Why Credit Access Makes or Breaks Clean Tech Adoption and What Policy Makers Can Do About It

For clean energy to reach everyone, government can’t just regulate behavior. It has to actively shape credit markets in partnership with the private sector.

Implications for democratic governance:

Capacity needs:

Access to affordable credit is a necessary condition for an equitable energy transition and an inclusive economy. Markets naturally concentrate capital where risk is low and returns are predictable, leaving low-income communities, rural areas, and smaller projects behind. Well-designed federal policy can change that dynamic by shaping markets—reducing risk, creating incentives, and unlocking private capital so clean technologies reach everyone, everywhere. This paper explores how policy-enabled finance must be part of the toolkit if we are going to drive widespread adoption of clean technologies, and can be summarized as follows: 

The critical role of policy-enabled finance to drive widespread economic opportunity  

Access to affordable credit is not just a financial tool—it is a cornerstone of economic opportunity. It enables families to buy homes, entrepreneurs to launch businesses, and communities to invest in technologies that reduce costs and improve quality of life. Yet, across the United States, access to credit remains deeply uneven. Nearly one in five Americans and entire regions – particularly rural and Tribal communities – are excluded from the financial mainstream, limiting their ability to thrive.

Private-sector financial institutions—banks, private equity firms, and other lenders—are designed to maximize profit. They concentrate on markets where risk is predictable, transaction costs are low, and deals are easy to close. This business model leaves behind borrowers and communities that fall outside these parameters. Without intervention, capital flows toward the familiar and away from the places that need it most.

Public policy can change this dynamic. By creating incentives or mitigating risk, policy can make lending to or investing in underserved markets viable and attractive. These interventions are not distortions — they are strategic investments that unlock economic potential where the market alone cannot, generating economic value and vitality for the direct recipients while yielding positive externalities and public benefit for local communities. And, importantly, these policy interventions act as a critical complement to regulation. Increasing access to credit is often the carrot that can be paired with, or precede, a regulatory stick so that people are not only led to a particular economic intervention, but they are also incentivized and enabled.  

For decades, policy-enabled finance has delivered measurable impact through multiple programs and agencies designed to support local financial institutions – regulated and unregulated, depository and non-depository – that are built to drive economic mobility and local growth. These policies and programs have taken multiple forms, but can generally be put in three categories: 

These tools enjoy broad recognition and bipartisan support because they work. They increase access, availability, and affordability of credit—fueling job creation, housing stability, and economic resilience. Policy-enabled finance is not charity; it is a proven strategy for broad and inclusive economic growth and a key tool for the policy-maker toolkit to support capital investment, project development, and adoption of beneficial technologies in a market-driven context that can increase the effectiveness of a regulatory agenda. 

Most importantly, policy-enabled finance has led to major improvements in wealth-building and quality of life for millions of Americans. The 30-year mortgage was created by the Federal Housing Administration in the 1930s as a response to the Great Depression. Before this intervention, only the very wealthy could afford to buy a home given the high downpayment requirements and short-term loans. Since this policy change, thousands of financial institutions have offered long-term mortgages to millions of Americans who have bought homes that provide safety and security for their families, strong communities, and an opportunity to build wealth through appreciating assets. Broad home ownership is a public good, but until the government created the right policy and regulatory framework for the markets, it was out of reach for the majority of Americans. 

Similarly, the Small Business Administration’s loan guarantee programs started in the 1950s supported financial institutions, including banks and non-bank lenders, in extending credit to small businesses that would otherwise be difficult to serve with affordable credit. These programs have collectively helped millions of small businesses access the credit they need to grow their businesses, create wealth for themselves and their families, provide critical goods and services in their communities, and create a diverse and vibrant local tax base. 

The financial markets, without these types of interventions, are not structured to prioritize access and affordability. Well-designed policy and complementary regulatory interventions have been proven to drive different behaviors in the capital markets that yield real benefits for American families and businesses.  

The role of access to credit in driving an equitable energy transition 

The public and private sectors have spent decades and billions of dollars investing in the development of clean technologies that reduce greenhouse gas emissions, create economic benefits, and deliver a better customer experience. Now that these technologies exist, the challenge is to deploy them for everyone, everywhere. 

The barrier to widespread deployment is that most clean technologies require an upfront investment to yield long-term benefits and savings (i.e., an initial capital expense to reduce ongoing operational expenses) – technologies like solar and battery storage, electric vehicles, electric HVAC and appliances, etc. – which means that people and companies with cash or access to credit are adopting these better technologies while those without access to cash or credit are being left behind. This is yielding an even greater divide – creating economic savings, health benefits, and better technologies for those who can afford them, while leaving dirty, volatile, and increasingly expensive energy sources for the lowest-income communities. 

Many of the federal policy interventions to support deployment of these new technologies to date have been through tax credits. These policies have been very popular, but are not often widely adopted, particularly in rural and lower-income communities, because, (a) they are complex, (b) they often require working with individuals or businesses with large tax liabilities, and (c) they typically come with high transaction costs, making smaller, more distributed projects harder to make work. The energy transition is a huge wave of change, but it is made up of many small component parts – individual buildings, machines, vehicles, grids – so if our policies fail to enable small projects to get done, we will fail to transition quickly and equitably.

To deploy everywhere, households and businesses need credit to offset capital expenses. To expand access to credit, we need supportive clean energy policies that work within and alongside local financial services ecosystems – just like we’ve seen with housing and small businesses. 

Regulation is insufficient to drive widespread adoption 

Pursuing a carbon-free economy is a massive undertaking and, understandably, much of the state and federal government’s toolkit has focused on regulation of people and businesses to drive behavior change – policies like fuel economy standards, pollution restrictions, renewable energy standards, and electrification mandates. This is an important piece of the puzzle – but insufficient to drive broad (and willing) adoption. 

Take, for example, the goal of electrifying heavy-duty trucks in and around port communities. States like California have attempted to set a date at which all new trucks on the registry must be zero-emissions vehicles. Predictably, this mandate was met with a lot of pushback from truck drivers, small operators, and industry associations who struggled to see a path to complying with this regulation without a major increase in cost. 

It wasn’t until the regulation was paired with direct incentives for truck purchases and an attractive and feasible financing package for vehicle acquisition and charging infrastructure that the industry actors started to come around. This has helped change behavior of both buyers and incumbent sellers in the market. 

Policy-enabled finance creates tools – often used in conjunction with other policy mechanisms – that can more effectively meet people where they are with affordable, appropriate, and tailored solutions and can help demonstrate a feasible path to adoption that can help buyers and sellers in these markets adapt accordingly. 

The Greenhouse Gas Reduction Fund as an innovative policy-enabled finance program 

The Greenhouse Gas Reduction Fund (GGRF) is more than an emissions initiative—it is a strategic investment in economic equity and market innovation that took lessons in program design from many sectors and programs of the past. Designed with three core objectives, the program aims to:

GGRF programs, including the National Clean Investment Fund, the Clean Communities Investment Accelerator, and Solar for All, were built to complement other Inflation Reduction Act (IRA) programs by occupying a critical middle ground between grant programs and tax credits. Grant programs provide direct, one-time support for projects and programs that are not financeable (i.e., not generating revenue). Tax credits are put into the market to incentivize private investment for anyone interested in taking advantage but are not typically targeted to any specific project or population. 

GGRF bridges these approaches. It channels capital into markets where funding does not naturally flow in the form of loans and investments, ensuring that clean energy and climate solutions reach every community—but does so in a way that often extends the benefits of the tax credits and incentive programs so that they reach a broader set of projects and communities where the incentive is insufficient to drive adoption. GGRF focuses on increasing access to credit and investment in places that traditional finance overlooks by reducing risk and creating scalable financing structures, empowering local lenders, community organizations, and national financing hubs to deploy resources where they are needed most. Also, because the program makes loans and investments, it recycles capital continuously – akin to a revolving loan fund – so that the work filling gaps in market adoption can continue for decades. 

GGRF’s design was built on a strong foundation of successful direct investment programs for local lenders, such as CDFI Fund awards and USDA programs. What makes it unique is its scale—tens of billions of dollars—and its centralized approach, leveraging national financing hubs to drive systemic change with and through new and existing local financial capillaries (i.e., credit unions, community banks, green banks, and loan funds). This program was not built to drive incremental progress; it is a market-shaping intervention designed to accelerate the clean energy transition while promoting widespread economic growth.

Unfortunately, the program was stopped in its tracks when the Trump administration illegally froze funds already disbursed to awardees, leading to multiple lawsuits to restore funding. Without this disruption, awardees and their partners across the country would be driving direct economic benefits for families and communities across all 50 states. In the first six months of the program, awardees had pipelines of projects and investments that were projected to create over 49,000 jobs, drive $866 million in local economic benefits, save families and businesses $2.7 billion in energy costs, and leverage nearly $17 billion in private capital. The intention and mechanics of the program were working – and working fast – to deliver direct economic, health and environmental benefits for millions of Americans.  

Moving at the speed of trust: Bringing the public and private sectors together for effective implementation 

For a program like the Greenhouse Gas Reduction Fund to succeed, both the private and public sectors need clarity, confidence and accountability. But most importantly, they need a baseline of trust between the parties to support ongoing creative problem solving to implement a new, scaled program with exciting promise and a limited blueprint. 

For the private sector, certainty is paramount. Investors and lenders (and importantly, their lawyers) require clear definitions, consistent requirements, and transparency about the availability of funds, requirements of use, and the ability to forward commit capital to projects and businesses. They need mechanisms to leverage public dollars with private capital and assurances that counterparties will be shielded from political, compliance, and policy risk. Flexibility is equally critical, allowing actors to adapt to rapid market shifts and technological innovations without being constrained by rigid program structures. Understanding these requirements – and the needs of the financial market actors involved – is outside the comfort zone of most government agencies and employees and requires significant experience and capacity building to strengthen this muscle. Nimble thinking is not often associated with government agencies, but in policy-driven financial services, it is paramount. 

At the same time, the public sector has its own requirements which require patience and understanding from the private sector. Policymakers and the EPA, the implementing agency of the GGRF, must ensure that funds are used properly and that Congressional and public oversight is robust. This means designing programs that comply with all laws and regulations while advancing policy priorities. It requires mechanisms for accountability—certifications, reporting, and transparency in how funds flow – along with safeguards against undue influence from purely profit-motivated private actors. Balancing these needs is not optional when managing taxpayer funds; it is the foundation for building trust and ensuring that the program delivers on its promise of reducing emissions, benefiting communities, and transforming markets. 

Implementation requires striking the balance between the needs of the private and public actors; this was difficult and time consuming for both the federal employees and for us as private recipients. There was pressure to deploy quickly to demonstrate impact and the value of the program, but it took a long time to get contracts signed and funds in the market because of the many requirements of the public and private parties involved. We speak different languages, are solving for different constraints, and work in drastically different environments – all which led to complexity and delays. 

Internal EPA requirements and federal crosscutters (i.e., federal requirements from other related laws that applied to this program) increased time to market and transaction costs. Many of these requirements came with high-level policy objectives without the ability to get to a level of detail required for capital deployment. 

For example, two of the major policy crosscutters were the Davis Bacon and Related Acts (DBRA) requirements around labor and workforce, and the Build America Buy America (BABA) requirements for equipment manufacturing and component parts. While the agency and private awardees were aligned at a high level on policy intention – good-paying jobs and domestically-manufactured goods – down streaming these requirements to borrowers and projects required significantly more detail and nuance than was available to the agency, adding weeks and months onto implementation and frustration among private counterparties. 

Clear expectations up front on how to manage the trade-offs – policy priorities versus capital deployment – could have helped create a high-level framework for implementation, which was a one-by-one review of use cases to determine feasibility and applicability. This added complexity and friction to the process without driving outsized results. 

More requirements and complexity led to slower, more costly deployment, which meant fewer communities would benefit from the program’s goals of cutting emissions, creating jobs, and cutting household and business costs. 

Another key feature of the program for the National Clean Investment Fund and Clean Communities Investment Accelerator was the ability for the federal government to leverage a Financial Agent to administer the funds. This arrangement was developed between the EPA and Treasury, leveraging a long-standing practice of the Treasury Department of contracting with external banks to provide financial services that were hard for the government to provide directly. This was particularly important for the National Clean Investment Fund program because the disbursement of funds into awardee accounts enabled the awardees to meet a core statutory requirement to leverage funds with private capital. Without this function, the cash would not be available on the balance sheet of the awardees and would be difficult to leverage with private investment. 

Lastly, the reporting requirements for the program were complex, making it hard to provide clarity on what data collection was required for early transactions. Again, both parties recognized the importance of transparent data collection and dissemination but implementing that intent in practice was time consuming. A simple, standardized framework to get started that could evolve over time would have helped reduce uncertainty and supported faster deployment. 

Altogether, the cross-sector translation – finding common ground between two disparate worlds – added many months onto the process of getting the program to the market which, in the current political climate, was time not spent doing the important work to educate a broad set of stakeholders on the program’s promise, potential, and purpose. A lot of this complexity could have been reduced by developing a baseline of trust between the parties through the application and award process, complemented by a common goal to improve program implementation over time. 

