Climate Policy in America: Where We Go From Here

Shift Key Podcast with Robinson Meyer and Jesse Jenkins
Heatmap News | July 16, 2025

Overview

This episode of Shift Key tackles a seismic shift in American climate and energy policy after the passage of the Republican-led “One Big Beautiful Bill” act—partisan reconciliation legislation signed by President Trump on July 4, 2025. Executive Editor Robinson Meyer, Princeton energy systems professor Jesse Jenkins, and Heatmap News editor Gillian Goodman break down this historic legislative overhaul, exploring what was repealed, revised, and retained from the Inflation Reduction Act (IRA), as well as the likely impacts on decarbonization, markets, and communities across the United States.

Key Discussion Points & Insights

1. Landmark Policy Shift: What Happened?

[01:41–04:15]

• The “One Big Beautiful Bill” act marks a sharp turn away from decades of US federal energy policy focused on supporting alternative, low-carbon energy. While not a total repeal of the IRA, it rescinds or dramatically alters its most impactful near-term climate policies, especially tax credits that propelled wind, solar, and electric vehicles.
• Robinson Meyer underscores the magnitude:

  “It is actually hard to understate the significance of this legislation, which represents...not only a change to...US federal energy policy post-2022 when the Inflation Reduction act passed, but for decades the goal of US Energy policy has been to develop and then to deploy what was once called alternative energy sources...This legislation reflects a significant turn away from that.” [02:09]

2. What Was Repealed – and What Survives

[04:15–13:28]

Major Losses:

• Wind, Solar, and EV Tax Credits:
  • The IRA’s cornerstone, technology-neutral tax credits for clean electricity and investments, survive only for non-wind/solar technologies through 2033. Wind & solar lose subsidies almost immediately, with a legal maze making transition almost impossible after 2025.

    “Those are the biggest whammies...What they're not going to do is stop the deployment of wind, solar and EVs, but they will slow...adoption. They will make the stuff that we do deploy more expensive.” —Jesse Jenkins [05:16] “It’s not so much picking the winners...so much as it is picking the losers. Like we know who the losers are. There are still a whole bunch of potential winners. But wind and solar definitely lost in this bill.” —Gillian Goodman [11:17]

• Electric Vehicle (EV) Incentives:
  • The $7,500 EV tax credit, $4,000 used EV credit, and commercial EV credits all expire for vehicles acquired after September 30, 2025.
  • Charging infrastructure support for homes and businesses disappears in 2026.
• Other Clean Energy Incentives:
  • Tax credits for residential rooftop solar, heat pumps, commercial energy efficiency/retrofitting, and homebuilder efficiency all terminate by 2026.

Retained or Extended:

• Tax Credits for Advanced/Clean Technologies (non-wind/solar):
  • Storage, geothermal, nuclear, hydrogen, and industrial carbon capture credits persist through much of the 2030s.
  • The carbon removal subsidy (“negative carbon tax”) remains intact—$180/ton for direct air capture.
• Clean Manufacturing (45X) Credit:
  • Continues for batteries, critical minerals (even extended), and non-wind components, though with tougher “foreign entity of concern” (FEOC) restrictions.
• Biofuels and Certain Hydrogen Credits:
  • 45Z for biofuels extended; 45B for hydrogen survives but with new restrictions.

3. Foreign Entity of Concern Rules: China, Supply Chain, & Bankability

[23:15–30:27]

• FEOC rules, previously exclusive to EVs, now apply broadly to all clean energy components, introducing unprecedented complexity and compliance difficulty.

  “It takes a provision that was designed to support American manufacturing of electric vehicles...and applies it across the clean energy supply chain in ways that are going to be effectively impossible to comply with.” —Gillian Goodman [24:40]

• Thresholds for allowable Chinese content are introduced but difficult to verify deep in supply chains—jeopardizing project finance and “bankability.”

  “It will be very difficult for projects to confidently tell banks, ‘Hey, I’m going to be able to claim this credit and therefore be able to account for the credit.’” —Jesse Jenkins [30:27]

4. Implementation & Regulatory Obstacles: The Quiet Repeal

[32:32–37:48]

• Even preserved tax credits may become inaccessible if the Trump Treasury Department delays implementing guidance or further restricts eligibility, an effective “backdoor repeal.”

  “The net result will be significant reduction in energy projects that qualify for the credits that are developed and put into service. Basically, in effect, this is throwing up huge barriers to actually making use of these credits.” —Jesse Jenkins [32:32]

• New executive order attempts to accelerate these restrictions, possibly striking the “long lead time buy” rule for locking in credits—a direct blow to project developers.

5. Additional Surprises: Permitting Reform & Failed Excise Tax

[37:48–41:05]

• A proposed wind/solar excise tax is dropped at the last minute, serving as a “cover” for the less-drastic (but still severe) repeal of core IRA provisions.
• Attempted “pay-for-play” permitting reform for environmental reviews is hollowed out when judicial immunity is ruled out of order, rendering the process likely ineffective.

