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electric vehicles
How to Take Advantage of the IRA Tax Credits Before Trump’s GOP Kills Them
The IRA won’t last a decade. Its funding starts running out at the end of September. So here is what individual Americans might want to do over the 165 days.
Jul 14, 2025
You may recall the amount of sweat, anguish, and resolve it took to pass the Inflation Reduction Act. There were the amazing young people of the Sunrise Movement, who channeled the energy of Greta’s worldwide outburst into the offices of Nancy Pelosi, energizing the 2020 primary race and then—in a remarkable display of political maturity—turning that energy into legislative sausage making. There was the steady morphing of the Build Back Better bill into ever-more compromised climate legislation, and then the widespread conviction that even that would not pass. Until at the last minute Joe Manchin agreed, as long as it was larded with yet more gifts for the fossil fuel industry. And with that Congress took its first real action on climate in the 35 years it’s been an issue.
It was supposed to be a steady source of funding that would last a decade, giving this energy transition time to find its feet, and giving the U.S. a foothold in the fight with China to determine the future. But in the course of a few months the White House and the fossil-funded GOP Congress have overturned all that except the extra gifts to the fossil fuel industry. (Antonia Juhasz provides the best account yet of all the excruciating details in Rolling Stone.)
The IRA won’t last a decade. Its funding starts running out at the end of September—if you’re in the market for an electric vehicle, that has to be done now. (And there may be some excellent lease deals). And if you’re even considering getting solar on your home, that needs to happen by the end of the year if you want the tax credit.
Normally we talk about these things as political questions—but today I asked a few experts to share their take on what individual Americans might want to do over the 165 days.
This summer and this fall are the right times to work with a trusted local provider to get your project up. If nothing else, it’s a good way to disappoint the GOP and their fossil fuel friend group.
Here’s Cindy del Rosario-Tapan, from the very experienced Solar United Neighbors (who are sponsoring a webinar later this week to go over the same ground and more)
- The impacts of this new law will be severe. We expect the solar market to shrink significantly and will readjust over time. It’s likely many companies will have layoffs or go out of business in the near-term.
- Our advice to homeowners is to act now:
- If you are a homeowner and planning to pay cash or finance your system through a loan, we highly recommend you go solar in 2025 to benefit from the tax credit and that you do so soon. Homeowners should proceed with caution and consult a tax adviser to determine the extent to which their project is eligible.
- The safest way to ensure your project will qualify for the tax credit is to have it “placed in service” before the end of 2025. “Placed in service” is a gray area, but a conservative interpretation would be when your system is ready to be connected to the grid.
My old 350.org colleague Phil Aroneanu has been hard at work at Climate United trying to protect what they can of the IRA funding. He breaks it down a little further:
If you're hoping to put solar on the roof of your home, and you want to own the system (not lease it), the 30% residential clean energy tax credit (25D) will sunset at the end of 2025, 10 years sooner than what was written into the Inflation Reduction Act.
If you own a business or nonprofit, or work at a school or city government agency and want to install solar OR you want to lease a solar array for your home rather than own it outright, you'll need to get started as soon as possible to qualify for the up to 60% investment tax credit (48E) and bonuses available. Onerous restrictions will kick in by the end of 2025 making it more difficult to claim the tax credits for projects that aren't yet under construction—and the Trump administration just released an Executive Order that will add even more red tape to these tax credits.
If you're hoping to buy and electric vehicle, the tax credits expire on September 30, and if you're planning to install heat pumps, windows, or take other energy efficiency measures, most of those tax credits expire at the end of the year.
And here’s Andrea Karelas from RE-Volv, a group that helps nonprofits go solar. (He’s also the author of the excellent Climate Courage), who analyzes it from the point of view of an average homeowner or project sponsor
So basically, before the big terrible bill, thanks to the IRA, if you went solar in the U.S., you got an Investment Tax Credit for your system worth 30% of the value (for storage as well) as a base amount and that credit would have been in place through 2032. So if your solar system cost $10K, you'll have $3K less taxes to pay next April, so essentially your system is only $7K. Then there are bonus adders that stack based on certain criteria. If your project is in an "energy community" (which basically is a place that has been historically impacted by fossil fuel production, or has many people working in energy production), you get an extra 10%. If you are in a low to moderate income community you are eligible for a 10-20% adder (but those are first come first serve). And if your equipment is made using majority domestic content (which is basically impossible) you'd get another 10%. So the solar ITC for residences (25d) or non-residential (48e) start at a minimum of 30% savings. If someone qualified for all the bonus adders, it would be 70% covered by the ITC. Many of our projects, for example, get 40 or 50% because they are in an energy community and serve an LMI population.
Now, thanks to the big terrible bill, the residential credit (25d) will expire Dec 31 2025. So basically your system price goes up by a minimum of 30% if you don't have it fully installed before January 1 2026. (And you could be missing out on up to 70% of the system cost covered if you qualify for the bonus adders.)