Strange bedfellows create weak alliances 

In addition to the programmatic elements of translation, the actors involved in implementing direct investment strategies tend to be unknown entities to government agencies and Congress. Even though many of the implementing organizations – the “awardees” – have been around for decades doing similar work, there were weak ties with Congress, federal agencies, and other related stakeholders. Similarly, there was a lack of understanding of the role that nonprofit and community-based financial organizations play in addressing market gaps. This mutual lack of understanding and engagement leaves room for misunderstanding, distrust or generalizations that can hinder the ability to make collective progress. 

Within the agency, this was a new program type for the EPA, so requirements and design process took many months before anything was shared publicly. The Notice of Funding Opportunity was released nearly a year after the legislation was signed. 

The unique form and function of the program and limited direct engagement with lawmakers and other stakeholders about the program left a vacuum of information, which led to skepticism and confusion. Because the funds were provided to awardees as grants, many interpreted this as just another grant program – a large federal spending package that would lead to “handouts” – instead of what it was, the federal government seeding a sustainable fund with “equity” that would be lent out, returned, and reinvested in perpetuity. For example, here is the Wall Street Journal editorial page,and later, the EPA press release conflating investments with “handouts”: 

“Imagine if Republicans gave the Trump Administration tens of billions of dollars to dole out to right-wing groups to sprinkle around to favored businesses. That’s what Democrats did in the Inflation Reduction Act (IRA). The Trump team’s effort to break up this spending racket has led to a court brawl, which could be educational.”

The fact that this policy structure and the private sector entities charged with implementing it were relative strangers led to confusion and delay during a period that could have been spent on outreach, engagement, and education. Without that broad base of support, the program unnecessarily became a political punching bag.

To mitigate this risk going forward, there needs to be greater investment in relationship building, education, stakeholder engagement and capacity building within and among the implementing partners across all relevant government actors and their private sector counterparts, especially after award selections are made. This connective tissue would go a long way in creating a baseline of common understanding of the policy objectives, program design, and implementation partners involved so all parties are aligned on strategic intent and path forward. 

Making policy-enabled finance programs work in the future 

If we agree that policy-enabled finance is essential to drive the energy transition and deliver broad benefits, the next step is asking the right questions about how to design these interventions for success, drawing lessons from the GGRF and other related programs.

First, what mechanisms should we use, and what are the trade-offs for each? Federally supported direct investment programs, such as managed funds, can deploy capital quickly and target underserved markets, but they require strong governance, thoughtful program design, and radical transparency, otherwise they are susceptible to the “slush fund” narrative or similar risks (i.e. conflicts of interest and political favors). 

Tax credits and incentives have proven effective in attracting private investment, yet they often favor actors with existing tax liability and can leave smaller players behind. Guarantees reduce risk for lenders and unlock private capital, but they demand careful structuring to avoid moral hazard and can struggle to reach communities that are truly under-resourced. 

Despite the many pitfalls of direct investment programs, they address a challenge that has plagued many of the more distributed policies: centralization and market making. Often in an attempt to let a thousand flowers bloom, policymakers underestimate the need for centralized or regional infrastructure to help with asset aggregation, data collection, product standardization, and scaled capital access. This yields local infrastructure that is sub-scale, inefficient, and unable to access the capital markets for private leverage – too small to truly shape markets.

While the GGRF’s future is uncertain given pending litigation, its purpose and role as a set of centralized financial institutions within the broader community-based financial ecosystem is critical – and needs to be more broadly understood as policymakers set future priorities. 

Second, should government manage funds and programs internally or partner with external experts? Internal management within an agency offers control and accountability but can strain agency capacity and impede the ability to be an active market participant. It is also difficult to attract the right talent within the government’s pay scale, leading to an inability to recruit and high turnover. This model has been attempted through programs like the Department of Energy’s Loan Programs Office (LPO), but even that market-based program has been slower to execute, delaying critical infrastructure and technology investments by months, if not years.   

On the other hand, external management brings specialized expertise and market agility, yet it raises questions about oversight and influence. No matter who the private party is, there is skepticism around the use of funds, their personal or professional gain, and their intentions with taxpayer money. In our deeply politicized world, this puts a target on the leaders of these organizations that may limit who is willing to play this role. 

Quasi-public Structures

Despite the challenges, on balance it seems that internal agency management or a quasi-public structure is the most feasible path. Internal management pushes the boundaries of public agency function but goes a long way to build trust and accountability. Quasi-public structures seem to be a good compromise when feasible. Other countries have figured out how to manage these programs within a government or quasi-government agency (see the Clean Energy Finance Corporation and Reconstruction Finance Corporation, both in Australia). We can too. 

At the federal level, credit programs should be managed by agencies with the skills and capacities to hold an investment function, like the Department of Energy or the Treasury Department, and leverage lessons learned from programs like DOE’s LPO and EPA’s GGRF to structure new entities. Or – like many of the state and local green banks have done – create quasi-public entities that have public sector governance and appropriations but otherwise operate independently as financial institutions with their own balance sheets, bonding authority, and staffing structure. 

Lastly, if public-private partnerships are preferred, who should the government work with to implement policies meant to expand access to capital and credit? Nonprofit financial institutions often prioritize mission, community impact and are willing to arrange complex financings that require a higher touch approach but often lack scale and institutional capital access. For-profit firms bring scale and expertise but often find it hard to manage a government program with a mindset or culture that differs from their typical profit-maximization frameworks. 

Depository institutions such as banks offer stability and regulatory oversight, whereas non-depositories can innovate more freely to reach the hardest to serve communities. Regulated entities provide robust and trusted infrastructure and controls, but unregulated actors may move faster and can be more creative in supporting traditionally under-resourced opportunities. Specialty firms bring deep sector or asset-class knowledge, while generalists offer broad reach and experience in managing across asset classes. 

To identify the optimal path, it is helpful to look to existing programs for lessons. The U.S. Treasury’s Emergency Capital Investment Program (ECIP) demonstrates how direct investment into regulated depository institutions can mobilize significant capital for underserved communities through an existing financial ecosystem. The Loan Programs Office shows what internal management can achieve for large-scale projects. Tax credit programs like the New Markets Tax Credit (NMTC) and Investment Tax Credit (ITC)/Production Tax Credit (PTC) illustrate how incentives can transform markets, while guarantee programs such as the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI) Fund Bond Guarantee and SBA 7(a) and 504 guarantees highlight the power of risk mitigation in activating and standardizing products to support secondary market access. These precedents offer valuable insights as we design future policies to accelerate a broadly beneficial energy transition.

Educating policymakers to build trust in the community finance ecosystem

Regardless of path forward, one thing remains critical – building better relationships between policymakers and the community finance industry, including community banks, credit unions, loan funds, and green banks. These are the boots-on-the-ground organizations that share a mission with many policymakers to expand economic opportunity and broaden access to capital and credit. And they are often the organizations navigating multiple public products and programs to bring affordable, quality financial services to communities. 

The challenge is that most advocacy and educational work for these organizations has been siloed – there are groups representing credit unions big and small, those representing housing lenders, loan funds, green banks, and community banks. The disaggregation of these efforts has diluted the potential for policymakers to look at this ecosystem as a whole to determine how best to leverage it for public good. This is not to say that each of these individual groups does not have a role to play for their members – they all have different needs and requirements and deserve representation. But the broader industry would benefit from collaboration across these organizations to create a mechanism for these institutions to help with outreach, advocacy and education around policy-enabled finance overall. This would bring a strong and powerful group of actors together for a higher collective purpose and, ideally, create a large and diverse constituency with common goals. 

State and local governments stepping up  

In the near-term, the absence of federal support for clean technology deployment through policy-enabled finance creates an enormous opportunity for state and local governments to step up and push forward. Hundreds of local financial institutions were doing work to prepare for the delivery of GGRF funds to and through local projects and businesses to drive broader adoption of clean technologies. These organizations continue to have the skillsets, capacity, and pipeline to finance these projects – but need access to flexible and affordable capital to do so. 

State funding efforts could mirror the program and product design of the GGRF to get deals done locally, working with one or more of the constellation of financial institutions preparing to deploy federal funds. Just because the GGRF’s programs were cut short, it doesn’t mean that the infrastructure and learnings generated should go to waste – if there are public institutions willing to commit capital, there should be many financial institutions across the country ready to put it to good use. 

Conclusion 

If our shared goal is an equitable, rapid energy transition, policy must do more than regulate — it must enable finance and focus on deployment, or getting great projects done. The Greenhouse Gas Reduction Fund showed both the promise and the pitfalls of large-scale, policy-enabled finance: when designed and governed well, these tools can unlock private capital, deliver measurable local benefits, and sustain long-term market transformation. When implementation gaps and weak relationships persist, even well-intentioned programs become politically vulnerable and ripe for attack. To make these programs successful within our current political context, future efforts should prioritize clear governance, cross-sector capacity, and sustained stakeholder engagement so public dollars can catalyze private investment that reaches every community. 

Policy-enabled finance snapshot (illustrative, not exhaustive)

ProgramDirectTax IncentiveGuaranteeFederal agencyImplementing entit(ies)
CDFI Fund Financial Assistance ProgramXTreasuryCertified nonprofit loan funds
Emergency Capital Investment ProgramXTreasuryCommunity banks and credit unions
Opportunity ZonesXTreasuryPrivate funds and other financial intermediaries
Low-income Housing Tax Credit (LIHTC) ProgramXIRS, State Housing Finance AgenciesPrivate housing developers, lenders and syndicators
New Markets Tax Credit (NMTC) ProgramXTreasuryPrivate Community Development Entities (CDEs)
Investment and Production Tax Credit (ITC/PTC) ProgramXTreasuryPrivate developers, investors, and syndicators
USDA Business and Industry Loan GuaranteeXUSDABanks, credit unions, and farm credit lenders
USDA Single Family Loan GuaranteeXUSDAPrivate mortgage originators
SBA Loan Guarantees (7a, 504, etc.)XSBABank and non-bank private business lenders
DOE Loan Programs Office Guarantee ProgramXDepartment of EnergyDOE direct to companies, alongside private lenders and investors
CDFI Fund Bond Guarantee ProgramXTreasuryCertified Community Development Financial Institutions (CDFIs)
Greenhouse Gas Reduction Fund National Clean Investment Fund and Clean Communities Investment AcceleratorXEPANational nonprofit specialty finance organizations in partnership with local lenders (community banks, credit unions, green banks, and loan funds)

FAS Launches New “Center for Regulatory Ingenuity” to Modernize American Governance, Drive Durable Climate Progress

WASHINGTON, D.C. — February 12, 2026 — The Federation of American Scientists (FAS) today announced the launch of the Center for Regulatory Ingenuity, a new hub designed to reimagine how the government tackles “wicked” modern problems while delivering everyday benefits for Americans.

“We can’t manage today’s problems with yesterday’s laws,” said Dr. Jedidah Isler, FAS Chief Science Officer. “The Center for Regulatory Ingenuity will bridge the gap between high-level policy design and on-the-ground implementation, ensuring that government promises translate into real-world results that Americans experience.”

FAS is launching the Center for Regulatory Ingenuity (CRI) to build a new, transpartisan vision of government that works – that has the capacity to achieve ambitious goals while adeptly responding to people’s basic needs. CRI does this by (1) creating high-trust environments to brainstorm and refine the big ideas that will breathe new life into government, and (2) building a “network of networks” that supports policymakers and practitioners in implementing those ideas at scale.

“The administrative state has delivered extraordinary achievements in the past, but today’s operating model is a complete mismatch for the complexity we face. As a result, trust in government has been in the basement for decades,” said Loren DeJonge Schulman, Director of Government Capacity at FAS. “Strengthening government capacity is an investment in democracy and deeply intertwined with climate progress. It requires thinking creatively about how to build the government we need, not endlessly pointing fingers at the government we have–CRI aims to do just that.”

CRI is launching with a focus on climate: a space where there’s an increasingly evident mismatch between the functions the government needs to provide and the tools it has to deliver. FAS is pleased to welcome Climate Group North America, ICLEI USA, and the Environmental Law Institute as core partners in this initial work.

“Today’s rollback of the endangerment finding underscores that we are in a new era for U.S. climate policy,” said Dr. Hannah Safford, Associate Director of Climate and Environment at FAS. “To be clear: there’s no credible scientific basis for that rollback, which FAS strongly opposes. At the same time, it’s worth recognizing that while foundational environmental laws like the Clean Air Act worked to curb industrial pollution, they weren’t designed to guide the economy-wide transition to clean technologies that’s currently underway. There’s tremendous opportunity for innovation on how we design and deliver climate policies that are equitable, efficient, effective, and durable. With EPA stepping back on this front, it’s time for others to step forward.“

With the support of contributors from across the ideological spectrum, CRI is already charting paths for a renewed administrative state, a more responsive government, and ambitious climate policy that lasts. These paths are explored in CRI’s inaugural essay collection, Bureaucracy as Social Hope: An Argument for Renewing the Administrative State. The first two of these essays, “Rebuilding Environmental Governance: Understanding the Foundations”, by Jordan Diamond and collaborators at the Environmental Law Institute, and “Costs Come First in a Reset Climate Agenda”, by Devin Hartman (R Street Institute) and Neel Brown (Progressive Policy Institute) are available now; the remainder will be released in coming weeks. Other authors featured in the collection include:

In addition, CRI is today releasing “From Ambition to Action: Shovel-Ready Policy Solutions for Climate Leaders”. This policy primer, crowd-sourced from dozens of experts and policy entrepreneurs, outlines how motivated public leaders – especially at the state and local level – can turn big ideas into reality, cutting emissions while delivering cheaper electricity, ensuring affordable housing, and improving transportation for all of America.

