We all know now that Donald Trump will take workplace as america’ forty seventh president this January, and that his said wishes for federal local weather coverage embrace withdrawing from the Paris Settlement, easing restrictions on oil drilling, and “rescind[ing] all unspent” Inflation Discount Act (IRA) funds. For climate-forward cities, the change in presidential administrations will usher in a elementary shift – from an period wherein cities had within the federal authorities a robust companion to 1 wherein they are going to shoulder way more of the transition to a wholesome, simply, clear power economic system. In these early days, no professional can foresee the precise govt, regulatory, legislative and authorized modifications that may accompany this remaking of federal local weather coverage, however I can share what elements of federal legislation and coverage – from the IRA to the Biden Administration’s Justice40 Dedication to company staffing – I’ll be monitoring to assist cities proceed to make progress on addressing the local weather disaster. I don’t declare to have all the solutions, however I hope that the next can function an early and shared analysis and monitoring agenda for native local weather policymakers and the neighborhood of observe that serves them.
Earlier than diving into the analysis agenda, I need to reassure native authorities officers and staffers that lots of people shall be monitoring the gadgets I listing beneath and advising cities on methods to proceed (the Sabin Middle’s IRA Tracker already aggregates company publications on IRA applications). Sustainability staffers needn’t handle these dangers alone. Extra to the purpose, nothing right here needs to be taken to counsel that cities sluggish their efforts to mitigate and reply to local weather change. Federal applications just like the grants, tax credit, and Greenhouse Gasoline Discount Fund applications can be found now, and if they’re undone by the Trump administration or by Congress it’s going to take time. Native governments and sustainability places of work ought to plow ahead as they’re in a position, and belief that metropolis networks, advocates and specialists will preserve them apprised of related developments.
Inflation Discount Act
The IRA, enacted in 2022, completely refashioned cities’ method to local weather motion and to collaborating with the federal authorities to pursue shared environmental targets. Tons of of billions of {dollars} in grants and tax credit had been made out there to native governments to pay for his or her clear power, electrical car, and inexperienced constructing tasks, with way more cash flowing to neighborhood teams, companies, and residents to advance their very own local weather work. Trump has indicated that he want to repeal components of the IRA however, as my colleagues discovered of their September 2024 paper, a lot of the grant cash has already been obligated. Crimson and purple districts have obtained a lot of the funding and, in consequence, some Republican members of Congress have expressed opposition to repealing the legislation. Nonetheless, extra surgical strikes on focused IRA provisions and on the implementation of IRA applications that aren’t repealed are very a lot on the desk.
Tax credit & elective pay: A lot of the IRA’s projected spend comes within the type of tax credit for clear power and clear transportation. As beforehand mentioned in depth on this weblog, the IRA additionally makes sure tax credit usable immediately by native governments and different nontaxable entities by means of elective pay. These tax credit are enshrined in statute, as is the suitable to say them by elective pay. In different phrases, the Trump administration can not repeal them by means of govt motion alone. Choices stay to weaken or get rid of these tax advantages, nevertheless, and two specifically stand out. First, Congress might repeal or change the phrases of tax provisions by means of reconciliation laws, a particular process by which Congress can enact budgetary measures with out a filibuster-proof 61 votes within the Senate. Many tax provisions are enacted and modified by means of reconciliation laws, together with the IRA itself. Republicans have already been speaking about extending Trump’s 2017 tax cuts, they usually would possibly enact laws that modifications or eliminates the IRA’s tax credit alongside different modifications to the tax code.