Now, the nonresidential credit (48e) on paper looks like it gets a better deal because you can theoretically get project construction started a year from when the bill was signed (so July 4 2026) or get it completed by the end of 2027. BUT they also added requirements regarding Foreign Entities of Concern to limit the use of Chinese parts or equipment that are so unworkable that it makes the ITC unusable, even with these extended timelines. The FEOC requirements kick in January 1 2026. So in essence, nonresidential projects now also have a December 31 2025 deadline.
All of this would be easier to navigate with devoted help from blue state officials: Here, for instance, is some good advice from NYSFocus on how New York Gov. Kathy Hochul could help, and some excellent analysis along the same lines from Noah Ginsburg. But I think the bottom line is clear—this summer and this fall are the right times to work with a trusted local provider to get your project up. If nothing else, it’s a good way to disappoint the GOP and their fossil fuel friend group.
While you’re doing that, of course, we also need to be standing up for clean energy in general. That’s why we’re hard at work on SunDay.
Part of that work involves the solar industry reinventing itself for the world past subsidies—which is not impossible. Its old model won’t work without federal support, but that’s not necessarily the end: Solar flourishes without much in the way of subsidy elsewhere, in places like Australia, because they’ve evolved a lower-cost business plan. Permitting reform is key (and a key focus of SunDay), as Ryan Kennedy makes clear in this piece from PV Magazine just yesterday:
Permit applications can cause delays of two to six weeks or more, causing a poor customer experience and higher project cancellation rates. Permitting also drives up costs. In New Jersey, for example, permit approvals and related barriers add an estimated $3,800 to $4,500 to average project costs. The Solar Energy Industries Association (SEIA) said the cost could be in excess of $6,000 to $7,000 for an average project.
New Jersey regulators, among other states, recently passed legislation to require automated permitting for residential solar, cutting timelines and costs. Tools like the Department of Energy’s (DOE) SolarApp+ can facilitate permitting in your jurisdiction, and DOE provides technical assistance for implementing the tool.
Birch estimates an average U.S. installation could shed $0.98 per W from automated permitting fixes alone.
Since that hasn’t happened yet, it doesn’t make the immediate blow any easier. As Aroneanu says:
Multiple recent analyses of the budget bill estimated that cutting clean energy and manufacturing tax credits will scale back solar and other renewable generation capacity by up to 72% in the next decade, raise household electricity prices up to $290, trigger the closure or cancellation of 331 solar and storage factories, and erase $286 billion in local investment in American communities, killing 760,000 jobs in the process.
Make no mistake: The Trump administration is doing everything in its power to try to kill clean energy.
Still, it seems impossible that American ingenuity won’t start to figure out some ways, especially since the rest of the world is surging confidently ahead. (Here, somewhat randomly, are updates from Turkey, Africa, and of course China). As Karelas says:
We know solar is the cheapest form of electrons ever created. Last year 90% of new generation built in the U.S. was clean energy, 78% of it solar. (No wonder they're coming after it this hard.) There are some in the residential space who are trying to make the most of the situation by saying, “Look, the industry had a nice cushion with these tax credits for many years.” Tax credits also made project financing more complicated—there's a world where the solar industry bounces back from this after cutting costs, streamlining various processes, and will be stronger than ever… So, light at the end of the tunnel, but definitely a terrible blow.
Our job is to magnify that (sun)light, shorten that tunnel, and not fall any further behind the rest of the world than we have to. So, to work on all fronts!
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Senate Dems Demand Explanation After Big Oil Lobbied for 'Giveaways at the Expense of American Families'
The fossil fuel industry spent big to push through a $1 billion provision in the GOP budget bill, which the senators said would allow some oil companies to "pay no federal income taxes whatsoever."
Jun 27, 2025
Four Democratic U.S. senators are demanding an explanation from Big Oil after a $1.1 billion tax loophole was added to the Senate version of the GOP's budget reconciliation megabill.
Letters sent Thursday by Sens. Elizabeth Warren (D-Mass.), Ron Wyden (D-Ore.), Sheldon Whitehouse (D-R.I.), and Chuck Schumer (D-N.Y.) called out the CEOs of two oil giants, ConocoPhillips and Ovintiv, which they say "lobbied furiously" for the handout.
The companies, the senators said, "[stand] to benefit tremendously from this provision and ha[ve] spent big to support it—while preserving the many government subsidies for the oil and gas industry already in the tax code."
They asked for the companies to disclose how much they have spent lobbying Republicans for the tax break and how much of a windfall they expect in return.
The provision in question, approved by the Senate Finance Committee last week, would shield many large oil companies from the Inflation Reduction Act's corporate alternative minimum tax, or CAMT. Introduced in 2022, the CAMT requires that companies making more than $1 billion pay 15% of the profits they report to shareholders.