Moving forward, CRI intends to deliver more detailed playbooks illustrating how an approach grounded in regulatory ingenuity can improve outcomes and achieve goals in these key sectors, which collectively account for two-thirds of U.S. emissions and contribute at least 25% of U.S GDP. 

More information about CRI is available here. For updates, and to stay connected, click here. 



ABOUT FAS

The Federation of American Scientists (FAS) works to advance progress on a broad suite of contemporary issues where science, technology, and innovation policy can deliver transformative impact, and seeks to ensure that scientific and technical expertise have a seat at the policymaking table. Established in 1945 by scientists in response to the atomic bomb, FAS continues to bring scientific rigor and analysis to address national challenges. More information about FAS work at fas.org.

Media Contact: Katie McCaskey, kmccaskey@fas.org, (202) 933-8857

From Ambition to Action: A Policy Primer

How public leaders can boost climate progress, restore trust in government, and make lives better…starting today.

People across the nation are clamoring for solutions that make their lives better. And they’re frustrated by the responses they’re getting. Confronting massive inequality, Americans watch leaders finger-point on the price of eggs; yearning for security and stability, Americans watch politics lurch between radically different agendas. No wonder, then, that public trust in the U.S. government has been in the basement for decades. Americans are facing both everyday challenges and a deep, growing sense of discontent. But they’ve lost faith in government to resolve either.

That sense of stuckness doesn’t need to last. But change means focusing on outcomes, eliminating bottlenecks, and prioritizing delivery. It means embracing tools and talent that better connect big ideas to real-world results. It means resisting the temptation to chase buzzwords – from “abundance” to “dominance” to “affordability” – and focusing on the method over the message.

One place to start is with the shift to clean technologies, a place where there is powerful momentum. One in five cars globally are already electric, while heat pumps have outsold gas furnaces in the United States for four consecutive years. The vast bulk of new energy generation is renewable: globally, clean energy investment is now double the amount spent on all fossil fuels combined.

While the transition to clean technologies is unstoppably underway, it is also in its messy middle. Rival technologies and energy systems (and the economic and political systems on which they depend) are now colliding. Many counties and cities depend heavily on fossil fuel revenues; meanwhile, job quality and union density in the renewable energy industry leaves much to be desired. And core parts of our infrastructure – from the power grid to gas stations – are complex and expensive to convert to serve renewable and clean industries, even if those industries will ultimately boost affordability.

Put simply, remaining globally competitive on critical clean technologies requires far more than pointing out that individual electric cars and rooftop solar panels might produce consumer savings. But we also can’t afford to cede the space. Internationally, clean energy spending is booming. China’s clean energy industry by itself would be the world’s eighth largest economy if it were a country, and Europe’s investments have almost doubled over the last decade. Even if current estimates hold, fossil fuel demand will peak mid-century. If the U.S. continues to hold fast to existing policies until then, we’ll be 30 years behind the rest of the world’s energy economy, and it will be impossible to catch up. The bottom line? Good climate policy is good economic policy, and vice versa.

Good climate policy is also good politics. Climate-induced disasters are increasing by the day, and are impacting both safety and affordability. Americans generally see climate and energy policy as important as immigration. Most Americans, on both sides of the political aisle, support environmental regulations and clean energy development. Many say electricity costs are just as stressful as grocery bills, and they worry about higher insurance rates and local market problems. And they’re tired of entrenched corporate interests calling the shots.

What’s needed are creative, clever strategies that boost climate progress while delivering everyday benefits. The Federation of American Scientists (FAS), as part of our new Center for Regulatory Ingenuity (CRI), developed this primer to put a bunch of those strategies in one place. Our goal is for this primer to serve as a resource for public-sector leaders at the federal, state, and local levels who believe that government can do great things for our communities and our planet.

The strategies herein are open-sourced from a diverse network of contributors and collaborators, and are shovel-ready. Many of these strategies are already being deployed across the country. They’re designed to make energy, housing, and transportation better this year.

Indeed, we hope that readers see the actionability of these solutions not just as a benefit, but as an imperative. Americans aren’t looking for the magic message or the magic moment. They’re looking to government for leadership. Every day that government is paralyzed by gridlock, indecisiveness, or fear of failure is another day that it fails to realize the potential of the good that it can achieve, and that public trust in government further erodes. That’s a downwards spiral that we’ve got to stop.

Finally, we emphasize that this primer is a starting place. We’re at the precipice of a new era for climate and energy policy in the United States, and the strategies that will form the backbone of this new era – by adeptly fitting together government capacity, private innovation, and democratic decision-making – are just starting to come into view. As they do, CRI and its partners are committed to working hand-in-glove with bold doers and thinkers, sharpening our collective focus, and realizing the vision of a more responsive government, more optimistic society, and more resilient nation.

Getting to Work: Opportunities in Energy, Transportation, and Housing

Solving problems requires framing them accurately. As observed above, the truth is that clean technologies are increasingly dominant, and that the United States is rapidly falling behind. A response predicated on propping up the 20th-century fossil economy is doomed to fail. So too, we’ve learned, is a response that relies on the U.S. federal government to muscle the clean-technology transition forward single-handedly.

Fortunately, because so many clean technologies are now commercial, the opportunity for leadership on multiple levels, and multiple fronts, has never been more available – or more crucial. For example, simple economics will do much to propel wind, solar, and battery technologies if needed supporting infrastructure is in place and clean technologies are given the chance to compete on fair terms. Policymakers can worry less about expending political capital on expensive public subsidies for clean power, and focus instead on transpartisan policies enabling broad market access, streamlined interconnection processes, and swift power grid build-out. In the transportation sector, policies that ensure transparent vehicle pricing or increase market competition for legacy car companies may matter more than traditional regulatory standards.

This new reality also makes thoughtful economic, industrial, and social policy indispensable. The advent of new technology often comes with the promise of broad societal benefits, but making good on that promise is hardly a guarantee (witness the emergent effects of AI). It’s incumbent on government to ensure that the clean-technology transition reduces inequality and improves quality of life at scale, and that the transition doesn’t abandon workers in fossil-dependent regions and industries to the vagaries of the market. And it’s government, working across multiple scales, that can assess regional comparative advantages and figure out where the United States can still compete – as well as where it must innovate and diversify.

Government leaders, in short, have the unique ability to see all the way from the kitchen table to the commanding heights of the global economy, and to mediate between them.

We illustrate below the types of approaches that entrepreneurial policymakers can adopt to secure U.S. leadership on critical clean technologies, in ways that benefit all Americans. We focus on energy, transportation, and housing, which are collectively the largest sources of climate pollution and key elements of household and regional economies nationwide. The list below is not exhaustive, or comprehensive, but exemplary – a demonstration that there are real opportunities for change.

Unleashing Modern Energy

There’s massive untapped potential for clean energy in the United States. To realize it, we’ve got to make room for new energy to move.

This isn’t primarily a project of continued renewable energy subsidies: there’s good evidence that renewable energy can compete on a level playing field when it’s given the chance. Rather, the project is one of clearing away barriers to financing and building projects, fixing broken market incentives that favor existing players over new entrants and distort energy pricing, and accelerating construction of major grid infrastructure. 

This project looks a lot like the successful national push towards rural electrification that the United States led a century ago: a serious effort that aligns private and public investments to rethink how and where we deliver energy. In executing this effort, we must grapple with the full set of barriers to building – not just cost and permitting, but also thorny local siting processes, misaligned incentives for electric utilities, and lengthy wait times to connect projects to the grid. 

Today, of course, we’ve also got to reckon with the growing threats of cyberattacks and extreme weather to energy infrastructure, as well as the unprecedented, unpredictable energy demands of hyperscalers. Such challenges can only be managed by a mix of climate stabilization policies, economic risk-sharing strategies, and investments in infrastructure modernization. That’s not a cheap or easy proposition, but it is one with major lasting benefits.

At the consumer level, building more clean energy can help stabilize residential electricity prices (though many other factors also contribute to electricity prices and price volatility). More broadly, clean energy could unlock billions of dollars in potential efficiencies, such as by reducing costs associated with redundant natural gas transmission infrastructure. Expanding clean energy, especially distributed energy resources and virtual power plants, can also upgrade outdated grid infrastructure and secure it against cyber threats. But getting to these benefits requires government leadership.

Energy ingenuity could look like:

Making Transportation Cleaner and Cheaper

People just want to get to where they’re going safely, efficiently, and affordably. Yet despite record levels of federal transportation spending, traffic, emissions, and pedestrian deaths keep rising. And as the Cato Institute observes, “U.S. policy contributes to an inefficient and costly transportation system that reduces workers’ time and incomes.”

We can do better. This starts by recognizing that in much of the United States, cars are both essential and increasingly unaffordable. There’s opportunity for a suite of policies that break market strangleholds while expanding consumer choice, moving us away from involuntary dependence on expensive cars and towards a future with transit that people actually want to ride – as well as affordable yet excellent, and often zero-emission, personal transportation. Core federal clean transportation programs have supported $4.6 billion in domestic investments and created at least 14,000 jobs in manufacturing, demonstrating the large-scale benefits of such programs and the economic case for continued federal support. Because the tools involved are nearly all within the authorities of state and local governments, and independent of ongoing federal regulatory disputes, they also can go into effect quickly.

On the vehicle side, this agenda includes governmental efforts to address legacy company market power. Incentives and protections for domestic manufacturing are sensible so long as they boost local economies, support American workers, and drive American innovation – but they’ve got to be coupled with policies ensuring price transparency and other oversight mechanisms, to ensure that benefits flow to consumers rather than pad company profits. Unlocking a more affordable, competitive, zero-emission vehicle (ZEV) market – with more options for buyers at lower prices – is also a key political foundation to the next round of vehicle regulatory mandates, by creating a larger constituency for further progress.

On the system side, states and cities can significantly build up regional budgets with savvy transportation investments. The data are clear that transit and walkability investments bring more valuable housing into cities and connect people with jobs, raising economic activity and raising property values. Investments in electric-vehicle charging similarly boost local business revenue and spurs economic vitality. Communities thrive when their members have transportation options (that all work well), instead of being steered towards legacy vehicle technology and wrestling with creaky 20th-century infrastructure.

On the vehicle side, transportation ingenuity could look like:

On the system side, transportation ingenuity could look like:

Building Affordable, Abundant Housing

Housing shouldn’t be a luxury: it’s a prerequisite for a stable, healthy life. Yet Americans – facing prohibitively high (and increasing) rental costs as well as unrealistic down payments and pathways to ownership – are struggling to meet this basic need. And with extreme weather on the rise, renters and owners alike are facing concerns about physical safety and skyrocketing insurance as well as price hurdles. The emissions that the housing sector produces only worsen these problems.

Delivering more affordable, resilient, and climate-friendly housing means making it easier to build housing of all shapes and sizes; tailoring solutions to rural communities, urban communities, and different geographies generally; and striking a better balance between development for housing and development for other purposes. These strategies need to be paired with deep investments in government capacity to facilitate permitting and approval of new housing construction, as well as to facilitate more complex projects – like retrofits, infill development, and office-to-residential conversion – at scale. Also critical is reimagining community and stakeholder engagement on housing questions, aiming to maintain trust, democratic process, and local buy-in without overvaluing the perspectives of existing homeowners, developers, or any other particular constituency. at the expense of the rest of the community.

Housing ingenuity could look like:

Making Solutions Stick: The Cross-Cutting Benefits of Government Capacity, Pro-Democracy Design, and Innovative Financing

Each of the policy solutions above offers a way to boost climate progress while delivering everyday benefits across energy, transportation, and/or housing. But how do we make those solutions stick? With trust in government at historic lows, public-sector leaders must quickly follow ambition with action, investing in both ideas and the building blocks that turn ideas into reality. Below, we outline how public leaders can use three of these core building blocks – government capacity, financing, and pro-democracy design – to get on the scoreboard early…and stay there for the long term.

Government Capacity

Government capacity refers to the ability of government to get things done, whether through efficient processes, effective talent, or fit-for-purpose tools. Americans are frustrated by the slow pace of government, but they don’t want the functions that keep them safe and supported dismantled: they want them improved. Accomplishing this requires more than new programs or new funding streams or new inventions. It requires leaders to seriously (and systematically – not via a “wrecking ball” approach) consider which government functions are working, which need to be overhauled, and which should be retired.

Rebuilding government capacity is inseparable from strengthening democracy itself. Both of these goals are wholly intertwined with climate progress. When government acts competently, transparently, and in partnership across levels, it restores public faith that collective action is possible and worthwhile. When it can’t, even well-designed policies stall under the weight of fragmented authority, procedural burden, risk aversion, and institutional inertia. Treating government capacity as a core investment is therefore much more than administrative housekeeping. It’s a prerequisite for durable climate progress.

To boost government capacity, public leaders can:

Finance

Capital is a powerful tool for policymakers and others working in the public interest to shape the forward course of the economy in a fair and effective way. Very often, the capital needed to achieve major societal goals comes from a blend of sources; this is certainly true with respect to climate action and facilitating the transition to clean technologies.

