youngkin moved into the governor’s mansion a year later, he maneuvered to pull Virginia out. By 2023, he succeeded. In May, state lawmakers failed to agree on returning to the program and sacrificed it in order to pass the state budget. Environmental groups filed a lawsuit, which is now before the Virginia state supreme court; it hinges on whether the governor had the ultimate authority to withdraw from the program.
“As it’s been designed, [RGGI] is flexible enough to allow states to enter and exit as situations changed in those jurisdictions,” says Phelps Turner, a senior attorney with the Conservation Law Foundation Maine. “Obviously, it’s not ideal to have states entering and exiting on a regular basis, but there’s flexibility—the program can continue with or without any individual state.”
But after Virginia exited RGGI, it didn’t take long for the damage to appear. Emissions jumped and the revenues from the sale of allowances evaporated, sending state flood resilience programs in places like coastal Hampton Roads and residential energy efficiency plans for low-income ratepayers off to search for new funding. Another benefit lost: keeping down emissions from Northern Virginia’s data center market, the world’s largest, as it expands. “To stay on track to carbon neutrality,” attorney Ivy Main, a local environmental advocate, wrote in a Virginia Mercury opinion column, one option is having “data centers pay their own way, both literally and carbon-wise.”
If Republicans in Pennsylvania and Virginia have succeeded in slowing down progress on greenhouse gas emission reductions, North Carolina Republicans, who have a supermajority in both chambers of the state legislature, have blocked it. In 2023, state lawmakers voted to prohibit state agencies and the governor from mandating that public utilities join cap-and-trade frameworks or participate in frameworks that require expenditures on carbon allowances.
Two blue states have shown more interstate climate leadership, and it’s no surprise that the heavy hitter is California, the second-highest carbon-producing state in the country. In 2011, California launched the Western Climate Initiative, a multi-sector cap-and-trade program and the fourth-largest globally, along with Quebec. In March, Washington state announced its interest in joining the framework, which goes beyond fossil fuel power plants to include industrial plants and fuel distributors.
However, like Pennsylvania and Virginia, Washington’s participation is a question mark. This time, the deciders are voters, courtesy of a ballot question funded by Brian Heywood, a conservative hedge fund manager (who has funded five other November ballot questions). The referendum would repeal legislation that required Washington to investigate links with other cap-and-trade programs like California’s. Heywood calls cap-and-trade programs “a regressive tax.”
WHILE THE RGGI STATES AND CALIFORNIA have taken major steps to reduce their carbon footprint, Texas is the runaway leader in carbon emissions—and the biggest source of emissions is the Electric Reliability Council of Texas (ERCOT), the Texas electric grid. But cutting carbon emissions in the Texas power sector has taken a back seat to ensuring that the power actually stays on.
Many Texans steer clear of linking weather extremes to climate change, but just about everyone has views on extreme weather and ERCOT. “Now we’re talking about surviving floods and preparing ourselves for worse droughts, and we’re talking about people’s family members and neighbors that died in freezes,” says Rep. Greg Casar (D-TX). “So, it’s much less theoretical now.”
The severe 2021 winter storm that knocked out power for nearly three weeks killed 210 people, and led to as many as 700 indirect deaths. The summer of 2023 was second only to 2011 as the hottest summer on record: The threat of rolling blackouts did not materialize, but the system teetered close enough to the edge on September 6 when ERCOT officials declared an energy emergency.
Texas is an extreme outlier, even among red states: Every other state in the Lower 48, whether red or blue, obtains electricity through the two major power grids, the Eastern and Western Interconnections. But Texas has its own grid. For decades, ERCOT has walled itself off from the rest of the country to evade Federal Energy Regulatory Commission (FERC) regulations that apply to interstate electricity transmission.
So when electricity demand spikes on the grid, which covers 75 percent of the state’s land and 90 percent of its electric load, ERCOT can’t access enough emergency power from grids in neighboring regions. What has made the situation worse for the average Texan is that El Paso, sections of East Texas, and most of the Panhandle, which have connections to electric grids beyond the state’s borders, have power during ERCOT blackouts.
Texas has made tremendous progress in diversifying its electricity resources beyond oil and natural gas. The state is the largest wind producer in the country and the second-largest in solar, and it plans to build 35 more gigawatts of clean energy over the next 18 months, exceeding the total of the next nine states—combined. Systems that incorporate renewable energy into their generation strategies between regions provide consumers with access to energy at lower costs. But even though Texas has an abundance of renewable energy, only about 30 percent of its power comes from clean sources, compared to 50 percent in California. Canary Media estimates that Texas’s grid emits more carbon than the national average.