Second, the administration might use govt actions to preclude the environment friendly implementation of the tax credit and the elective pay program. The Treasury Division has issued hundreds of pages of rulemakings and steering that set out virtually how the tax credit work and will be claimed. Many of those guidelines have gone by means of the rulemaking course of, together with a discover and remark interval, that means that they can’t be modified till the brand new administration amends them by means of the identical formal course of. Nonetheless, beneath the Trump administration, Treasury could begin these rulemaking processes comparatively shortly and get not less than just a few guidelines amended by someday in 2026. (Sure electrical car and prevailing wage and apprenticeship guidelines, which had been finalized in Might and June, respectively, could also be extra susceptible to rollback by the Congressional Evaluation Act in January 2025, relying on the composition of the brand new Home of Representatives and the date on which Congress ends its 2024 session.) New guidelines might make it tougher or much less clear as to methods to declare tax credit by means of elective pay, even when an area authorities is statutorily entitled to them. Extra tangibly, the IRS is answerable for managing key components of the elective pay submitting course of, together with the preregistration portal and periodic workplace hours to reply filer questions, and the Trump administration could cut back employees or get rid of key places of work throughout the Inner Income Service (IRS), together with within the tax-exempt and authorities entities division.
Greenhouse Gasoline Discount Fund (GGRF): The GGRF is a three-pronged IRA program that seeds a nationwide inexperienced finance community. The $27 billion appropriated for GGRF have been dedicated in contract – an vital authorized milestone – however the grantees’ applications and monetary product choices are within the very early levels of implementation. You will need to observe right here the essential construction of GGRF, wherein the Environmental Safety Company (EPA) makes grant awards to a few Nationwide Clear Funding Fund (NCIF) grantees, 5 Clear Communities Funding Accelerator (CCIA) and 60 Photo voltaic for All grantees, every of whom then make additional loans or grants to others. Thus, whereas the EPA has duly obligated GGRF funds to its instant grantees, implementation by these grantees is a separate course of that has solely simply begun.
Furthermore, GGRF cash will get drawn down by grantees over time; it’s typically understood that GGRF funds are held in accounts outdoors of the federal authorities for switch to grantees’ ledgers solely when wanted. Nonetheless, grant contracts are confidential and, for essentially the most half, cities should not direct grantees, so there’s little public visibility into implementation mechanics. It’s attainable that Trump will search to dismantle GGRF applications. Given the opacity of the GGRF contracts, it’s exhausting to say precisely what actions the Trump administration would possibly take. Over the approaching months, I shall be anticipating protections from the Biden administration and elsewhere to make sure the continued availability of grantee funds, in addition to any Trump administration efforts to restrict entry to dedicated grant quantities.
Navigating by means of GGRF was going to be difficult no matter administration. The federal grantees, that are non-public entities, may have their very own applications and priorities, lots of which shall be imperfect suits for native authorities wants. The funds, nevertheless, will move into neighborhood tasks and in some cases to native governments immediately, making these applications vital ones to watch. Due to this fact, along with the grant awards from the EPA to the grantees, there shall be a necessity to look at for modifications or challenges in how the grantees themselves implement their awards. For instance, GGRF grantees have obligations to direct a portion of their capital into deprived communities. The IRA provisions establishing the GGRF made this tough sufficient, offering comparatively few sources to employees an oversight workplace. Beneath Trump, the EPA may have little curiosity in delivering environmental and fairness advantages to deprived communities, and it is going to be incumbent upon advocates and specialists to trace the GGRF grantees’ follow-through on their commitments.
Finalizing grant contracts, and grant applications that stay open: There are not less than tens of thousands and thousands of {dollars} of introduced grant awards for which formal contracts between the grantee and the related federal company haven’t been finalized. This can be a crucial hole – from a authorized perspective, a signed contract is considerably extra sturdy than the announcement of a grant award (although failing to maneuver ahead with an introduced award could have political penalties). Whereas there are not any ensures, businesses may have a a lot more durable time getting out of commitments they made in contract. The Biden administration has indicated that it plans to get many of those contracts signed by the point Trump takes workplace. This shall be a major enterprise. Native governments with grant agreements nonetheless beneath negotiation ought to purpose to formalize these agreements as expeditiously as attainable, together with shifting them by means of any inner critiques or processes which may maintain them up on the eleventh hour. Cities ought to pay shut consideration to phrases that it might have bother complying with, if the related company is open to negotiating them within the time that is still. A extra actionable suggestion could also be that native governments ought to be sure that inner controls are in place to adjust to the phrases of any grant settlement, to keep away from giving a Trump-controlled company a hook on which to say the contract has been breached.