States, cities, banks, community-driven financial institutions (CDFIs), impact investors, and philanthropies have long worked in partnership with the federal government on clean-technology projects – and are stepping up in a new way now that federal support for such projects has been scaled back. These entities are developing bond-backed financing, joint procurement schemes, and revolving loan funds – not just to fill gaps, but to reimagine what the clean technology economy can look like.

In the near term, opportunities for subnational investments are ripe because the now partially paused boom in potential firms and projects generated by recent U.S. industrial policy has generated a rich set of already underwritten, due-diligenced projects for re-investment. In the longer term, the success of redesigned regulatory approaches will almost certainly depend on creating profitable firms that can carry forward the clean-technology transition. Public sector leaders can assume an entrepreneurial role in ensuring these new entities, to the degree they benefit from public support, advance the public interest: connecting economic growth to shared prosperity.

To be sure, subnational actors generally cannot fund at the scale of the federal government. But they can have a truly catalytic impact on financing availability and capital flows nevertheless. 

To boost finance, public leaders can:

Public Participation

Public participation in climate action is often treated as a procedural requirement to be satisfied late in the process, rather than as a core function of governing well. The result is familiar: performative town halls, notice-and-comment processes that invite frustration rather than insight, and transparency tools that are easily weaponized by organized interests. This dynamic erodes trust, slows projects, and fuels the perception that government is both unresponsive and incapable. Yet participation, when designed well and tailored to the moment, is not an obstacle to effective governance:  it is how government discovers what will work, where friction will arise, and how to build solutions that communities will defend rather than resist. Treating participation as a functional component of state capacity means seeing it as an input to smarter design, faster implementation, and more durable outcomes.

Upgrading how government listens and engages is vital to upgrading how government delivers. When residents see clearly how their input shapes decisions, participation builds legitimacy and reduces the incentives for obstruction and litigation later in the process. When agencies invest in the infrastructure, tools, roles, and expectations that make participation meaningful, they create a feedback loop that improves policy design and strengthens democratic trust at the same time. And when climate leaders meet the public where they are in terms of how they experience and make consumer choices in the the climate transition, we can strengthen the connective tissue between government action and public trust.The recommendations below are aimed at helping public leaders move beyond compliance-driven engagement toward participation models that are relational, deliberative, and integrated into the machinery of experience and delivery. This approach ensures that climate solutions are not only technically sound, but socially resilient and democratically grounded. These take time, but we encourage recognition that they enable enormous time, risk and failure saved. 

To boost public participation, public leaders can:

About The Primer

Ambition to Action was authored by Angela Barranco, Zoë Brouns, Megan Husted, Kristi Kimball, Arjun Krishnaswami, Hannah Safford, Loren Schulman, Craig Segall, and Addy Smith.

Many individuals contributed ideas and input to this primer. The authors are grateful to the following individuals and organizations for their time, expertise, and constructive feedback: Patrick Bigger, Laurel Blatchford, Heather Clark, Ted Fertik, Danielle Gagne, Kate Gordon, Betony Jones, Nuin-Tara Key, Alex McDonough, Sara Meyers, Shara Mohtadi, Saharnaz Mirzazad, Beth Osborne, Alexis Pelosi, Sam Ricketts, Bridget Sanderson, Lotte Schlegel, Igor Tregub, Louise White, and Clinton Britt. The content of this primer does not necessarily reflect the views of individuals or organizations acknowledged. Any errors are the sole fault of the authors.

Beyond Binary Debates: How an “Abundance” Framing Can Restore Public Trust and Guide Climate Solutions

Public trust in U.S. government has ebbed and flowed over the decades, but it’s been stuck in the basement for a while. Not since 2005 have more than a third of Americans trusted the institution that underpins so much of American life.

We shouldn’t be surprised. Along with much progress, over the past two decades the U.S. became more unequal, saw stagnation or decline in many rural counties, stumbled into a housing crisis, and experienced worsening health outcomes. When the government can’t deliver (especially in core areas like health, housing, and economic vitality), trust in it wanes while the false promises of autocrats grow more appealing.

The strength of American democracy, in other words, hinges in large part on how well our government functions. This urgency helps explain why, at a moment when the United States is flirting with autocracy ever more vigorously, a book on precisely this topic became a #1 bestseller and prompted a debate around the “abundance agenda” that has turned quasi-existential for many in the policy world.

The abundance agenda, as described by Jonathan Chait, is “a collection of policy reforms designed to make it easier to build housing and infrastructure and for government bureaucracy to work”, such as by streamlining regulations that constrain infrastructure buildout while scaling up major government programs and investments that can deliver public goods. 

Unfortunately, popular discourse often flattens the conversation around abundance into a polarized binary around whether or not regulations are good. That frame is overly reductionist. Of course badly designed or out-dated regulatory approaches can block progress or (as in the case of the housing policies that the book Abundance centers on) dry up the supply of public goods. But a theory of the whole regulatory world can’t be neatly extrapolated from urban zoning errors. In an era of accelerating corporate capture, both private and public power structures act to block change and capture profits and power. We need a savvier understanding of what happens at the intersections between the government and the economy, and of how policy translates to communities at local scales.

We should therefore regard “abundance” less as a prescriptive policy agenda than as a frame from which to ask and answer questions at the heart of rebuilding public trust in government. Questions like: “Why is it so hard to build?” “Why are bureaucratic processes so badly matched to societal challenges?” “Why, for heaven’s sake, does nothing work?”

These questions can push us in a direction distinct from the usual big vs. small government debates, or squabbles about the welfare state versus the market. Instead, they may help us ask about interactions within and between government and the economy – the network of relationships, complex causation, and historical choices – that often seem to have left us with a government that feels ill-suited to its times.

At the Federation of American Scientists (FAS), we, along with colleagues in the broader government capacity movement, are exploring these questions, with a particular focus on agendas for renewal and advancing a new paradigm of regulatory ingenuity. One emerging insight is that at its core, abundance is largely about the dynamics of incumbency, that is, about the persistence of broken systems and legacy power structures even as society evolves. A second, related, insight is that the debate around abundance isn’t really about de-regulation or the regulatory state (every government has regulations), but rather about how multi-pronged and polycentric strategies can break through the inertia of incumbent systems, enabling government to better deliver the goods, services, and functions it is tasked with while also driving big and necessary societal changes. And a third is that the abundance discourse must center distributive justice in order to deliver shared prosperity and restore public trust.

Moving the Boulder: Inertia, Climate Change, and the Mission State

The above insights are particularly helpful in guiding new and more durable solutions to climate change – a challenge that touches every aspect of our society, that involves complex questions of market and government design, and that is rooted in the challenges of changing incumbent systems.

Consider the following. It’s now been almost 16 years since the U.S. Environmental Protection Agency (EPA) issued its 2009 finding that greenhouse gas (GHG) emissions are a public danger and began trying to regulate them. To simplify a complex history, what happened on the regulatory front was this: the Obama administration tried to push regulations forward, the Trump administration worked to undo them, and then the cycle repeated through Biden and Trump II, culminating in the EPA’s recent move to revoke the endangerment finding.

We can certainly see the power of incumbency and inertia within this history. Over a decade and a half, the EPA regulated greenhouse gases from new power plants (though never very stringently), new cars and trucks (quite effectively cutting pollution, though never with mandates to actually electrify the fleet), and…that’s about it. The agency never implemented standards for the existing power plants and existing vehicles that emit the lion’s share of U.S. GHGs. It never regulated GHGs from industry or buildings. And thanks to the efforts of entrenched fossil-fuel actors and their political allies, the climate regulations EPA managed to get over the finish line were largely rolled back. 

None of this should be read as a knock on the dedicated civil servants at EPA and partner federal agencies who worked to produce GHG regulations that were scientifically grounded, legally defensible, technically feasible, and cost effective, even while grappling with the monumental challenges of outdated statutes and internal systems. But it certainly speaks to the challenge of securing lasting change.

The work of economist Mariana Mazzucato offers clues to how we might tackle this challenge; she paints a portrait of a “mission state” that integrates all of government’s levers to define and execute a particular objective, such as an effective, equitable, and durable clean energy transition. This theory isn’t a case for simplistic deregulation, nor is it a claim that regulations somehow “don’t work”. Rather, it suggests that (especially in a post-Chevron world) another round of battles over EPA authority won’t ultimately get us where we need to go on climate, nor will it help us productively reshape our institutions in ways that engender public trust.

The shift from one energy system foundation to another is messy – and it is inherently about power. As giant investment firms hustle to buy public utilities, enormous truck companies side with the Trump administration to dismantle state clean freight programs, and subsidies for clean energy are decried as unfair and market-distorting even though subsidies for fossil energy have persisted for nearly a century, it’s clear that corporate incumbents can capture public investments or capture government power to throttle change. Delivering change means thinking through the many ways incumbency creates systems of dependencies throughout society, and what options – from regulations to monetary policy to the ability to shape the rule of law – we have to respond. To disrupt energy incumbents and achieve energy abundance, in other words, we must couple regulatory and non-regulatory tools.

After all, the past 16 years haven’t just been a story of regulatory back-and-forth. They are also a story of how U.S. emissions have fallen relatively steadily in part due to federal policies, in part to state and local leadership, and in part to ongoing technological progress. Emissions will likely keep falling (though not fast enough) despite Trump-era rollbacks. That’s evidence that there’s not a one-to-one connection between regulatory policy and results.

We also have evidence of how potent it can be when economic and regulatory efforts pull in tandem. The Inflation Reduction Act (IRA) was the first time the United States strongly invested in an economic pivot towards clean energy at scale and in a mission-oriented way. The results were immediate and transformative: U.S. clean energy and manufacturing investments took off in ways that far surpassed most expectations. And while the IRA has certainly come under attack during this Administration, it is nevertheless striking that today’s Republican trifecta retained large parts of the entirely Democratically-passed IRA, demonstrating the sticking power of a mission-oriented approach.

Conducting the Orchestra: The Need for an Expanded Playing Field

Thinking beyond regulatory levers (i.e., a multi-pronged approach) is necessary but not sufficient to chart the path forward for climate strategy. In a highly diverse and federalist nation like the United States, we must also think beyond federal government entirely.

That’s because, as Nobel-winning economist Dr. Elinor Ostrom put it, climate change is inherently a “polycentric” problem. The incumbent fossil systems at the root of the climate crisis are entrenched and cut across geographies as well as across public/private divisions. Therefore the federal government cannot effectively disrupt these systems alone. Many components of the fundamental economic and societal shifts that we need to realize the vision of clean energy abundance lie substantially outside sole federal control – and are best driven by the sustained investments and clear and consistent policies that our polarized politics aren’t delivering.  

For example, states, counties, and cities have long had primary oversight of their own economic development plans, their transportation plans, their building and zoning policies, and the make-up of their power mix. That means they have primary power both over most sources of climate pollution (two-thirds of the world’s climate emissions come from cities) and over how their economies and built environments change in response. These powers are fundamentally different from, and generally much broader than, powers held by federal regulatory agencies. Subnational governments also often have a greater ability to move funds, shape new complex policies across silos, and come up with creative responses that are inherently place-based. (The indispensable functions of subnational governments are also a reason why decades of cuts to subnational government budgets are a worryingly overlooked problem – austerity inhibits bottom-up climate progress.)

The private sector has similar ability to either constrain or drive forward new economic pathways. Indeed, with the private sector accounting for about half of funding for climate solutions, it is impossible to imagine a successful clean-energy transition that isn’t heavily predicated on private capabilities – particularly in the United States. While China’s clean-tech boom is largely the product of massive top-down subsidies and market interventions, a non-communist regime must rely on the private sector as a core partner rather than a mere executor of climate strategy. Fortunately, avenues for effectively engaging and leveraging the private sector in climate action are rapidly developing, including partnering public enterprise with private equity to sustain clean energy policies despite federal cutbacks.

An orchestra is an apt analogy. Just as many instruments and players come together in a symphony, so too can private and public actors across sectors and governance levels come together to achieve clean energy abundance. This analogy extends Mazzucato’s conception of a mission state into a “mission society”, envisioning a network that spans from cities to nation states, from private firms to civil actors, working in concert to overcome what Ben Rhodes calls a “crisis of short termism” and deliver a “coherent vision” of a better future.

Building Towards Shared Prosperity

For the vision to be coherent, it must resonate across socioeconomic and ideological boundaries, and it must recognize that the structures of racial, class, and gender disparity that have marked the American project from the beginning are emphatically still there. Such factors shape available pathways for progress and affect their justice and durability. For instance: electric vehicle adoption can only grow so quickly until we make it much easier for those living in rented or multifamily housing to charge. Cheaper renewables only mean so much when prevailing policies limit the financial benefits that are passed on to lower-income Americans.

To borrow, and complicate, a metaphor from Abundance: distributive justice questions are fundamentally not “everything bagel” seasonings to be disregarded as secondary to delivery goals. They are meaningful constraints on delivery as well as critical potentialities for better systems, and are hence central to policy and politics. No mission state or mission nation, addressing the polycentric landscape of networked change needed to shift big incumbent systems, can afford to dismiss or ignore them. Displacing those systems requires wrestling with inequality and striving to create shared prosperity through new approaches that are distributively fair.