6. Big Picture: What Does it Mean for US Energy & Climate Policy?

[41:05–61:51]

Retreat from Decarbonization

• The bill represents a clear repudiation of whole-of-government decarbonization, gutting the most critical emissions-reducing supports and reversing Biden’s systematic approach.
• However, it sustains some innovation-oriented, “nascent technology” supports—not a full return to fossil-only policy, but a weakening of ambition and speed.

  “...They actually reflect a bipartisan consensus that something slow and less direct should be done about climate change. But at least we should be supporting more nascent technologies that have the benefit of reducing emissions...” —Jesse Jenkins [41:34]

Political Dynamics & Advocacy Failures

• Multiple (sometimes conflicting) rationales drove repeal, from deficit hawkery and anti-China sentiment to explicit protection of fossil incumbents.

  “These are the technologies that present the biggest immediate market threat to the incumbent fossil fuel producers. This bill basically kneecaps the main competitors.” —Jesse Jenkins [43:55]

• Lack of community organizing and economic constituency building left policies especially vulnerable—advocacy focused too heavily on “air war” messaging, not “ground game” coalition-building.

  “Very little was invested on the pro clean energy climate side of things in actually organizing those communities...That was a big mistake.” —Jesse Jenkins [54:36]

• Political consequences (rate hikes, cancelled projects, lost jobs) may not be immediate, making electoral retribution uncertain.

  “Those dots do not connect to themselves...It has to be done through very effective political communication. And again, ideally not just top down comms, but on the ground organizing.” —Jesse Jenkins [57:06]

America’s Competitive Position

• The US is “surrendering a ton of scale in its battery industry” and stepping back from competing with China in EVs—raising competitiveness and national security concerns.

  “The US is now going to like surrender a ton of scale in its battery industry and is basically going to not try to compete with China, really on EVs or batteries at the scale that I think is economically and nationally prudent...” —Robinson Meyer [55:24]

Notable Quotes & Memorable Moments

• "We removed the accelerant of near term emissions reductions and we retained the long term tax credit available for quote unquote, advanced carbon free generation technologies. That is important. Both of those things are true at the same time. One of them is very bad for emissions, the other one is very good policy and has now been sustained by a Republican trifecta which is quite remarkable."
  — Jesse Jenkins [10:32]

• "Wind and solar definitely lost in this bill."
  — Gillian Goodman [11:17]

• "I guess just to sum us up again, the point is like we removed the accelerant of near term emissions reductions and we retained the long term tax credit available for quote unquote, advanced carbon free generation technologies. That is important."
  — Jesse Jenkins [10:32]

• “It’s hard to disentangle the substantive argument for...shouldn’t be supporting mature technologies, from the political reality that these are also the biggest threats to the oil and gas industry and they have a pretty substantive influence over what Republican policy looks like.”
  — Jesse Jenkins [44:26]

• "Whatever approach is tried in the future will have to be something new and it will have to be motivated by different arguments...That project I think is also kind of daunting."
  — Gillian Goodman [63:52]

Timestamps for Major Segments

• Main theme and bill overview: [01:41–04:15]
• What was repealed/retained, tax credits detail: [04:15–13:28]
• Wind/solar, EVs, advanced manufacturing: [05:48–19:26]
• Foreign entity of concern rules explained: [23:15–30:27]
• Implementation, regulatory obstacles, “backdoor repeal” risk: [32:32–37:48]
• Permitting reform/excise tax: [37:48–41:05]
• Big picture: Future of US energy law & politics: [41:05–61:51]
• Final reflections, optimism vs. pessimism: [61:18–68:50]

Tone & Closing Sentiments

Throughout, the hosts balance technical analysis with moments of frustration and wry resignation. They are sober about the setbacks—often hammered home with darkly comedic asides or weary sighs—but ultimately remind listeners that major progress, though slowed and partially reversed, is not wholly erased.

“I think the only way to survive in this field is to recognize that we are making progress. And it sucks to see progress made evaporate. But not all of that progress evaporates...We made substantive progress and we will continue to make additional progress. So we took two steps forward or three steps forward and two steps back...”
— Jesse Jenkins [63:52]

Summary Table: Major Inflation Reduction Act Policies & Their Fate

| Policy Area | Status after “One Big Beautiful Bill” | | -------------------------- | -------------------------------------------------- | | Wind/Solar Tax Credits | Repealed/terminated 2025–26 | | EV Purchase Tax Credits | Repealed after 9/30/2025 | | Home Solar/Heat Pump Credits | Repealed after 2025 | | Storage, Nuclear, Geothermal, Hydro Credits | Retained through 2033+ | | Manufacturing Tax Credits | Retained (except wind), tougher FEOC after 2025 | | Carbon Sequestration (45Q) | Retained through 2033, some changes | | Biofuels/Hydrogen Credits | Retained/extended, FEOC rules apply | | Charging Infrastructure | Ends 6/30/2026 |

For Listeners Who Missed the Episode

If you want to understand the future of American decarbonization policy post-2025—what’s been lost, what remains, and why—this episode provides an unvarnished, in-depth roadmap. The recovery from this pivot will require new coalitions, strategies, and an evolution in how advocates frame both the urgency and the benefits of clean energy. As the hosts emphasize, the road just got much steeper, but not entirely closed.