Climate Policy Cannot Continue to Breed Austerity
We risk losing the existential fight and opportunity to decarbonize our economy.
The war in Iran lays bare the shortcomings of our longstanding and volatile oil economy. But it also exposes the underlying issue of overhauling this system through a transition that so far has asked individuals to pay more for less. If people continue to experience the mismanagement of our transition to renewable energy as a heightened cost of living, they will begin to associate it with the systems of austerity they’ve begrudgingly dealt with before, not the optimism of a new economy where needs are met without the inherent pollution of fossil fuels. Just as war is unpopular, the raw deal of raised prices is similarly untenable, making it the wrong approach for achieving a goal with high existential stakes.
As this war enters its fourth week, and with the Strait of Hormuz closure effectively blocking oil, gas, LNG, and fertilizer shipments from the region, many have noted the merits of solar and wind energy unbounded by maritime shipping crises. Spain and Pakistan are two countries where the widespread adoption of solar power has eased the pain of the rise in oil price. As UN climate chief Simon Stiell put it last week, “Sunlight doesn’t depend on narrow and vulnerable shipping straits.”
But fuel and other energy costs have been up long before the US and Israel launched a war in Iran, particularly in California where refinery closures present a more local chokepoint. Prices at Californian pumps rose 50¢ per gallon in the first week of March because of the war, but this is only half of the full dollar increase since this time last year, and likewise represents only half the story. The closure of the Phillips 66 refinery in Carson is soon to be followed by the Valero refinery shuttering in Benicia. Even before the Iran war, Economists at UC Davis estimated that these two closures alone would raise Californian gas prices by $1.21 by August.
In theory, refinery closures are a good thing–California seeks to curb emissions by reducing fossil fuel production, as it should. But the state’s approach leaves residents with the same energy needs, only more expensive–a recipe for household economic crisis. California has focused on regulating out the old, but so little effort has been spent on providing new affordable renewable alternatives to oil and gas. Essentially, our leaders have pitted the economic interests of everyday people against the climate fight they otherwise support. Polling shows that affordability is most Californians’ top concern; they believe that the state is heading in the wrong direction despite climate regulation that has reduced the state’s emissions.
To shift our economy away from fossil fuels, climate policy needs to go hand in hand with affordability. A potential playbook is already emerging:
Electricity bills have increased an average 40% nationwide since 2020 outpacing even the 26% increase to the overall cost of living in the same time frame. A majority of Americans point the blame squarely at their utility companies. New Jersey Governor Mikie Sherrill, who ran and won on an affordability platform in 2025, declared a state of emergency on her first day in office, freezing electricity costs, issuing credits to consumers, and directing the Board of Public Utilities to invest heavily in solar, utility-scale battery storage, and a virtual power plant program to aggregate renewable energy sources and reduce costs.
Transportation is the primary source of carbon emissions in the U.S., and free or low-fare transit is a ready solution. Mayor Mamdani’s free bus agenda is a common sense approach that proactively invites commuters to ditch their cars and hop on the bus. Direct public investments in zero emission “micromobility”--bikes, e-bike fleets, and electric scooters–are also effective. Consumer incentives like Washington State’s point-of-sale WE-Bike Rebate provide consumers immediate, easy-to-use incentives that socialize people with the benefits of a battery powered mode of transportation.
Good jobs are also a pillar of any affordability measure, and our response to climate change is an opportunity to provide these jobs nationwide. Public lands and parks are underfunded, and the Climate and Community Institute finds that properly investing in them would create thousands of good jobs in forest restoration that would reduce wildfire risk and enhance forest resilience. Whole home repair programs and repair and deduct policies can address climate risk for both homeowners and renters, while lowering utility costs and growing jobs in the building sector. High road, union manufacturing jobs in a domestic supply chain for renewables and batteries should be the foundation of the transition, and will require industrial policy that exceeds what the Inflation Reduction Act attempted, while front-loading benefits to working people.
Building decarbonization is a necessary part of the green transition that often inconveniences people where it hurts most--at home. In this context, a rent freeze that is often touted purely for economic relief to tenants can also be understood as a primer for further climate action. Green retrofits are less likely to meet tenant resistance if they know the costs will not be passed on through their monthly rent. Rent relief can also prevent displacement when building decarbonization or nearby public transit makes apartment buildings more attractive to wealthier people. We already see some early uptake here in California, as pilot projects in cities like San Francisco use money from the Equitable Building Decarbonization (EBD) program to ensure 5 and 10 year rent freezes following retrofits and written commitments from landlords not to evict on the basis of a green retrofit.
These are simply a few of the most pressing examples of where climate policy needs to present an upside in order to build consensus. But the green energy transition will ultimately impact every sector it powers. This means that every pivot made must materially benefit those asked to adapt. This demonstrated gain must go beyond simply environmental arguments which are well-intentioned but mostly played out, and must now instead focus on the economic advantages we can all access if we’re bold enough to pursue the right policy. A transition of our entire economy is an alienating process with obvious growing pains in the best of circumstances. We must ensure that people aren’t also made poorer in the process and that our climate policy goes hand in hand with affordability--not something more austere.
ICYMI: What We Read and Reacted to This Week:
California’s SB 886 could make storage a prerequisite for data center interconnection (3/23/2026)
Two new bills SB 886 and 887 will make pairing battery storage with renewable production an even better option for data centers looking to achieve regulatory compliance and business efficiency at once. SB 886 requires that big projects cover half of their hourly energy needs with dispatchable zero-carbon supply, something most practically done through BESS and renewables. Meanwhile, SB 887 would create a separate fasttracked environmental compliance route for projects with at least four hours of storage capacity at 100% peak demand and 100% carbon-free hourly supply within five years.
Utilities Are — Cautiously! — Learning to Love Startups (3/10/2026)
This piece discusses how utilities, often structurally incentivized to avoid innovative but disruptive technologies, are increasingly willing to try new things as wider electrification spurs the need for grid progress.
A new notice of funding opportunity from the Department of Energy makes up to $500 million available for projects that develop domestic facilities for battery materials processing, manufacturing and recycling. Applications are due April 26, 2026.
Recent talks between representatives from California and the EU are just the most recent example of the state acting more like a country when it comes to climate diplomacy. Governor Gavin Newsom and European Commission Executive Vice-President for a Clean, Just and Competitive Transition Teresa Ribera discussed avenues for cooperation between the two as federal cooperation seems increasingly unlikely.
GM–LG shifts a US plant from EV batteries to LFP energy storage (3/18/2026)
The latest example of an EV plant being retooled towards BESS production. Furloughed workers are being redeployed to accommodate the pivot. It is also notable that the plant will focus on LFP, a cheaper chemistry that uses fewer critical materials than past cells.
Ford’s new battery business seeks to spin profits out of costly EV investments (3/6/2026)
Not so much news, but wider analysis and context for Ford’s decision to pivot factory capacity to battery storage from EVs following the unraveling of their joint-venture with SK On, BlueOval SK.
SK On Targets US Energy Storage Market in Shift From EVs (3/15/2026)
The other side of what was once BlueOval SK is also pivoting towards BESS, pursuing mainly LFP production as well.
https://suno.com/s/iPPp9fCjvdwq5fvA