By Vikrum Aiyer, Senior Fellow, University of California at Berkeley, Center for Law & Business
There’s a quiet retreat underway in American climate politics.
Across blue states, leaders who once championed ambitious climate targets are now pulling back: cutting efficiency programs, delaying energy standards, and redirecting funds to blunt rising utility bills. The political logic is clear: affordability is the issue of the moment, voters are hurting, and pausing climate or efficiency may deliver savings to consumers.
But the policy conclusion is wrong.
If we respond to today’s energy prices by dismantling the very tools designed to manage them, we aren’t solving the affordability crisis; we’re actually deepening it. We may create the appearance of relief in the short term, but at the cost of a system that is more volatile, less predictable, and ultimately more expensive.
Because the truth is this: well-designed climate policy isn’t a cost driver. It’s a cost management system. And more than that, it is the foundation of something we should be far more explicit about: American energy security and leadership in the 21st century.
The countries that win the next era of energy won’t be the ones that abandon standards, markets, and long-term planning. They’ll be the ones that leverage them to build systems that are more reliable, more affordable, and more globally competitive.
Why Energy Prices Are Rising
If energy bills are rising (and they are), we should be honest about why.
We are entering a period of extraordinary demand growth, driven by artificial intelligence, advanced manufacturing, and the electrification of everything from vehicles to buildings. At the same time, the physical backbone of our energy system ( the grid itself) is strained, underbuilt, and only recently treated as anything more than an afterthought.
Layer onto that the inherent volatility of oil markets, and it becomes clear that the problem is not that we have tried to manage the system too much.
It’s that we have not managed it well enough.
There is no such thing as energy leadership without price stability. And there is no such thing as energy security if households remain exposed to volatile global commodity markets.
The goal cannot simply be to produce more electrons. It must be to produce energy that is more reliable, more predictable, and more controllable – the kind that families can depend on and businesses can build around. That is what modern climate policy, done right, is designed to deliver.
Climate Policy Lowers Costs When It Creates Certainty
For too long, climate policy has been cast as a set of expensive obligations and compliance-based rules that raise costs today in exchange for benefits tomorrow. That framing misses what the best policies actually do. Standards, markets, and incentives create clarity that biases action over hesitation.
They allow companies to find the lowest-cost path forward today and years on from now. And they reward the kind of innovation that brings costs down over time, not theoretically, but predictably, while providing good jobs and increasing options for consumers.
We’ve seen this story before. Not long ago, solar panels were too expensive to matter. Today, they are among the cheapest sources of electricity in the world. The reason is clear: we committed to targets, timelines, and consistent implementation, and the innovation cycle did the rest.
And it’s not just a blue-state story. Texas, hardly a bastion of climate politics, now leads the nation in utility-scale solar deployment, building one of the largest clean energy markets in the world while creating jobs and driving real economic growth. That’s the point: when policy creates certainty, markets scale and costs come down. The most expensive energy policy is the one you start, stop, and start again. That lesson applies today.
Across red and blue states, the same pattern is taking hold. From large-scale deployment in energy-producing regions to carbon markets in states like California channeling capital into lower-cost, lower-carbon industries, the results are consistent. Stability attracts investment. Investment drives down costs. It creates local employment, provides consumers with more choices, and supports a more resilient economy.
The risk now is not climate ambition. It is losing the certainty that businesses, innovators, and communities rely on to build and bring down energy costs.
And that is not just a policy choice.
It will shape how voters experience energy costs in the years ahead.
Energy policy isn’t a binary choice between expensive environmentalism and petro-propaganda. We can manage emissions and make energy more affordable. There are three concrete ways to build a system that works:
- First, follow through on implementation and timelines. Delaying efficiency programs, energy standards, or renewable mandates only interrupts the investment cycle, slows deployment, and ultimately raises costs. Predictability is the key to unlocking capital and scaling innovation.
- Second, leverage carbon markets and offset programs. Programs like California’s cap-and-trade, Washington’s market mechanisms, and New York’s emissions trading, including AB1207’s implementation for carbon removal, provide emitters with flexibility while containing costs. These tools are embraced even by segments of the fossil fuel industry because they make compliance achievable without distorting markets — while simultaneously incentivizing the full suite of tools in the climate toolkit (read: carbon capture and removal).
- Third, deploy advanced compute and data center infrastructure responsibly, with community-centered designs. Electrification and AI growth are driving new demand signals for electricity, water, and cooling. Smart standards can ensure that ratepayers don’t shoulder higher costs while embedding emissions management, waste heat capture, and CO2 removal incentives. Done well, this creates certainty for business, signals demand for emerging carbon management industries, and strengthens reinvestment in communities.
Together, these approaches give businesses the certainty they need to invest boldly, bring down costs, and expand clean energy solutions, while keeping the bills of working families predictable. This is what affordability looks like in practice.
Affordability Also Requires Carbon Management
Even with progress, we should be clear-eyed about the road ahead. The United States is not going to eliminate emissions overnight. Entire sectors of the economy (heavy industry, aviation, shipping) will continue to emit even as we make rapid gains elsewhere.
The question, then, is not whether emissions persist in the near term. It is whether we have the tools and the will to manage them.
The answer should be straightforward: we build the energy system we need, and we clean up as we go. Carbon management and carbon removal are not side projects. They are essential infrastructure for a modern economy that intends to grow without accumulating unchecked costs. Technologies like direct air capture and mineralization, supported by policies like 45Q and increasingly integrated into carbon markets, allow us to reconcile expansion with responsibility.
Clarity drives cost down. Delay drives cost up. And when we act consistently, we create the markets, the innovation, and the industries that power the next American advantage.
Ultimately, affordability isn’t just today’s utility bill. It’s whether the system behind that bill is built to endure. A retreat on energy and emissions management would leave the system fragile, exposed to shocks, and ultimately more expensive.
The alternative is to build with intention: design policies that lower costs, attract investment, anchor new industries, and ensure the transition to a new energy system also builds stronger labor markets.
There is a coalition waiting to be built, not around ideology, but execution & results. It includes those focused on climate, those focused on competitiveness, and those who simply want an energy system that works. Some call it climate leadership. Others call it energy dominance. In truth, it’s the same goal: an America that produces more energy, more securely, more reliably, and at lower cost than anyone else.
The task now is not to scale back ambition, but to sharpen & clarify it: keep targets, strengthen tools, and ensure every part of policy delivers what people actually feel, lower bills, stable prices, and expanding opportunity.
Get it right, and we won’t just meet our climate ambition. We will build the most secure, most competitive, and most affordable energy system in the world.
And that is a standard worth setting, not running from.
About the Author:
Vikrum Aiyer is Head of Global Public Policy at Heirloom, where his team works to align climateenergy and climate policy, workforce development strategies, and legislative affairs to accelerate carbon mineralization sciences that can remove greenhouse gases from the air, in support of our global net-zero goals.management strategies and energy security initiatives. He also serves as a Berkeley Center for Law & Business Senior Fellow since 2024.