Biden's climate law is fueling a quiet competition among Democratic governors

Pennsylvania Gov. Josh Shapiro is pitching a plan to cut industrial pollution without relying on his Republican-controlled state Senate.

Michigan Gov. Gretchen Whitmer, fresh off passing a package of climate laws, wants to smooth the way for a renewable energy boom.

And Maryland Gov. Wes Moore has big ideas about a new economywide climate standard. But the basic details — like what it would regulate or how to pay for it — are still being worked out.

Ambitious Democratic governors across the country are rolling out climate plans under a little-known program in the Inflation Reduction Act, President Joe Biden’s signature climate law. The plans are part of a competition for EPA funding — called Climate Pollution Reduction Grants — worth up to a half-billion dollars.

That’s a transformative sum for most states. The competition also doubles as one of the first contests in the invisible primary to succeed Biden as standard bearer for the Democratic Party. There, climate action promises to be a critical yardstick as candidates vie for progressive votes as well as support from key party power brokers: labor unions, energy industry donors and environmental groups.

“We’re getting a snapshot of what’s on the table in each state,” said Irene Nielson of the Natural Resources Defense Council. The plans have lasting power, she added, because they “create a vision for the next decade or two of climate investments.”

For their part, Republican White House hopefuls already have treated the program as a way to bolster their conservative bonafides. Five governors in the country declined to participate in the program. One was Florida Gov. Ron DeSantis, who quit the Republican presidential primary in January. And two others — South Dakota Gov. Kristi Noem and Iowa Gov. Kim Reynolds — have angled for a spot on a Republican presidential ticket.

Now, it’s Democrats’ turn to use the program to burnish their climate records.

Illinois Gov. JB Pritzker’s plan emphasizes the building sector — not the state’s biggest source of climate pollution, but one that’s notoriously difficult for the federal government to reach. Illinois’ plan envisions a suite of programs to align local, state and federal subsidies, including a $12,000 whole-home decarbonization incentive to cover remaining gaps, paired with new statewide building codes.

California Gov. Gavin Newsom’s plan builds on the state’s unique power over the transportation sector. With authority to set its own tailpipe pollution rules, California’s strict transportation regulations already are the model for more than a dozen other states.

Newsom’s plan focuses on commercial transportation: subsidizing zero-emission medium- and heavy-duty trucks, especially for small fleets; and building chargers and hydrogen refueling stations around ports and warehouse districts.

In Pennsylvania, Shapiro is leveraging a pair of hydrogen hubs planned for his state that have won $1.7 billion in federal funding. His plan proposes to push the industrial sector to adopt hydrogen, carbon-capture, electrification and other emerging technologies — funded almost entirely by federal programs and potentially backed up by state regulations or “financial disincentives” for industries that don’t move off fossil fuels.

In Michigan, Whitmer wants to use federal funds to help implement the state’s new laws requiring all electricity to come from “clean” sources by 2040. The governor’s plan calls for subsidizing renewable energy projects on brownfields and former industrial sites. It also looks to fund grid-scale battery storage as a way to close all the state’s coal plants by 2030.

And in Maryland, where Moore has signed legislation to boost offshore wind and energy storage, the governor’s plan pitches new standards for building emissions and strategies for reducing vehicle-miles traveled.

But Moore’s plan leaves big questions unanswered, too. The top priority in his plan is a Clean Economy Standard, a set of incentives and standards “that would require polluters to pay for their pollution and provide at least $1 billion per year for clean economy investments.”

It’s unclear what exactly that would look like; the plan floats the possibility of a cap-and-invest program, a carbon fee or a bundle of fees and tolls. “The state will need to decide which one or more of these or other funding solutions are best for Maryland,” the plan says.

Maryland’s plan also says the Moore administration is developing a Clean Power Standard to achieve 100 percent clean power by 2035, but it doesn’t offer a timeline for implementing it.

A spokesperson for Moore said the governor is working with lawmakers, climate advocates and community leaders to further develop Maryland’s climate policies.

“Governor Moore has been very clear, he is working to ensure that the clean energy transition brings everyone along, and not just some,” his senior press secretary, Carter Elliott, IV, said in a statement, pointing to Moore’s recent proposal to spend $90 million on electric school buses, charging stations and building decarbonization.

“However, he knows that alone won’t solve our climate challenges in Maryland but the administration has made an important down-payment on a more sustainable future.”

Money and bragging rights

Advocates and experts are combing through the plans to discern which ones show the most ambition. And the competitive nature of the program — only a few states will land the biggest grants — means the winning governors will get a unique opportunity to implement their vision, along with bragging rights over the others.

High-profile Democratic governors “have all taken this program pretty seriously,” said Justin Balik, the state program director for Evergreen Action. Their plans include targeted emissions reductions, along with analysis of how to spread the benefits to low-income and disadvantaged communities, as well as how to align their state’s workforce with their clean energy needs.

This program is unique, he added, because it allows Democratic governors to transcend some of the partisan and budgetary constraints they normally face. Instead, governors will get the chance to show what they can do with a fire hose of federal funding.

“It’s kind of tailor-made for some of these states, to be honest,” Balik said. “That's one of the things that we find most exciting about the program, is the opportunity to move significant action and progress in places where it’s been really challenging to date for political reasons.”

These plans are best thought of as plugging the gaps in federal climate action, rather than a holistic strategy to decarbonize an entire state, said John Carlson of Clean Air Task Force. Those gaps will look different state by state and sector by sector.

“You need to be generating hundreds of pathways to tackle any individual sector. And that's what [Climate Pollution Reduction Grants are] doing. It's helping generate all of these ideas, all of these pathways,” he said. “Which is both incredibly exciting but also makes it difficult to do this apples-to-apples comparison of the plans.”

Climate groups aren’t just looking for the biggest plans; they’re scrutinizing whether governors are actually proposing direct ways to cut emissions — or if they’re fudging the numbers.

Some states are proposing voluntary programs, particularly for the industrial sector, that aren’t guaranteed to actually cut emissions at the promised scale. And some plans lack enough detail to truly quantify any emissions abatement.

That soon could change, as states turn their climate plans into more detailed grant applications to EPA, due April 1. That also will be the date when states reveal whether they’ve agreed to jointly apply for funding as a regional coalition.

A version of this report first ran in E&E News’ Climatewire. Get access to more comprehensive and in-depth reporting on the energy transition, natural resources, climate change and more in E&E News.