Much less clear is how open grant applications for which awardees haven’t been named will proceed. The Group Change Grants program, for instance, stays open to functions on a rolling foundation till November 21, 2024. Native governments and others all for pursuing these grant applications ought to attain out to their company contacts to gauge the probability of any grant functions reaching the signed settlement stage by January 20, 2025.
Within the coming months, I’d count on technical help providers to emerge to assist native governments finalize their open grant agreements. In 2025 and past, a neighborhood of observe might want to develop to assist cities and different IRA grantees guarantee continued compliance with their grant agreements, particularly if these agreements contain cost of grant quantities in tranches. It’s going to even be crucial for grantees to fastidiously doc how grant funds are being spent, work that’s been carried out in furtherance of the grant settlement, and different reporting necessities specified by contract within the occasion of a evaluation by the Trump administration in reference to disbursing future funding tranches.
Dwelling power effectivity and electrification rebates: The IRA included almost $10 billion in rebates for residential power effectivity and electrification tasks, largely although not completely for low-and middle-income households. These rebate applications had been designed to be run by means of every state’s power workplace: the state power workplace would develop its rebate program (in line with federal parameters), apply for the funds allotted to it on a system foundation, and launch and administer this system for its residents. At present, 9 states plus Washington, DC are providing rebates, one other ten have had their program functions accepted by the Division of Vitality (DOE), and greater than twenty have but to submit program functions in any respect. As my colleagues’ analysis suggests, it will be tough for the chief department alone to reallocate greater than ten % of the funds allotted to any program beneath the IRA. Nonetheless, Congress might achieve this, together with in its potential reauthorization of the 2017 Trump tax cuts.
With out the contracts between states and the DOE, the vulnerability of the rebate applications is tough to evaluate, however a signed grant settlement is a crucial milestone. The place rebate applications are already operational, states will have the ability to depend on the authorized enforceability of their agreements, although Trump DOE’s could take steps to make the applications tougher to hold out (e.g., by understaffing the related DOE places of work or holding up evaluation of functions) For states with out rebate applications in place but, it’s not too late. The rebates are codified in legislation, they usually stay there until and till Congress modifications the legislation. States ought to work swiftly to maneuver their program improvement, utility, or grant settlement negotiations alongside. (Although the rebate applications are grants to states, I embrace them in my evaluation right here as a result of cities will depend on their states to offer rebates to native households, and since in some locations cities could play a task in pushing their states to advance their rebate applications.)
Past the IRA
Justice40 and Deprived Communities: It’s virtually a certainty that President-elect Trump will rescind Biden’s Government Order 14008 of 2021, which declared “environmental and financial justice [as] key concerns in how we govern.” It isn’t unusual for a brand new president to formally or informally revoke a earlier administration’s insurance policies, and there probably shall be some ways wherein the flip away from environmental justice as an animating precept bears out. With respect to cities, there are two vital implications I’ll be watching: the Justice40 dedication and the Council on Environmental High quality’s (CEQ) Local weather and Environmental Justice Screening Instrument (CJEST). The Justice40 dedication pledged that forty % of the advantages of sure federal local weather and clear power spending would go to “deprived communities.” Government Order 14008 didn’t immediately outline “deprived communities” (apart from referring to them as “traditionally marginalized and overburdened”), however relatively directed CEQ to develop a geospatial device – CJEST – that may present the place within the nation deprived communities are situated based mostly on standards developed by CEQ and a White Home Environmental Justice Advisory Board.