That’s an approach rooted in orchestration, one that asks why some instruments drown out others, and how to alter relationships between players to produce better results. It understands that we can’t solve scarcity without centering distributive justice, because as long as deep structural disparities and structural power exist there is strong potential for the benefits of rapid energy or housing buildout to be channeled towards those who need them least. And it is capable of restabilizing the center of American society and restoring trust in U.S. government because it realistically grapples with the interests of incumbents while paying more than lip service to the interests of a dazzlingly diverse American public.

This re-fashioned abundance agenda can provide actual principles for administrative state reform because it knows what it is asking regulators, and the larger intersecting layers of government and civil society, to do: Systematically remove points of inertia to accelerate shared prosperity in a safe climate, while anticipating and solving for distributive risks of change.

Because again, the abundance debate isn’t really about whether or not regulations are good. It’s about unfreezing our politics by being clear and courageous about our goals for a society that works better and is capable of big things.

This is not the first time Americans have envisioned a better future in the midst of national crisis, or the first time we have collectively disrupted failed incumbent systems. From our messy foundation, to the beginnings of Reconstruction during the Civil War, to the architects of the New Deal envisioning an active and effective government in the midst of the Dust Bowl and Depression, the history of our nation is full of evidence that a compelling vision of truly democratic government can pull Americans back together despite deep and real problems. Each time, these debates have scrambled existing binaries, and driven realignment. We are on the verge of realignment again as the systems built up over the fossil era break down and our neoliberal order fragments. This is the right time to engage, together, in orchestrating what comes next.

Too Hot not to Handle

Every region in the U.S. is experiencing year after year of record-breaking heat. More households now require home cooling solutions to maintain safe and liveable indoor temperatures. Over the last two decades, U.S. consumers and the private sector have leaned heavily into purchasing and marketing conventional air conditioning (AC) systems, such as central air conditioning, window units and portable ACs, to cool down overheating homes. 

While AC can offer immediate relief, the rapid scaling of AC has created dangerous vulnerabilities: rising energy bills are straining people’s wallets and increasing utility debt, while surging electricity demand increases reliance on high-polluting power infrastructure and mounts pressure on an aging power grid increasingly prone to blackouts. There is also an increasing risk of elevated demand for electricity during a heat wave, overloading the grid and triggering prolonged blackouts, causing whole regions to lose their sole cooling strategy. This disruption could escalate into a public health emergency as homes and people overheat, leading to hundreds of deaths. 

What Americans need to be prepared for more extreme temperatures is a resilient cooling strategy. Resilient cooling is an approach that works across three interdependent systems — buildings, communities, and the electric grid — to affordably maintain safe indoor temperatures during extreme heat events and reduce power outage risks. 

Read the full report
Too Hot not to handle
Resilient Cooling Policy and Strategy Toolkit

This toolkit introduces a set of Policy Principles for Resilient Cooling and outlines a set of actionable policy options and levers for state and local governments to foster broader access to resilient cooling technologies and strategies.

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This toolkit introduces a set of Policy Principles for Resilient Cooling and outlines a set of actionable policy options and levers for state and local governments to foster broader access to resilient cooling technologies and strategies. For example, states are the primary regulators of public utility commissions, architects of energy and building codes, and distributors of federal and state taxpayer dollars. Local governments are responsible for implementing building standards and zoning codes, enforcing housing and health codes, and operating public housing and retrofit programs that directly shape access to cooling. 

The Policy Principles for Resilient Cooling for a robust resilient cooling strategy are:

By adopting a resilient cooling strategy, state and local policymakers can address today’s overlapping energy, health, and affordability crises, advance American-made innovation, and ensure their communities are prepared for the hotter decades ahead.

Hello Big Beautiful Bill, Goodbye Commonsense Energy Policy

Now that the One Big Beautiful Bill has been signed into law, the elimination of clean energy tax credits will cause a nation of higher energy bills – even for consumers and states that aren’t using clean energy. 

Despite the “Day One” Declaration of an Energy Emergency, Congress just passed a bill that will do the opposite of addressing the real needs that the U.S. has to meet energy demand and decrease electricity costs for consumers. The bill will make it harder to connect the cheapest forms of power available to the grid, solar and wind. It also takes away the existing incentives to speed up the production of clean power.

Do you want more energy on the grid faster? To provide reliable power to your homes during storms or to support the buildout of AI data centers? The Clean Energy Investment and Production Tax Credits (45Y, 48E, and 45X), a technology-neutral tax credit, made this possible by subsidizing the production of zero-emission sources like solar, wind, nuclear, hydropower, and geothermal – not dissimilar to the subsidies fossil fuels receive like 45I. This helped with the upfront cost of these projects, and since these sources of energy are cheaper than fossil fuels, they lowered consumer energy bills and increased grid reliability by providing more clean energy, quicker. Surprise, surprise, they have been eliminated, meaning the types of projects that are going to move forward will be coal and natural gas, which are more expensive. Oil and gas won big, especially since the OBBB established accelerated National Environmental Policy Act (NEPA) reviews for oil and gas projects in exchange for a fee of up to 125% of project costs and by prioritizing fossil fuel development on public lands. 

Say Goodbye to All of This

Are you a homeowner whose house is too hot in the summer or too cold in the winter? The Energy Efficient Home Improvement Credit (25C) made it possible for you to receive $1,200 to weatherize or insulate your home, making it safer and more comfortable during extreme temperatures while lowering your energy bills. This is now eliminated, making it more expensive and less feasible to make these types of home improvements. 

Do you have an interest in installing solar panels or a geothermal system to one day achieve a $0 electricity bill? The Residential Clean Energy Credit (25D), made this a reality by providing a 30% tax credit for rooftop solar, wind power, geothermal heating systems, and battery systems. This is now eliminated, making it more expensive to purchase renewable systems for your home and reducing consumer choice. This tax credit also created jobs in the residential renewables industry, so you can expect to see some significant job losses as a result. 

Do you own an EV or hope to own one someday to save money on gas and to lower carbon emissions? The Electric Vehicle Credits (45W, 30D, 30C, 25E) made this possible by allowing up to $7,500 for a new EV purchase, and up to $4,000 for the purchase of a used EV. These tax credits also provided a boost to the automotive industry and created thousands of jobs. Now that these credits are being eliminated, buying an EV just got more expensive and job losses and business closures are bound to happen. 

The bottom line? Energy prices will go up, the job market will suffer as will clean energy investment, especially in red districts – since a total of 60% of this spending has gone to Republican-held suburban and rural districts across the U.S. 

The true breadth and severity of these eliminations will reveal themselves sooner than you think.

De-Risking the Clean Energy Transition: Opportunities and Principles for Subnational Actors

Executive Summary

The clean energy transition is not just about technology — it is about trust, timing, and transaction models. As federal uncertainty grows and climate goals face political headwinds, a new coalition of subnational actors is rising to stabilize markets, accelerate permitting, and finance a more inclusive green economy. This white paper, developed by the Federation of American Scientists (FAS) in collaboration with Climate Group and the Center for Public Enterprise (CPE), outlines a bold vision: one in which state and local governments – working hand-in-hand with mission-aligned investors and other stakeholders – lead a new wave of public-private clean energy deployment.

Drawing on insights from the closed-door session “De-Risking the Clean Energy Transition” and subsequent permitting discussions at the 2025 U.S. Leaders Forum, this paper offers strategic principles and practical pathways to scale subnational climate finance, break down permitting barriers, and protect high-potential projects from political volatility. This paper presents both a roadmap and an invitation for continued collaboration. FAS and its partners will facilitate further development and implementation of approaches and ideas described herein, with the goals of (1) directing bridge funding towards valuable and investable, yet at-risk, clean energy projects, and (2) building and demonstrating the capacity of subnational actors to drive continued growth of an equitable clean economy in the United States.

We invite government agencies, green banks and other financial institutions, philanthropic entities, project developers, and others to formally express interest in learning more and joining this work. To do so, contact Zoe Brouns (zbrouns@fas.org).

The Moment: Opportunity Meets Urgency

We are in the complex middle of a global energy transition. Clean energy and technology are growing around the world, and geopolitical competition to consolidate advantage in these sectors is intensifying. The United States has the potential to lead, but that leadership is being tested by erratic federal environmental policies and economic signals. Meanwhile, efforts to chart a lasting domestic clean energy path that resonates with the full American public have fallen short. Demand is rising — fueled by AI, electrification, and industrial onshoring – yet opposition to clean energy buildout is growing, permitting systems are gridlocked, and legacy regulatory frameworks are failing to keep up. This moment calls for new leadership rooted in local and regional capacity and needs. Subnational governments, green and infrastructure banks, and other funders have a critical opportunity to stabilize clean energy investment and sustain progress amid federal uncertainty. Thanks to underlying market trends favoring clean energy and clean technology, and to concerted efforts over the past several years to spur U.S. growth in these sectors, there is now a pipeline of clean projects across the country that are shovel-ready, relatively de-risked and developed, and investable (Box 1). Subnational actors can work together to identify these projects, and to mobilize capital and policy to sustain them in the near term.

Box 1. Streamlining administrative procedure to unleash clean energy in New York.

The New York Power Authority used a simple, quick Request for Information (RFI) to identify readily investible clean energy projects in New York, and was then able to financially back many of the identified projects thanks to its strong bond rating and ability to access capital. As Paul Williams, CEO of the Center for Public Enterprise, noted, this powerful approach allowed the Authority to “essentially [pull] a 3.5-gigawatt pipeline out of thin air in less than a year.”

States, cities, and financial institutions are already beginning to provide the support and sustained leadership that federal agencies can no longer guarantee. They’re developing bond-backed financing, joint procurement schemes, rapid permitting pilot zones, and revolving loan funds — not just to fill gaps, but to reimagine what clean energy governance looks like in an era of fragmentation. One compelling example is the Connecticut Green Bank, which has successfully blended public and private capital to deploy over $2 billion in clean energy investments since its founding. Through programs like its Commercial Property Assessed Clean Energy (C-PACE) financing and Solar for All initiative, the bank has reduced emissions, created jobs, and delivered energy savings to underserved communities.

Indeed, this kind of mission-oriented strategy – one that harnesses finance and policy towards societally beneficial outcomes, and that entrepreneurially blends public and private capacities – is in the best American tradition. Key infrastructure and permitting decisions are made at the state and local levels, after all. And state and local governments have always been central to creating and shaping markets and underwriting innovation that ultimately powers new economic engines. The upshot is clear and striking: subnational climate finance isn’t just a workaround. It may be the most politically durable and economically inclusive way to future-proof the clean energy transition.

The Role of Subnational Finance in the Clean Energy Transition

Recent years saw heavy reliance on technocratic federal rules to spur a clean energy transition. But a new political climate has forced a reevaluation of where and how federal regulation works best. While some level of regulation is important for creating certainty, demand, and market and investment structures, it is undeniable that the efficacy and durability of traditional environmental regulatory approaches has waned. There is an acute need to articulate and test new strategies for actually delivering clean energy progress (and a renewed economic paradigm for the country) in an ever-more complex society and dynamic energy landscape.

Affirmatively wedding finance with larger public goals will be a key component of this more expansive, holistic approach. Finance is a powerful tool for policymakers and others working in the public interest to shape the forward course of the green economy in a fair and effective way. In the near term, opportunities for subnational investments are ripe because the now partially paused boom in potential firms and projects generated by recent U.S. industrial policy has generated a rich set of already underwritten, due-diligenced projects for re-investment. In the longer term, the success of redesigned regulatory schema will almost certainly depend on creating profitable firms that can carry forward the energy transition. Public entities can assume an entrepreneurial role in ensuring these new economic entities, to the degree they benefit from public support, advance the public interest. Indeed, financial strategies that connect economic growth to shared prosperity will be important guardrails for an “abundance” approach to environmental policy – an approach that holds significant promise to accelerate necessary societal shifts, but also presents risk that those shifts further enrich and empower concentrated economic interests.

To be sure, subnational actors generally cannot fund at the scale of the federal government. However, they can mobilize existing revenue and debt resources, including via state green and infrastructure banks, bonding tools, and direct investment financing strategies, to seed capital for key projects and to provide a basis for larger capital stacks for key endeavors. They are also particularly well suited to provide “pre-development” support to help projects move through start-up phases and reach construction and development. Subnational entities can engage sectorally and in coalition to scale up financing, to draw in private actors, and to support projects along the whole supply and value chain (including, for instance, multi-state transmission and grid projects, multi-state freight and transportation network improvements, and multi-state industrial hubs for key technologies).

A wide range of financing strategies for clean energy projects already exist. For instance:

Strategies like these empower states and other subnational actors to de-risk and drive the clean energy transition. The expanding green banking industry in the United States, and similar institutions globally, further augment subnational capacity. What is needed is rapid scaling and ready capitalization.

There is presently tremendous need and opportunity to deploy flexible financing strategies across projects that are shovel-ready or in progress but may need bridge funding or other investments in the wake of federal cuts. The critical path involves quickly identifying valuable, vetted projects in need of support, followed by targeted provision of financing that leverages the superior capital access of public institutions.