ERCOT can implement changes, such as laying new transmission lines, faster than it could if FERC were involved, according to Doug Lewin, a state energy consultant who publishes The Texas Energy and Power Newsletter. But linking to the national grid could also help Texas export power, particularly clean power, to other states. “That would be economically important for the state, and it could help us meet our climate goals nationwide,” says Casar, who has introduced a long-odds proposal to connect Texas.
REGINALD MATHALONE/AP PHOTO
ERCOT transmission lines in Sugar Land, Texas
As the climate crisis forces the country to come to terms with its archaic electric grid, some 30 million people in Texas have been left out of proposals like the BIG WIRES Act, which puts FERC at the core of interregional transmission plans that would modernize capacity for regional power transfers. “If you have a Texas-shaped doughnut hole in your national strategy, that’s going to be a problem,” says Casar, who as an Austin city councilor spent time during the 2021 crisis handing out blankets to residents. When the freshman lawmaker got to Capitol Hill, he expected to find a bill that would address the ERCOT problem. It didn’t exist.
Casar introduced his Connect the Grid Act bill in February. The bill would mandate connecting ERCOT with regional transmission organizations, bring Texas under FERC’s jurisdiction, and study interconnections with Mexico. An MIT evaluation of the legislation concluded that ERCOT would see increases in its annual costs (through investments in wind), but also increases in revenues as a clean-energy exporter, and reductions in emissions. Most importantly, as high as 80 percent of households could avoid outages in a 2021-type storm. “Clearly, they are giving up reliability for not interconnecting,” says MIT’s Christopher Knittel, one of the authors of the study.
ERCOT does rely on small interconnections, two with the Eastern grid and two with Mexico. But the more powerful connections that would improve reliability would lead to FERC oversight. In 1976, one power utility in West Texas tripped that wire and connected to Oklahoma in the early-morning hours, an episode known as the Midnight Connection. When other utilities found out, they ordered their plants to disconnect. After the public utilities commission shut it down, a state court backed them up.
Would Texas lawmakers give in after new crises? “If you’re talking about complete integration, like east-west [interconnections] and ERCOT, where there is no more ERCOT market, it’s all mixed together and now everything’s FERC jurisdiction?” says Lewin. “There’s pretty widespread opposition to that.”
ERCOT needs some backup. The Southern Spirit Transmission project would provide ERCOT with up to 3,000 megawatts of power through a transmission line from the Texas border through northern Louisiana and Mississippi to connect with the southeastern grid run by the Midcontinent Independent System Operator (MISO), which serves 15 central states and Manitoba. The project, which got a dispensation from FERC that did not compromise ERCOT’s status, did raise the hackles of the energy behemoth Entergy, which serves the two states. Louisiana has approved the project, but Mississippi lawmakers have taken up the Entergy refrain that the connection would increase prices for state consumers.
Texas isn’t doing nothing. For example, the Texas Commission on Environmental Quality has created a greenhouse gas inventory and reduction plan. But the turn to natural gas is a worrisome development, as is the state’s interest in moving federal emissions dollars to highway construction. The blue-state moves are significant, to be sure, but one red state’s countermoves are serious obstacles to real progress.
Red-state rhetoric and obstructionism runs hot when it comes to “illegal taxes” and keeping the feds out of red-state business. But when federal money is on the table, it’s all puppies and kittens. Republican states lined up for the Infrastructure Investment and Jobs Act’s about $65 billion in clean-energy and power funds: Seven of the top ten beneficiaries were red states, with Wyoming first and Texas second in the queue.
Not a single Republican voted for the Inflation Reduction Act, the largest climate and energy package in American history. Republican congressional districts, however, reeled in about $107 billion for 201 projects. South Carolina took home the largest red-state award, $14.5 billion for 27 projects creating nearly14,000 jobs. Taken together, the IIJA and the IRA are the starkest examples of willful indifference to the climate crisis and its ramifications for electricity consumption. Republicans aren’t done yet: They have voted more than 50 times to repeal the IRA in part or in its entirety.
Red states appear determined to revel in these dark arts of divide-and-conquer politics—at least until the climate crisis intensifies to the point of such intense and cascading natural or human-generated catastrophes, or both, that red-state lawmakers will have little choice but to bow to public demands for constructive action to simply survive.
