America’s climate policy is undermining itself

October 6, 2025

By Adam Musa

Tranquility News Correspondent, North America

South Royalton, Vermont

Progress in addressing climate change hinges on consistent and transparent policy frameworks. Currently, the United States is conveying a fragmented message that erodes trust and hinders effective action.

Since the Trump administration assumed office on January 20, 2025, U.S. climate policy has been characterized by inherent contradictions. The government incentivizes households to purchase hybrid and electric vehicles, yet simultaneously subsidizes the acquisition of large, fuel-inefficient SUVs. It promotes secure carbon storage solutions but expedites permitting processes without adequate safeguards against potential leaks.

Furthermore, following the enactment of the most comprehensive climate legislation in U.S. history — the Inflation Reduction Act (IRA) — Congress has diluted its impact through the subsequent passage of the One Big Beautiful Bill (OBBB).

Conflicting Incentives in Vehicle Policy

For over two decades, federal tax credits have encouraged consumers to adopt hybrid and electric vehicles. However, these incentives are often complex, nonrefundable, and subject to frequent changes, creating uncertainty. In contrast, section 179 of the tax code permits business owners to deduct the entire cost of heavy-duty SUVs — vehicles that consume significantly more fuel — in a straightforward manner.

This duality sends mixed signals: one provision rewards environmentally responsible choices, while another subsidizes inefficiency. Consumers seeking to make informed decisions must navigate intricate regulations, all while national emissions continue to rise unabated.

The IRA of 2022 aimed to resolve these inconsistencies by broadening credits for clean vehicles. Yet, the 2025 enactment of the OBBB has begun phasing out these benefits precisely as electric vehicle adoption was gaining momentum. Consequently, access to cleaner transportation options has become more challenging, while tax advantages for high-emission vehicles persist, perpetuating inefficiency.

The Promise and Risks of Carbon Capture

Similar inconsistencies permeate carbon capture and sequestration (CCS) initiatives. Numerous projects are underway to inject carbon dioxide into geological formations, with formal protocols emphasizing thorough site evaluations, financial guarantees, and extended monitoring periods of up to 50 years.

In reality, however, significant hazards persist. Many proposed sites involve depleted oil fields containing undocumented wells, which could serve as conduits for CO₂ leakage. Communities in proximity — frequently those already burdened by environmental injustices — raise critical concerns: Who bears the responsibility for sealing abandoned wells? What mechanisms ensure accountability if CO₂ contaminates aquifers or displaces surface oxygen, posing asphyxiation risks?

While the Environmental Protection Agency (EPA) advocates for public engagement and equity considerations, the pace of permitting outstrips regulatory oversight capabilities. Without enhanced mandates and dedicated funding for enforcement, public confidence in CCS technology may diminish, impeding its widespread deployment.

From IRA Momentum to OBBB Reversal

The IRA was structured to deliver enduring stability, with its neutral incentives for clean energy extending into the 2030s. These measures spurred advancements in renewables, electric vehicles, hydrogen production, carbon capture, and domestic manufacturing, attracting over $300 billion in private investments by 2024.

The OBBB, however, abruptly curtailed this progress in 2025 by hastening phase-outs, restricting eligibility, and withdrawing funds. This shift communicated to investors that policy commitments are unreliable and subject to sudden alterations.

Key changes include:

• Clean power credits (45Y/48E): The IRA linked phase-outs to emissions reductions with extended timelines; the OBBB compresses these to 2027–2031, rendering many projects uneconomical.
• Energy storage: IRA-established standalone credits are now limited, delaying essential grid-stabilization efforts.
• Electric vehicles: The IRA provided $7,500/$4,000 credits through the 2030s; the OBBB terminates them post-2025, disrupting emerging market growth.
• Manufacturing (45X): IRA support for U.S. clean-tech supply chains is shortened, potentially leading to facility shutdowns and renewed subsidies for metallurgical coal.
• Hydrogen (45V): IRA credits, based on carbon intensity and extending to 2032, are now abbreviated and more stringent, excluding viable initiatives.
• Carbon capture (45Q): Expanded IRA incentives face new temporal constraints, limiting retrofit applications.
• Grants and loans: Substantial IRA allocations for environmental and community programs have been rescinded.

Projections indicate severe repercussions: a 20 – 50% reduction in new clean-energy projects through the 2030s, jeopardy to hundreds of billions in investments, annual household energy cost increases of $80 – 200 by 2035, and an additional 7 billion tons of CO₂ emissions by 2050 relative to an unaltered IRA trajectory.

Restoring Credibility as a Core Imperative

The success of the 1970 Clean Air Act stemmed from its unified approach: uniform standards, robust enforcement, and meaningful public participation. The IRA momentarily replicated this coherence in climate policy, only for the OBBB to fragment it.

This pattern recurs across vehicle incentives and carbon storage: bold goals compromised by exemptions, rapid implementation without sufficient scrutiny, and commitments eroded by policy reversals.

Effective climate strategies thrive when perceived as equitable and reliable — aligned incentives, genuine community involvement, and protections commensurate with risks. They falter when resembling fiscal manipulations or hasty approvals.

To ensure the longevity of climate policy, Congress must harmonize incentives and reinstate consistency. In the realm of climate governance, credibility remains the paramount asset.