The time period “deprived neighborhood” flows by means of the IRA, together with in provisions establishing the GGRF, Environmental and Local weather Justice Block Grants, the residential power effectivity and electrification rebate applications, grant applications for port decarbonization, and funding to cut back air air pollution at colleges and elsewhere in low-income communities, amongst different applications. Company steering and decision-making for applications like GGRF rely closely on CEQ’s definition of “deprived communities” in directing funding and in making foundational choices about this system’s path. Whereas it’s protected to imagine that the Trump administration will direct much less federal local weather and clear power spending to deprived communities, it’s not but clear how else the shortage of a typical definition for, or a modified definition of, “deprived communities” will ripple into different areas on the intersection of federal and native local weather motion.
Staffing in federal businesses: Challenge 2025, extensively seen as a blueprint for the Trump administration, has a major concentrate on winnowing down federal businesses. That has widespread implications for environmental and power applications, in fact, however I’ll be watching particularly for modifications to the places of work that serve native governments and their allies. These embrace the Tax-Exempt & Authorities Entities Division on the Inner Income Service, DOE’s Workplace of State and Group Vitality Packages, EPA’s Native Local weather and Vitality Program, and staffing for IRA applications like GGRF, the Local weather Air pollution Discount Grants (CPRG) and help for creating neighborhood advantages agreements. Challenge 2025 additionally proposes eliminating the Nationwide Oceanic and Atmospheric Administration (NOAA), which hosts the Nationwide Hurricane Middle, amongst different places of work. Relying on key staffing choices, applications that native governments depend on for help might turn out to be much less accessible or be eradicated solely.
Rollback of environmental guidelines: Throughout the first Trump time period, federal businesses took greater than 150 actions to roll again environmental protections, and it stands to cause that the deregulatory agenda will proceed apace. On Monday, Trump wrote of his probably nominee to go the EPA, Lee Zeldin: “He’ll guarantee honest and swift deregulatory choices.” Environmental deregulation may have implications throughout the nation and the economic system, although native governments are uniquely positioned in that they depend on the federal authorities to control in sectors the place they can not. Lecturers (together with the Sabin Middle) and journalists carefully tracked environmental deregulation in the course of the first Trump administration, and I count on that exercise will resume. As for environmental guidelines particularly related to cities, I shall be monitoring the Biden administration’s 2024 powerplant guidelines, IRS rulemakings with respect to tax credit and elective pay, and the a number of laws limiting emissions from mild and heavy responsibility automobiles (together with developments with respect to the so-called “California waiver,” which permits the state of California to set its personal car emission requirements that different states might also undertake). I’ll even be anticipating modifications within the Federal Vitality Regulatory Fee’s and different businesses’ environmental evaluation processes for the siting of fossil gas infrastructure, as contemplated by Challenge 2025. Along with govt department actions, litigation surrounding these numerous guidelines – and specifically the Division of Justice’s willingness or to not defend them – is a vital a part of the general image. We on the Sabin Middle have submitted a number of amicus briefs on behalf of the Nationwide League of Cities and the US Convention of Mayors advocating for sturdy federal environmental protections to bolster native governments’ local weather efforts, and these alternatives for native advocacy are positive to stay crucial.
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The federal-local relationship may have a distinct tenor in 2025 than it has for the previous 4 years, however the near- and medium-term actions cities would possibly take to mitigate and reply to local weather change needn’t change abruptly. Tax credit, elective pay and the GGRF are all operational now, and signed grant agreements will stay legally binding after President-elect Trump is inaugurated.
Furthermore, most of the actions native governments take to handle local weather change – updating constructing codes and requirements, altering zoning codes to facilitate extra environmentally-friendly improvement patterns, implementing composting applications, and the like – are wholly separate from the federal authorities. The place federal actions put native local weather coverage in danger, native governments might want to shield their progress and proceed profiting from federal applications the place they exist. In these efforts, a cautious eye from advocates and specialists on modifications on the federal degree shall be key to serving to mitigate potential harm.
Amy Turner is the Director of the Cities Local weather Regulation Initiative on the Sabin Middle for Local weather Change Regulation at Columbia Regulation College.