Whether you call it clean energy, renewable energy, green energy, or you use any other term, the reality is that policy aimed at the energy transition is advancing globally. Governments are stepping in to regulate the energy market and diversify its dependence on fossil fuels. To do that, they enact policies that make it easier and more enticing to produce clean energy.
For government affairs professionals, this means they have to keep up to date on what these policies mean for their businesses and how to take advantage of some of the lucrative incentives offered in the policy packages.
What is Clean Energy Policy?
Clean energy policies are the rules and frameworks enacted by governments that determine how renewable energy will be regulated and managed in a jurisdiction. Often, they provide incentives for the production and use of low-emission energy sources. The stimuli may come in the form of tax incentives, subsidies, infrastructure improvement, and efficiency standards, or measures that disincentivize fossil fuels like fines, carbon caps, carbon taxes, funding restrictions, and stricter environmental regulations.
The goal of clean energy policy is to advance the production and use of clean, renewable energy and reduce reliance on fossil fuels.
Keeping Up with Energy & Environmental Policy Around the Globe
The tools you need to manage energy and environmental policy developments as they erupt, engage with key stakeholders, and tackle the top issues on your agenda.
Top Clean Energy Policy Efforts in the US
In the United States, both federally and at the state level, renewable energy policies are being enacted to advance the low-carbon energy transition. Below, we take a look at some of the most influential policies.
Inflation Reduction Act (IRA)
The IRA is the largest climate and energy investment package in U.S. history, providing $370 billion in funding to reduce carbon emissions. The IRA provides tax incentives for companies that cover a wide range of clean energy initiatives. It also attracts and encourages domestic and international investment in the U.S. clean energy industry.
Infrastructure Investment and Jobs Act (IIJA)
The IIJA provides significant policy initiatives and funding for the transportation sector in the U.S. It gives about $6.5 billion from 2022 to 2026 in funding for the carbon reduction program outlined in the policy. The law also includes an additional $4 billion over that timeframe to develop electric vehicle infrastructure.
Greenhouse Gas Reduction Fund (GGRF)
Beginning in the summer of 2023, the GGRF will provide $27 billion in funding “to mobilize financing and private capital to combat the climate crisis and ensure American economic competitiveness,” according to its website.
SEC Climate Disclosure Rule
“Already we’re seeing a lot of shifts happening from that upcoming ruling,” says Candice Bullard, team lead of ESG and climate advisory at FiscalNote ESG Solutions. “Companies are a lot more focused on calculating their emissions, which is the first step, and then they can make the improvements and part of that is reducing emissions by using clean energy.”
In addition to federal funding, states have their own clean energy policies to accelerate the production and use of clean energy, one of the most common being the commitment to low-emission electricity. Here are some relevant policies to watch.
Renewable Portfolio Standard (RPS)
An RPS is a policy set by states that obliges a certain percentage of their state’s electricity to come from renewable sources. Most states have an RPS in place.
100 Percent Clean Energy Goals
Taking it one step further, 21 states plus Washington, D.C. and Puerto Rico have announced pledges to hit 100 percent clean energy. California aims to do this by 2045, Minnesota is aiming for 2040, and New Jersey is shooting for 100 percent clean energy by 2035.
Global Clean Energy Policies
European Clean Energy Policies
In Europe, there are also important frameworks that steer the continent in the direction of clean energy.
“There's the Renewable Energy Directive that outlines upcoming energy goals and has recently been updated to make those goals more ambitious,” says Melissa Gipson, ESG and climate strategy associate at FiscalNote ESG Solutions. “The European Green Deal outlines climate neutrality 2050 goals and has quite a few other aspects tied into it that aren’t necessarily just clean energy. The European Industrial Strategy outlines decarbonization strategies in heavy industry.”
How China Enacts Policy on Clean Energy
China passed its carbon neutrality pledge in 2020, which they update with a series of five-year plans. Most significant among these are the five-year plan for modern energy systems and the five-year plan for renewable energy development. “The plans expand solar and wind generation, develop energy storage, optimize infrastructure, boost technologies, and develop microgrids for rural areas,” Gipson says.
China is the world’s leading producer of greenhouse gases, and the current plan states they expect to reach their peak emissions by 2030. “While they do outpace the world in EV battery production and solar capacity, it’s still up in the air as to what their plan will look like,” explains Gipson.
The Future of Clean Energy Policy and What It Means To Your Company
Clean energy policies are constantly changing. “In terms of new policies, I think we have to wait a little bit to see until next year,” says Warren Leon, executive director at the Clean Energy States Alliance. “The federal government, with the House in the hands of Republicans and the IRA done last year, doesn’t have an appetite to do anything this year. The states are still thinking about the IRA and what impact that will have.”
The future of clean energy policy can have a substantial impact on your organization, so making sure you have the latest, most accurate updates can help you prepare for imminent changes and get a leg up on your competition. “For anyone that wants to keep up on proposed legislation, sign up for those policy newsletters, keep your ear to the ground for updates, and the important role of an RSS feed cannot be overstated,” adds Gipson.
The experts at FiscalNote ESG Solutions are ready to answer your questions and make sure you are positioned to take advantage of the incentives offered in clean energy policies and that you’re well prepared for any new developments. FiscalNote ESG Solutions helps leaders make informed strategic decisions on ESG standards, climate regulations, philanthropy, communicating impact, and more.
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