Projects could be identified through simple, quick Requests for Information (RFIs) like the one recently used to great effect by the New York Power Authority to build a multi-gigawatt clean energy pipeline (see Box 1, above). This model, which requires no new legislation, could be adopted by other public entities with bonding authority. Projects could also be identified through existing databases, e.g., of projects funded by, or proposed for funding under, the Inflation Reduction Act (IRA) or Infrastructure Investment and Jobs Act (IIJA). 

There is even the possibility of establishing a matchmaking platform that connects projects in need of financing with entities prepared to supply it. Projects could be grouped sectorally (e.g., freight or power sector projects) or by potential to address cross-cutting issues (e.g., cutting pollution burdens or managing increasing power grid load and its potential to electrify new economic areas). As economic mobilization around clean energy gains steam and familiarity with flexible financing strategies grows, such strategies can be extended to new projects in ways that are tailored to community interests, capacity, and needs.

Principles for Effective, Equitable Investment

The path outlined above is open now but will substantially narrow in the coming months without concerted, coordinated action. The following principles can help subnational actors capitalize on the moment effectively and equitably. It is worth emphasizing that equitable investment is not only a moral imperative – it is a strategic necessity for maintaining political legitimacy, ensuring community buy-in, and delivering long-term economic resilience across regions.

Funders must clearly state goals and be proactive in pursuing them – starting now to address near-term instability. Rather than waiting for projects to come to them, subnational governments, financial institutions, and other funders should use their platforms and convening power to lay out a “mission” for their investments – with goals like electrifying the industrial sector, modernizing freight terminals and ports, and accelerating transmission infrastructure with storage for renewables. Funders should then use tools like simple RFIs to actively seek out potential participants in that mission.

Public equity is a key part of the capital stack, and targeted investments are needed now. With significant federal climate investments under litigation and Congressional debates on the Inflation Reduction Act ongoing, other participants in the domestic funding ecosystem must step up. Though not all federal capital can (or should) be replaced, targeted near-term investments coupled with multi-year policy and funding roadmaps by these actors can help stabilize projects that might not otherwise proceed and provide reassurance on the long-term direction of travel.

Information is a surprisingly powerful tool. Deep, shared, information architectures and clarity on policy goals are key for institutional investors and patient capital. Shared information on costs, barriers, and rates of return would substantially help facilitate the clean energy transition – and could be gathered and released by current investors in compiled form. Sharing transparent goals, needs, and financial targets will be especially critical in the coming months. Simple RFIs targeted at businesses and developers can also function as dual-purpose information-gathering and outreach tools for these investors. By asking basic questions through these RFIs (which need not be more than a page!), investors can build the knowledge base for shaping their clean technology and energy plans while simultaneously drawing more potential participants into their investment networks.

States should invest to grow long-term businesses. The clean energy transition can only be self-sustaining if it is profitable and generates firms that can stand on their own. Designing state incentive and investment projects for long-term business growth, and aligning complementary policy, is critical – including by designing incentive programs to partner well with other financing tools, and to produce long-term affordability and deployment gains, especially for entities which may otherwise lack capital access. State strategies, like the one New Mexico recently published, that outline energy-transition and economic plans and timelines are crucial to build certainty and align action across the investment and development ecosystem. Metrics for green programs should assess prospects for long-term business sustainability as well as tons of emissions reduced.

States can finance the clean energy transition while securing long-term returns and other benefits. Many clean technology projects may have higher upfront costs balanced by long-term savings. Debt equity, provided through revolving loan funds, can play a large role in accelerating deployment of these technologies by buying down entry costs and paying back the public investor over time. Moreover, the superior bond ratings of state institutions substantially reduce borrowing costs; sharing these benefits is an important role for public finance. State financial institutions can explore taking equity stakes in some projects they fund that provide substantial public benefits (e.g., mega-charging stations, large-scale battery storage, etc.) and securing a rate of return over time in exchange for buying down upfront risk. Diversified subnational institutions can use cash flows from higher-return portions of their portfolios to de-risk lower-return or higher-risk projects that are ultimately in the public interest. Finally, states with operating carbon market programs can consider expanding their funding abilities by bonding against some portion of carbon market revenues, converting immediate returns to long-term collateral for the green economy.

Financing policy can be usefully combined with procurement policy. As electrification reaches individual communities and smaller businesses, many face capital-access problems. Subnational actors should consider packaging similar businesses together to provide financing for multiple projects at once, and can also consider complementary public procurement policies to pull forward market demand for projects and products (Box 2).

Explore contract mechanisms to protect public benefits. Distributive equity is as important as large-scale investment to ensure a durable economic transition. The Biden-Harris Administration substantially conditioned some investments on the existence of binding community benefit plans to ensure that project benefits were broadly shared and possible harms to communities mitigated. Subnational investors could develop parallel contractual agreements. There may also be potential to use contracts to enable revenue sharing between private and public institutions, partially addressing any impacts of changes to the IRA’s current elective pay and transferability provisions by shifting realized income to the public entities that currently use those programs from the private entities that realize revenue from projects.

Box 2. Combining financing and procurement policy to electrify bus systems.

Joint procurements, whereby two or more purchasers enter into a single contract with a vendor, can bring down prices of emerging clean technologies by increasing purchase volume, and can streamline technology acquisition by sharing contracting workload across partners. Joint procurement and other innovative procurement policies have been used successfully to drive deployment of zero-emission buses in Europe and, more recently, the United States. Procurement strategies can be coupled with public financing. For instance, the Federal Transit Agency’s Low or No Emission Grant Program for clean buses preferences applications that utilize joint procurement, thereby helping public grant dollars go further.

The rising importance of the electrical grid across sectors creates new financial product opportunities. As the economy decarbonizes, more previously independent sectors are being linked to the electric grid, with load increasing (AI developments exacerbate this trend). That means that project developers in the green economy can offer a broader set of services, such as providing battery storage for renewables at vehicle charging points, distributed generation of power to supply new demand, and potential access to utility rate-making. Financial institutions should closely track rate-making and grid policy and explore avenues to accelerate beneficial electrification. There is a surprising but potent opportunity to market and finance clean energy and grid upgrades as a national security imperative, in response to the growing threat of foreign cyberattacks that are exploiting “seams” in fragile legacy energy systems.

Global markets can provide ballast against domestic volatility. The United States has an innovative financial services sector. Even though federal institutions may retreat from clean energy finance globally over the next few years, there remains a substantial opportunity for U.S. companies to provide financing and investment to projects globally, generate trade credit, and to bring some of those revenues back into the U.S. economy.

Financial products and strategies for adaptation and resilience must not be overlooked. Growing climate-linked disasters, and associated adaptation costs, impose substantial revenue burdens on state and local governments as well as on insurers and businesses. Competition for funds between adaptation and mitigation (not to mention other government services) may increase with proposed federal cuts. Financial institutions that design products that reduce risk and strengthen resilience (e.g., by helping relocate or strengthen vulnerable buildings and infrastructure) can help reduce these revenue competitions and provide long-term benefits by tapping into the $1.4 trillion market for adaptation and resilience solutions. Improved cost-benefit estimates and valuation frameworks for these interacting systems are critical priorities.

Conclusion: A Defining Window for Subnational Leadership

Leaders from across the country agree: clean energy and clean technology are investable, profitable, and vital to community prosperity. And there is a compelling lane for innovative subnational finance as not just a stopgap or replacement for federal action, but as a central area of policy in its own right.

The federal regulatory state is, increasingly, just a component of a larger economic transition that subnational actors can help drive, and shape for public benefit. Designing financial strategies for the United States to deftly navigate that transition can buffer against regulatory uncertainty and create a conducive environment for improved regulatory designs going forward. Immediate responses to stabilize climate finance, moreover, can build a foundation for a more engaged, and innovative, coalition of subnational financial actors working jointly for the public good.

Active state and private planning is the key to moving down these paths, with governments setting a clear direction of travel and marshaling their convening powers, capital access, and complementary policy tools to rapidly stabilize key projects and de-risk future capital choices.

There is much to do and no time to lose as governments and investors across the country seek to maintain clean technology progress. The Federation of American Scientists (FAS) and its partners will facilitate further development and implementation of approaches and ideas described above, with the goals of (1) directing bridge funding towards valuable and investable, yet at-risk, clean energy projects, and (2) building and demonstrating the capacity of subnational actors to drive continued growth of an equitable clean economy in the United States.

We invite government agencies, green banks and other financial institutions, philanthropic entities, project developers, and others to formally express interest in learning more and joining this work. To do so, contact Zoe Brouns (zbrouns@fas.org).

Acknowledgements 

Thank you to the many partners who contributed to this report, including: Dr. Jedidah Isler and Zoë Brouns at the Federation of American Scientists, Sydney Snow at Climate Group, Yakov Feigin, Chirag Lala, and Advait Arun at the Center for Public Enterprise, and Jayni Hein at Covington and Burling LLP.

Updating the Clean Electricity Playbook: Learning Lessons from the 100% Clean Agenda

Building clean energy faster is the most significant near-term strategy to combat climate change. While the Biden Administration and the advocacy community made significant gains to this end over the past few years, we failed to secure major pieces of the policy agenda, and the pieces we did secure are not resulting in as much progress as projected. As a result, clean energy deployment is lagging behind levels needed to match modeled cost-effective scenarios, let alone to achieve the Paris climate goals. Simultaneously, the Trump Administration is actively dismantling the foundations that have underpinned our existing policy playbook.

Adjusting course to rapidly transform the electricity sector—to cut pollution, reduce costs, and power a changing economy—requires us to upgrade the regulatory frameworks we rely upon, the policy tools we prioritize, and the coalition-building and messaging strategies we use.

After leaving the Biden Administration, I joined FAS as a Senior Fellow to jump into this work. We plan to assess the lessons from the Biden era electricity sector plan, interrogate what is and is not working from the advocacy community’s toolkit, and articulate a new vision for policy and strategy that is durable and effective, while meeting the needs of our modern society. We need a new playbook that starts in the states and builds toward a national mission that can tackle today’s pressing challenges and withstand today’s turbulent politics. And we believe that this work must be transpartisan—we intend to draw from efforts underway in a wide range of local political contexts to build a strategy that appeals to people with diverse political views and levels of political engagement. 

This project is part of a larger FAS initiative to reimagine the U.S. environmental regulatory state and build a new system that can address our most pressing challenges. 

Betting Big on 100% Clean Electricity

If we are successful in fighting the climate crisis, the largest share of domestic greenhouse gas emissions reductions over the next ten years will come from building massive amounts of new clean energy and in turn reducing pollution from coal- and gas-fired power plants. Electricity will also need to be cheap, clean, and abundant to move away from gasoline vehicles, natural gas appliances in homes, and fossil fuel-fired factories toward clean electric alternatives. 

That’s why clean electricity has been the centerpiece of federal and state climate policy. The signature climate initiative of the Obama Administration was the Clean Power Plan. Over the past several decades, states have made the most emissions progress through renewable portfolio standards and clean electricity standards that require power companies to provide increasing amounts of clean electricity. Now 24 (red and blue) states and D.C. have goals or requirements to achieve 100 percent clean electricity. And in the 2020 election, Democratic primary candidates competed over how ambitious their plans were to transform the electricity grid and deploy clean energy.

As a result of that competition and the climate movement’s efforts to put electricity at the center of the strategy, President Biden campaigned on achieving 100 percent clean electricity by 2035. This commitment was very ambitious—it surpassed every state goal except Vermont’s, Rhode  Island’s, and D.C.’s. In making such a bold commitment, Biden recognized how essential the power sector is to addressing the climate crisis. He also staked a bet that the right policies—large incentives for companies, worker protections, and support for a diverse mix of low-carbon technologies—would bring together a coalition that would fight for the legislation and regulations needed to make the 2035 goal a reality. 

A Mix of Wins and Losses

That bet only partially paid off. We won components of the agenda that made major strides toward 100% clean electricity. New tax credits are accelerating deployment of wind, solar, and battery storage (although the Trump Administration and Republicans in Congress are actively working to repeal these credits). Infrastructure investments are driving grid upgrades to accommodate additional clean energy. And new grant programs and procurement policies are speeding up commercialization of critical technologies such as offshore wind, advanced nuclear, and enhanced geothermal. 

But the movement failed to secure the parts of the plan that would have ensured an adequate pace of deployment and pollution reductions, including a federal clean electricity standard, a suite of durable emissions regulations to cover the full sector, and federal and state policies to reduce roadblocks to new infrastructure and align utility incentives with clean energy deployment. We ran into real-world and political headwinds that held us back. For example, deployment was stifled by long timelines to connect projects to the grid and local ordinances and siting practices that block clean energy. Policy initiatives were thwarted by political opposition from perceived reliability impacts and blowback from increasing electricity rates, especially for newer technologies like offshore wind and advanced nuclear. The opposition to clean energy successfully weaponized the rising cost of living to fight climate policies, even where clean energy would make life less expensive. These barriers not only impeded commercialization and deployment but also dampened support from key stakeholders (project developers, utilities, grid operators, and state and local leaders) for more ambitious policies. The necessary coalitions did not come together to support and defend the full agenda.

As a result, we are building clean energy much too slowly. In 2024, the United States built nearly 50 gigawatts of new clean power. This number, while a new record, falls short of the amount needed to address the climate crisis. Analysis from three leading research projects found that, with the tax incentives in the Inflation Reduction Act, the future in which we get within striking distance of the Paris climate goals requires 70 to 125 gigawatts of new clean power per year for the next five years, 40 to 250 percent higher than our record annual buildout. 

