Axios Pro: Energy Policy

June 08, 2023

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1 big thing: GOP state lawmakers don't mind the IRA

Illustration: Annelise Capossela/Axios

The Inflation Reduction Act's tax-credit approach to climate policy is getting a warm reception from some state GOP legislators, Jael and Nick write.

Why it matters: The IRA is an all-carrot, no-stick approach to cutting emissions — a method favored by moderates that may help it withstand repeal pushes from the hard right.

Driving the news: GOP state lawmakers from across the country flew in this week for the annual Leadership Alliance for a More Perfect Union (LAMP) conference, hosted by the Joseph Rainey Center for Public Policy.

  • We got exclusive access to the gathering, which served as a forum for Republicans to discuss climate and energy, among other topics.

Here's what some attendees said about the IRA's tax-credit approach...

  • Montana Rep. Courtenay Sprunger is "excited" about the federal subsidies for lower-carbon energy projects because the government is "looking at it as a way to incentivize innovation."
  • "As a legislator, in general, I prefer the carrot to the stick," Sprunger said.
  • Jason Saine, a senior chair of the North Carolina House Appropriations Committee, said his goal now is to "take the most advantage" from the law: "This is where we'll beat California, where we'll beat Colorado."
  • Daniel Linville, chair of the Technology and Infrastructure Committee in the West Virginia House, said he seeks to avoid being "hostile" to coal and other existing industries.
  • But he told Nick, "We want to make sure that as people are looking to deploy capital and invest that we are the most welcoming place we can possibly be."
  • Some lawmakers — such as Wendy Horman, chair of the Idaho House Appropriations Committee — emphasized that new regulations are a big concern, as opposed to tax credits like those created by the IRA.

Between the lines: The lawmakers talked a lot about permits, tax policy, and minimizing pain in local economies that rely on producing fossil fuels.

  • At the federal level, they want to see Congress pursue additional changes to the environmental review process.
  • Already, private capital in the renewables and EV space is flowing to Southern states with business-friendly labor laws, low taxes and fewer permitting requirements.
  • Plus, Republican states tend to be fertile territory for renewables, given their abundance of wind, sun and open space.

The bottom line: Republican states want to position themselves to capitalize on all of the money flowing from the IRA, which managed to survive its first threat from the far right during the debt ceiling debate.

  • Rep. Patrick McHenry — who spoke at LAMP today — told Nick future repeal efforts will depend on "how the presidential election goes" and whether or not the IRA "works."

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