To slash emissions, states must pass these five policies

Over the past two years, the Biden administration and Congress enacted climate-focused legislation that sets the stage for dramatic emissions reductions and clean industry growth. The Infrastructure Investment and Jobs Act, CHIPS and Science Act, as well as the Inflation Reduction Act, which created hundreds of billions of dollars in incentives, all strengthen clean energy’s economic tailwinds, and if implemented correctly, could catalyze a U.S. manufacturing resurgence. 

But these benefits are not guaranteed. Many utilities have historically failed to incorporate updated cost projections in their planning, risking increased emissions and higher consumer costs. Federal, state and local regulatory barriers also pose a challenge — there are around 7,000 renewable projects waiting to connect to the grid, equal to the current capacity of the entire existing U.S. electricity system, but many will be abandoned due to regulatory delays.  

Federal legislation could address some of these challenges. But the changing of the guard in Congress leaves little common ground for action to advance clean energy in the 118^th Congress, with permitting reform being perhaps the only area for optimism. 

Yet, despite new federal gridlock, clean energy policy was a top priority in the November 2022 elections, which saw the electing of pro-climate candidates in state legislatures and governor’s offices. States like Michigan, Minnesota and Pennsylvania have newly elected members who ran on climate policy as a key plank of their campaign platforms. 

Hundreds of billions in new federal dollars and dozens of new pro-climate state leaders set the stage for 2023 to be defined by bold state climate policy. But a key question still looms: How can states targeting significant emissions cuts actually achieve their climate goals and deliver consumer savings? 

As it turns out, just a handful of policies — five to be exact — can dramatically cut emissions, even across states with vastly different economies. And these policies are especially well-suited to take advantage of Inflation Reduction Act (IRA) incentives to grow economies and cut energy bills. They include clean electricity standards; zero-emissions vehicle standards; clean building equipment standards; industrial emissions standards; as well as rules for methane detection, capture and destruction. 

Energy Innovation and RMI identified these policies using the newly released state Energy Policy Simulators, developed over the last two years. These open-source, free models use publicly available state and federal data to project how hundreds of different clean energy policies can reduce state-level greenhouse gas emissions to 2050 while empowering users to accurately assess the emissions, economic and health impacts of climate policies.  

We evaluated dozens of policies in six states with vastly different emissions compositions. For example, we looked at Louisiana, where two-thirds of emissions come from the industry sector, and Minnesota, where agriculture and building heating are significant sources of emissions. Despite large differences in state economies and emissions sources, the same five policies alone cut emissions anywhere from 50 to 90 percent by 2050. 

The five policies, for the most part, already exist in various states and municipalities, but if applied more broadly and strengthened, they would dramatically reduce emissions across the U.S. economy.  

For example, more than 30 states have clean electricity standards. Just last week, Minnesota passed a law requiring 100 percent clean electricity by 2040, joining nine other states with legally binding 100 percent clean energy laws. 

And last year, California finalized zero-emissions vehicle standards to reach 100 percent zero-emission vehicle sales by 2035, with six other states, including Delaware, Massachusetts, New York, Oregon, Washington and Vermont — together representing one-quarter of the U.S. car market with California — indicating they will adopt California’s rules. Similar standards for trucks, requiring 100 percent sales of clean trucks by 2035 or 2045, depending on the type, are on the books across a half dozen states, including California, Massachusetts, New Jersey, New York, Oregon and Washington. 

These five policies would also generate enormous economic benefits, especially with the IRA now being enacted. Across the six states we evaluated, the policies would create tens or hundreds of thousands of new jobs in 2030 as state economies retool and build out clean energy infrastructure. Similarly, state economies would grow by billions, with most states seeing at least 3 percent GDP growth and up to 7 percent growth per year in 2050.  

Bold climate policies also unlock consumer savings. Lower cost electric vehicles will allow more commuters to power their cars with electricity instead of gas, which costs roughly half as much per mile. Cheaper clean power will lower utility bills, while more efficient appliances offer even greater savings. 

The resulting decrease in fossil fuel consumption would also improve air quality, reducing asthma attacks and other illnesses and preventing thousands of premature deaths. These public health benefits are concentrated in communities of color, as these tend to be where existing polluting infrastructure is often located. 

Passing ambitious climate policy is the best way state lawmakers can realize these benefits and capitalize on the new incentives and funding offered by the Inflation Reduction Act, Infrastructure Investment and Jobs Act, as well as the CHIPS and Science Act. 

These top five policies, targeting the economic sectors with the largest emissions, provide a blueprint for ambitious, cost-effective climate action. They build on decades of policy experience across the U.S. and will deliver enormous health and economic benefits at the same time. The stage is set for a landmark year for state climate policy.  

The only question remaining is: Which states will lead the charge? 

Robbie Orvis is senior director of modeling and analysis at Energy Innovation Policy & Technology LLC.