Where do we go from here?

The climate crisis demands faster and deeper policy change with more staying power. Addressing the obvious obstacles standing in the way of clean energy deployment, like the process to connect power plants to the grid, is necessary but insufficient. We must also develop new policy frameworks and expanded coalitions to facilitate the rapid transformation of the electricity system. 

This work requires us to ask and creatively answer an evolving set of questions, including: What processes are holding us back from faster buildout, and how do we address them? How can utility incentives be better aligned with the deployment and infrastructure investment we need and support for the required policies? How can the way we pay for electricity be better designed to protect customers and a livable climate? Where have our coalitional strategies failed to win the policies we need, and how do we adjust? How should we talk about these problems and the solutions to build greater support?

We must develop answers to these questions in a way that leads us to more transformative, lasting policies. We believe that, in the near term, much of this work must happen at the state level, where there is energy to test out new ideas and frameworks and iterate on them. We plan to build out a state-level playbook that is actionable, dynamic, and replicable. And we intend to learn from the experiences of states and municipalities with diverse political contexts to develop solutions that address the concerns of a wide range of audiences. 

We cannot do this work on our own. We plan to draw on the expertise of a diverse range of organizations and people who have been working on these problems from many vantage points. If you are working on these issues and are interested, please join us in collaboration and conversation by reaching out to akrishnaswami@fas.org.

AI, Energy, and Climate: What’s at Stake? Hint: A lot.

DC’s first-ever Climate Week brought with it many chances to discuss the hottest-button topics in climate innovation and policy. FAS took the opportunity to do just that, by hosting a panel to explore the intersection of artificial intelligence (AI), energy, and climate issues with leading experts. Dr. Oliver Stephenson, FAS’ Associate Director of Artificial Intelligence and Emerging Technology Policy, sat down with Dr. Tanya Das, Dr. Costa Samaras, and Charles Hua to discuss what’s at stake at this critical crossroads moment. 

Missed the panel? Don’t fret. Read on to learn the need-to-knows. Here’s how these experts think we can maximize the “good” and minimize the “bad” of AI and data centers, leverage research and development (R&D) to make AI tools more successful and efficient, and how to better align incentives for AI growth with the public good.

First, Some Level Setting 

The panelists took their time to make sure the audience understood two key facts regarding this space. First, not all data centers are utilized for AI. The Electric Power Research Institute (EPRI) estimates that AI applications are only used in about 10-20% of data centers. The rest? Data storage, web hosting capabilities, other cloud computing, and more.

Second, load growth due to the energy demand of data centers is happening, but the exact degree still remains unknown. Lawrence Berkeley National Lab (LBNL) models project that data centers in the US will consume anywhere between 6.7% and 12% of US electricity generation by 2028. For a country that consumes roughly 4 trillion kilowatt hours (kWh) of electricity each year, this estimation spans a couple hundred billion kWh/year from the low end to the high. Also, these projections are calculated based on different assumptions that factor in AI energy efficiency improvements, hardware availability, regulatory decisions, modeling advancements, and just how much demand there will be for AI. When each of these conditions are evolving daily, even the most credible projections come with a good amount of uncertainty.

There is also ambiguity in the numbers and in the projections at the local and state levels, as many data center companies shop around to multiple utilities to get the best deal. This can sometimes lead to projects getting counted twice in local projections. Researchers at LBNL have recently said they can confidently make data center energy projections out to 2028. Beyond that, they can’t make reasonable assumptions about data center load growth amid growing load from other sectors working to electrify—like decarbonizing buildings and electric vehicle (EV) adoption.

Maximizing the Good, Minimizing the Bad

As data center clusters continue to proliferate across the United States, their impacts—on energy systems and load growth, water resources, housing markets, and electricity rates—will be most acutely felt at the state and local levels. DC’s nearby neighbor Northern Virginia has become a “data center alley” with more than 200 data centers in Loudoun County alone, and another 117 in the planning stages. 

States ultimately hold the power to shape the future of the industry through utility regulation, zoning laws, tax incentives, and grid planning – with specific emphasis on state Public Utility Commissions (PUCs). PUCs have a large influence on where data centers can be connected to the grid and the accompanying rate structure for how each data center pays for its power—whether through tariffs, increasing consumer rates, or other cost agreements. It is imperative that vulnerable ratepayers are not left to shoulder the costs and risks associated with the rapid expansion of data centers, including higher electricity bills, increased grid strain, and environmental degradation.

Panelists emphasized that despite the potential negative impacts of AI and data centers expansion, leaders have a real opportunity to leverage AI to maximize positive outcomes—like improving grid efficiency, accelerating clean energy deployment, and optimizing public services—while minimizing harms like overconsumption of energy and water, or reinforcing environmental injustice. Doing so, however, will require new economic and political incentives that align private investment with public benefit.

Research & Development at the Department of Energy

The U.S. Department of Energy (DOE) is uniquely positioned to help solve the challenges AI and data centers pose, as the agency sits at the critical intersection of AI development, high-performance computing, and energy systems. DOE’s national laboratories have been central to advancing AI capabilities: Oak Ridge National Laboratory (ORNL) was indeed the first to integrate graphics processing units (GPUs) into supercomputers, pioneering a new era of AI training and modeling capacity. DOE also runs two of the world’s most powerful supercomputers – Aurora at Argonne National Lab and Frontier at ORNL – cementing the U.S.’ leadership in high-performance computing.  

Beyond computing, DOE plays a key role in modernizing grid infrastructure, advancing clean energy technologies, and setting efficiency standards for energy-intensive operations like data centers. The agency has also launched programs like the Frontiers in Artificial Intelligence for Science, Security and Technology (FASST), overseen by the Office of Critical and Emerging Tech (CET), to coordinate AI-related activities across its programs.

As the intersection of AI and energy deepens—with AI driving data center expansion and offering tools to manage its impact—DOE must remain at the center of this conversation, and it must continue to deliver. The stakes are high: how we manage this convergence will influence not only the pace of technological innovation but also the equity and sustainability of our energy future.

Incentivizing Incentives: Aligning AI Growth with the Public Good 

The U.S. is poised to spend a massive amount of carbon to power the next wave of artificial intelligence. From training LLMs to supporting real-time AI applications, the energy intensity of this sector is undeniable—and growing. That means we’re not just investing financially in AI; we’re investing environmentally. To ensure that this investment delivers public value, we must align political and economic incentives with societal outcomes like grid stability, decarbonization, and real benefits for American communities.

One of the clearest opportunities lies in making data centers more responsive to the needs of the electric grid. While these facilities consume enormous amounts of power, they also hold untapped potential to act as flexible loads—adjusting their demand based on grid conditions to support reliability and integrate clean energy. The challenge? There’s currently little economic incentive for them to do so. One panelist noted skepticism that market structures alone will drive this shift without targeted policy support or regulatory nudges.

Instead, many data centers continue to benefit from “sweetheart deals”—generous tax abatements and economic development incentives offered by states and municipalities eager to attract investment. These agreements often lack transparency and rarely require companies to contribute to local energy resilience or emissions goals. For example, in several states, local governments have offered multi-decade property tax exemptions or reduced electricity rates without any accountability for climate impact or grid contributions.

New AI x Energy Policy Ideas Underway

If we’re going to spend gigatons of carbon in pursuit of AI-driven innovation, we must be strategic about where and how we direct incentives. That means:

We don’t just need more incentives—we need better ones. And we need to ensure they serve public priorities, not just private profit. Through our AI x Energy Policy Sprint, FAS is working with leading experts to develop promising policy solutions for the Trump administration, Congress, and state and local governments. These policy memos will address how to: mitigate the energy and environmental impacts of AI systems and data centers, enhance the reliability and efficiency of energy systems using AI applications, and unlock transformative technological solutions with AI and energy R&D. 

Right now, we have a rare opportunity to shape U.S. policy at the critical intersection of AI and energy. Acting decisively today ensures we can harness AI to drive innovation, revolutionize energy solutions, and sustainably integrate transformative technologies into our infrastructure.

Economic Impacts of Extreme Heat: Energy

As temperatures rise, the strain on energy infrastructure escalates, creating vulnerabilities for the efficiency of energy generation, grid transmission, and home cooling, which have significant impacts on businesses, households, and critical services. Without action, energy systems will face growing instability, infrastructure failures will persist, and utility burdens will increase. The combined effects of extreme heat cost our nation over $162 billion in 2024 – equivalent to nearly 1% of the U.S. GDP. 

The federal government needs to prepare energy systems and the built environment through strategic investments in energy infrastructure — across energy generation, transmission, and use. Doing so includes ensuring electric grids are prepared for extreme heat by establishing an interagency HeatSmart Grids Initiative to assess the risk of energy system failures during extreme heat and the necessary emergency responses. Congress should retain and expand home energy rebates, tax credits, and the Weatherization Assistance Program (WAP) to enable deep retrofits that prepare homes against power outages and cut cooling costs, along with extending the National Initiative to Advance Building Codes (NIABC) to accelerate state and local adoption of code language for extreme heat adaptation.  

Challenge & Opportunity: Grid Security

Extreme Heat Reduces Energy Generation and Transmission Efficiency

During a heatwave, the energy grid faces not only surges in demand but also decreased energy production and reduced transmission efficiency. For instance, turbines can become up to 25% less efficient in high temperatures. Other energy sources are also impacted: solar power, for example, produces less electricity as temperatures rise because high heat slows the flow of electrical current. Additionally, transmission lines lose up to 5.8% of their capacity to carry electricity as temperatures increase, resulting in reliability issues such as rolling blackouts. These combined effects slow down the entire energy cycle, making it harder for the grid to meet growing demand and causing power disruptions.

Rising Demand and Grid Load Increase the Threat of Power Outages

Electric grids are under unprecedented strain as record-high temperatures drive up air conditioning use, increasing energy demand in the summer. Power generation and transmission are impeded when demand outpaces supply, causing communities and businesses to experience blackouts. According to data from the North American Electric Reliability Corporation (NERC), between 2024 and 2028, an alarming 300 million people across the United States could face power outages. Texas, California, the Southwest, New England, and much of the Midwest are among the states and regions most at risk of energy emergencies during extreme conditions, according to 2024 NERC data. 

Data center build-out, driven by growing demand for artificial intelligence, cloud services, and big data analytics, further adds stress to the grid. Data centers are estimated to consume 9% of US annual electricity generation by 2030. With up to 40% of data centers’ total yearly energy consumption driven by cooling systems, peak demand during the hottest days of the year puts demand on the U.S. electric grid and increases power outage risk. 

Power outages bear significant economic costs and put human lives at severe risk. To put this into perspective, a concurrent heat wave and blackout event in Phoenix, Arizona, could put 1 million residents at high risk of heat-related illness, with more than 50% of the city’s population requiring medical care. As we saw with 2024’s Hurricane Beryl, more than 2 million Texans lost power during a heatwave, resulting in up to $1.3 billion in damages to the electric infrastructure in the Houston area and significant public health and business impacts.  The nation must make strategic investments to ensure energy reliability and foster the resilience of electric grids to weather hazards like extreme heat. 

Advancing Solutions for Energy Systems and Grid Security

Investments in resilience pay dividends, with every federal dollar spent on resilience returning $6 in societal benefits. For example, the DOE Grid Resilience State and Tribal Formula Grants, established by the Bipartisan Infrastructure Law (BIL), have strengthened grid infrastructure, developed innovative technologies, and improved community resilience against extreme weather. It is essential that funds for this program, as well as other BIL and Inflation Reduction Act initiatives, continue to be disbursed.  

To build heat resilience in communities across this nation, Congress must establish the HeatSmart Grids Initiative as a partnership between DOE, FEMA, HHS, the Federal Energy Regulatory Commission (FERC), NERC, and the Cybersecurity and Infrastructure Security Agency (CISA). This program should (i) perform national audits of energy security and building-stock preparedness for outages, (ii) map energy resilience assets such as long-term energy storage and microgrids, (iii) leverage technologies for minimizing grid loads such as smart grids and virtual power plants, and (iv) coordinate protocols with FEMA’s Community Lifelines and CISA’s Critical Infrastructure for emergency response. This initiative will ensure electric grids are prepared for extreme heat, including the risk of energy system failures during extreme heat and the necessary emergency and public health responses.  

Challenge & Opportunity: Increasing Household and Business Energy Costs

As temperatures rise, so do household and business energy bills to cover cooling costs. This escalation can be particularly challenging for low-income individuals, schools, and small businesses operating on thin margins. For businesses, especially small enterprises, power outages, equipment failures, and interruptions in the supply chain become more frequent and severe due to extreme weather, negatively affecting production and distribution. One in six U.S. households (21.2 million people) find themselves behind on their energy bills, which increases the risk of utility shut-offs. One in five households report reducing or forgoing food and medicine to pay their energy bills. Families, school districts, and business owners need active and passive cooling approaches to meet demands without increasing costs.

Advancing Solutions for Businesses, Households, and Vital Facilities

Affordably cooled homes, businesses, and schools are crucial to sustaining our economy. To prepare the nation’s housing and infrastructure for rising temperatures, the federal government should:

The Federation of American Scientists: Who We Are

At the Federation of American Scientists (FAS), we envision a world where the federal government deploys cutting-edge science, technology, ideas, and talent to solve and address the impacts of extreme heat. We bring expertise in embedding science, data, and technology into government decision-making and a strong network of subject matter experts in extreme heat, both inside and outside of government. Through our 2025 Heat Policy Agenda and broader policy library, FAS is positioned to help ensure that public policy meets the challenges of living with extreme heat.

Consider FAS a resource for… 

We are tackling this crisis with initiative, creativity, experimentation, and innovation, serving as a resource on environmental health policy issues. Feel free to always reach out to us:

Senior Manager, Climate and Health
Grace Wickerson
Medical Innovation,
Emerging Technologies
read more
Senior Associate, Climate, Health, and Environment
Autumn Burton
Environmental Health,
Resilient Communities,
Extreme Weather,
Inclusive Innovation & Technology
read more
Associate Director, Climate and Environment
Hannah Safford
read more

The DOE Office Already Unleashing American Energy Dominance

President Trump’s executive order “Unleashing American Energy” promises an American economic revival based on lower costs, bringing back our supply chains, building America into a manufacturing superpower again, and cutting reliance on countries. Within this order he tasks the Secretary of Energy to prioritize programs to onshore critical mineral processing and development. Luckily, a little-known office at the Department of Energy (DOE) – the Office of Manufacturing and Energy Supply Chains (MESC) – is already at the heart of that agenda.

MESC and the Manufacturing Renaissance

Energy manufacturing in the U.S. is experiencing a historic momentum, thanks in large part to the Department of Energy. Manufacturing was the backbone of the 20th century U.S. economy, but recent decades have seen a dramatic offshoring of domestic supply chains, in particular to China, that has threatened U.S. economic and national security. With the global supply chain crises of the early 2020s, driven by COVID and Russia’s invasion of Ukraine, Congress finally took note. Through the Bipartisan Infrastructure Law, CHIPS and Science Act, and Inflation Reduction Act (IRA), lawmakers gave the federal government first-of-a-kind tools to reassert U.S. leadership in global manufacturing. This included creating, in 2021, a program (MESC) at the DOE that focuses on critical energy supply chains, including critical minerals.

Created in 2022 after the Bipartisan Infrastructure Law that infused DOE with new funds to reshore advanced energy manufacturing, the Office of Manufacturing and Energy Supply Chains (MESC) has been hard at work executing on reshoring manufacturing. Since inception, MESC has achieved a remarkable impact on the energy supply chain and manufacturing industry in the US. It has resulted in over $39 billion of investments from both the public and private sector into the American energy sector in companies that have created over 47,000 private sector jobs. Many of these jobs and companies that have been funded are for critical minerals development and processing.

MESC will be central to the energy dominance mission at the core of President Trump’s playbook along with Energy Secretary Chris Wright.

Why MESC is Crucial for Energy Dominance

MESC’s funding for energy infrastructure will be critical to American energy dominance and to address the energy crisis declaration that Trump signed on day one in office. Projects funded through this office include critical minerals and battery manufacturing necessary to compete with China, and grid modernization technology to ensure Americans have access to reliable and affordable power. For example, Ascend Elements was awarded two grants totaling $480M to build new critical minerals and battery recycling programs in Hopkinsville, Kentucky. This grant will yield an estimated $4.4 billion in economic activity and over 400 jobs for Hopkinsville. Sila Technologies was granted $100M for a silicon anode production facility in Moses Lake, Washington, which will be used in hundreds of thousands of automobiles, and strengthening the regional economy

The Trump administration can build on these successes and break new ground along the way:

  1. Work with congress to permanently establish MESC with statutory authority and permanent appropriated funds.
  2. Continue funding projects that will result in a resilient domestic energy supply, including projects to update our grid infrastructure and those that will create new jobs in energy technologies like critical minerals processing and battery manufacturing.
  3. Use DOE’s Other Transaction Authority (OTA) to ensure prices for critical minerals and other energy manufacturing technologies that are primarily created or manufactured in China or other foreign entities of concern are profitable for companies, and affordable for customers.

Cost-conscious citizens should enthusiastically support these efforts because MESC has already proven its capability to punch above its weight. By making funding more permanent, Congress can 10x or more the speed and scale with which we assert energy dominance.

MESC is small but mighty. Its importance to continuing U.S. dominance in energy manufacturing cannot be overstated. Despite that, its funding in the budget is not permanent. The Trump administration has an opportunity to supercharge American energy dominance through MESC, but they must come together with Congressional leaders to permanently establish MESC and its mission. 2025 is an opportunity for new leaders to invest in creating American manufacturing jobs and spur innovation in the energy sector.

Energy Dominance (Already) Starts at the DOE

Earlier this week, the Senate confirmed Chris Wright as the Secretary of Energy, ushering in a new era of the Department of Energy (DOE). In his opening statement before Congress, Wright laid out his vision for the DOE under his leadership—to unleash American energy and restore “energy dominance”, lead the world in innovation by accelerating the work of the National Labs, and remove barriers to building energy projects domestically. Prior to Wright’s nomination, there have already been a range of proposals circulating for how, exactly, to do this.

Of these, a Trump FERC commissioner calls for the reorganization – a complete overhaul – of the DOE as-is. This proposed reorganization would eliminate DOE’s Office of Infrastructure, remove all applied energy programs, strip commercial technology and deployment funding, and rename the agency to be the Department of Energy Security and Advanced Science (DESAS). 

This proposal would eliminate crucial DOE offices that are accomplishing vital work across the country, and would give the DOE an unrecognizable facelift. Like other facelifts, the effort would be very costly – paid for by the American taxpayer, unnecessary, and a waste of public resources. Further, reorganizing DOE will waste the precious time and money of the Federal government, and mean that DOE’s incoming Secretary, Chris Wright, will be less effective in accomplishing the goals the President campaigned on – energy reliability, energy affordability, and winning the competition with China. The good news for the Trump Administration is that DOE’s existing organization structure is already well-suited and well-organized to pursue its “energy dominance” agenda. 

The Cost of Reorganizing

Since its inception in 1977, the Department of Energy has evolved several times in scope and focus to meet the changing needs of the nation. Each time, there was an intent and purpose behind the reorganization of the agency. For example, during the Clinton Administration, Congress restructured the nuclear weapons program into the semi-autonomous National Nuclear Security Administration (NNSA) to bolster management and oversight. 

More recently, in 2022, another reorganization was driven by the need to administer major new Congressionally-authorized programs and taxpayer funds effectively. With the enactment of the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA), DOE combined existing programs, like the Loan Programs Office, with newly-authorized offices, like the Office of Clean Energy Demonstrations (OCED). This structure allows DOE to hone a new Congressionally-mandated skill set – demonstration and deployment – while not diluting its traditional competency in managing fundamental research and development.

Even when they make sense, reorganizations have their risks, especially in a complex agency like the DOE. Large-scale changes to agencies inherently disrupt operations, threaten a loss of institutional knowledge, impair employee productivity, and create their own legal and bureaucratic complexities. These inherent risks are exacerbated even further with rushed or unwarranted reorganizations.

The financial costs of reorganizing a large Federal agency alone can be staggering. Lost productivity alone is estimated in the millions, as employees and leadership divert time and focus from mission-critical projects to logistical changes, including union negotiations. These efforts often drag on longer than anticipated, especially when determining how to split responsibilities and reassign personnel. Studies have shown that large-scale reorganizations within government agencies often fail to deliver promised efficiencies, instead introducing unforeseen costs and delays. 

These disruptions would be compounded by the impacts an unnecessary reorganization would have on billions of dollars in existing DOE projects already driving economic growth, particularly in rural and often Republican-led districts, which depend on the DOE’s stability to maintain these investments. Given the high stakes, policymakers have consistently recognized the importance of a stable DOE framework to achieve the nation’s energy goals. The bipartisan passage of the 2020 Energy Act in the Senate reflects a shared understanding that DOE needs a well-equipped demonstration and deployment team to advance energy security and achieve American energy dominance. 

DOE’s Existing Structure is Already Optimized to Pursue the Energy Dominance Agenda

In President Trump’s second campaign for office, he ran on a platform of setting up the U.S. to compete with China, to improve energy affordability and reliability for Americans, and to address the strain of rising electricity demand on the grid by using artificial intelligence (AI). DOE’s existing organization structure is already optimized to pursue President Trump’s ‘energy dominance’ agenda, most of which being implemented in Republican-represented districts. 

Competition with China

As mentioned above, in response to the 2021 Bipartisan Infrastructure Law (BIL), DOE created several new offices, including the Manufacturing and Energy Supply Chains Office (MESC) and the Office of Clean Energy Demonstrations (OCED). Both of these offices are positioning the U.S. to compete with China by focusing on strengthening domestic manufacturing, supply chains, and workforce development for critical energy technologies right here at home. 

MESC is spearheading efforts to establish a secure battery manufacturing supply chain within the U.S. In September 2024, the Office announced plans to deliver over $3 billion in investments to more than 25 battery projects across 14 states. The portfolio of selected projects, once fully contracted, are projected to support over 8,000 construction jobs and over 4,000 operating jobs domestically. These projects encompass essential critical mineral processing, battery production, and recycling efforts. By investing in domestic battery infrastructure, the program reduces reliance on foreign sources, particularly China, and enhances the U.S.’s ability to compete and lead on a global scale. 

In passing BIL, Congress understood that to compete with China, R&D alone is not sufficient. The United States needs to be building large-scale demonstrations of the newest energy technologies domestically. OCED is ensuring that these technologies, and their supply chains, reach commercial scale in the U.S. to directly benefit American industry and energy consumers. OCED catalyzes private capital by sharing the financial risk of early-stage technologies which speeds up domestic innovation and counters China’s heavy state-backed funding model. In 2024 alone, OCED awarded 91 projects, in 42 U.S. states, to over 160 prize winners. By supporting first-of-a-kind or next-generation projects, OCED de-risks emerging technologies for private sector adoption, enabling quicker commercialization and global competitiveness. With additional or existing funding, OCED could create next-generation geothermal and/or advanced nuclear programs that could help unlock the hundreds of gigawatts of potential domestic energy from each technology area. 

Energy Affordability and Reliability

Another BIL-authorized DOE office, the Grid Deployment Office (GDO), is playing a crucial role in improving energy affordability and reliability for Americans through targeted investments to modernize the nation’s power grid. GDO manages billions of dollars in funding under the BIL to improve grid resilience against wildfires, extreme weather, cyberattacks, and other disruptions. Programs like the Grid Resilience and Innovation Partnerships (GRIP) Program aim to enhance the reliability of the grid by supporting state-of-the-art grid infrastructure upgrades and developing new solutions to prevent outages and speed up restoration times in high-risk areas. The U.S. is in dire need of new transmission to keep costs low and maintain reliability for consumers. GDO is addressing the financial, regulatory, and technical barriers that are standing in the way of building vital transmission infrastructure.  

The Office of State and Community Energy Programs (SCEP), also part of the Office of Infrastructure, supports energy projects that help upgrade local government and residential infrastructure and lower household energy costs. Investments from BIL and IRA funding have already been distributed to states and communities, and SCEP is working to ensure that this taxpayer money is used as effectively as possible. For example, SCEP administers the Weatherization Assistance Program (WAP), which helps Americans in all 50 states improve energy efficiency by funding upgrades like insulation, window replacements, and modern heating systems. This program typically saves households $283 or more per year on energy costs.

Addressing Load Growth by Using AI

The DOE’s newest office, the Office of Critical and Emerging Tech (CET), leads the Department’s work on emerging areas important to national security like biotechnology, quantum, microelectronics, and artificial intelligence (AI). In April, CET partnered with several of DOE’s National Labs to produce an AI for Energy report. This report outlines DOE’s ongoing activities and the near-term potential to “safely and ethically implement AI to enable a secure, resilient power grid and drive energy innovation across the economy, while providing a skilled AI-ready energy workforce.” 

In addition to co-authoring this publication, CET partners with national labs to deploy AI-powered predictive analytics and simulation tools for addressing long-term load growth.

By deploying AI to enhance forecasting, manage grid performance, and integrate innovative energy technologies, CET ensures that the U.S. can handle our increasing energy demands while advancing grid reliability and resiliency.

The Path Forward 

DOE is already very well set up to pursue an energy dominance agenda for America. There’s simply no need to waste time conducting a large-scale agency reorganization. 

In a January 2024 Letter from the CEO, Chris Wright discusses his “straightforward business philosophy” for leading a high-functioning company. As a leader, he strives to “Hire great people and treat them like adults…” which makes Liberty Energy, his company, “successful in attracting and retaining exceptional people who together truly shine.” Secretary Wright knows how to run a successful business. He knows the “secret sauce” lies in employee satisfaction and retention. 

To apply this approach in his new role, Wright should resist tinkering with DOE’s structure, and instead, give employees a vision, and get off to the races of achieving the American energy dominance agenda without wasting time, the public’s money, and morale. Instead of redirecting resources to reorganizations, the DOE’s ample resources and existing program infrastructure should be harnessed to pursue initiatives that bolster the nation’s energy resilience and cut costs. Effective governance demands thoughtful consideration and long-term strategic alignment rather than hasty or superficial reorganizations.