"The rationale for CAMT was simple," the senators said. "For far too long, massive corporations had taken advantage of loopholes in the tax code to avoid paying their fair share, sometimes paying zero federal taxes despite earning billions in profits."
The GOP bill modifies how oil companies are required to report earnings, allowing them to exempt "intangible drilling and development costs," which in turn allows more companies to fall below the $1 billion earnings threshold.
The senators highlighted a 2023 earnings call by Marathon Oil, recently acquired by ConocoPhillips, in which executives said the CAMT was the only income tax they were required to pay.
"If enacted," the senators said, "this provision would reduce or even eliminate tax liabilities for oil and gas companies under CAMT, allowing some to pay no federal income taxes whatsoever."
The letter highlighted lobbying filings by ConocoPhillips and Ovintiv in which they "explicitly prioritize" securing this handout.
Referenced throughout is the aggressive effort to court Sen. James Lankford (R-Okla.), who wrote the loophole into the Senate bill. According to OpenSecrets, Lankford received more than $546,000 in campaign contributions from the oil and gas industry—his top source of industry donations—between 2019 and 2024.
The senators described the industry's lobbying as "especially insulting" because "Senate Republicans are trying to pay for this handout with cuts to other programs that would end up raising energy prices for everyday Americans."
The GOP bill would eliminate tax breaks for clean energy that incentivize consumers to purchase electric vehicles and make their homes more energy-efficient, including the home energy-efficiency and residential clean energy credits.
Citing data from Rewiring America, the senators estimated that ditching the two credits would cost the average household up to $2,200 per year in savings on utility bills.
The Center for American Progress projects that eliminating electric vehicle credits would increase demand for gasoline, raising prices by 27 to 35 cents per gallon by 2035. Americans will pay the oil and gas industry "an additional $339 billion for gasoline and $75 billion for electricity by 2035," the May report says.
"Congress should not raise energy prices for working families to deliver handouts to Big Oil," the senators said.
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The Power of Presidents—Even Trump—Is Nothing to the Power of Clean Energy Revolution
Ten years from now, Donald Trump will be remembered ruefully as our country’s very own King Canute, who used the full force of presidential power in a failed, futile effort to halt the tides of technological change.
Jun 20, 2025
He lived over 1,000 years ago, but King Canute’s life still has some important lessons for our own time. After conquering England, Denmark, Norway, and part of Sweden, he forged a vast North Sea empire that made him, by the year 1030, the greatest of all the Viking kings. At that peak of power, he ordered his courtiers to place a throne on the seashore. There, according to a contemporaneous account, he shouted at the rising tide: “Thou, too, are subject to my command, as the land on which I am seated is mine and no one has ever resisted my commands with impunity. I command you then not to flow over my land, nor presume to wet the feet and the robe of your Lord.”
But the tide, of course, kept rising and waves soon washed over the legs of his royal person. Stunned and chastened, Canute leapt backwards, saying, “Let all men know how empty and worthless is the power of kings.”
In our time, specifically on January 20, 2025, Donald Trump, who had vanquished his rivals, took office with full control of Congress, making him an exceptionally powerful president. On that day, he ordered his courtiers to set up an executive desk at the Capital One Arena in downtown Washington, D.C. There, before waves of cheers from MAGA-capped supporters, he commanded that the U.S. quit the Paris climate accord, announcing: “We are going to save over a trillion dollars by withdrawing from that treaty.”
In March, despite Donald Trump’s many prohibitions, wind and solar surged to 25% of the U.S. electrical supply, and when combined with other forms of “clean energy” like hydropower, already generated 51% of the country’s total electricity output, surpassing fossil fuels for the first time.
Retiring to the Oval Office, he then signed another executive order eliminating “the electric vehicle (EV) mandate” by ending “unfair subsidies and other ill-conceived government-imposed market distortions that favor EVs over other technologies.” More broadly, that decree also removed any barrier to the development of “domestic energy resources—with particular attention to oil, natural gas, coal, hydropower… and nuclear energy resources.”
Like King Canute before him, President Trump was attempting to do nothing less than command the tides to recede. Not the ocean tides, of course, but the no less powerful tides of economic and technological change. For the United States, and indeed the world, is at the cusp of a new industrial revolution in the way we live and work that will, within the coming decades, do nothing less than save humanity from the rising threat of global warming.
America’s Energy Transitions
To grasp the full import and unstoppable power of this impending change, let’s take a moment to place our current era in its historical energy context. Over the past 500 years, as I argued in my book To Govern the Globe, human life has been transformed by three great revolutions in the basic energy infrastructure that drove the global economy and shaped all human life on this planet.
Starting in the 16th century, European nations forged the world’s first maritime empires through technologies that maximized the power of nature’s raw energy. In the era’s first technological advance, Portugal’s agile sailing ship, the caravel, used multiple sails to master the winds and thereby conquer sea lanes from the South Atlantic to the South China Sea. Somewhat later, the Dutch district at Zaan (near Amsterdam) became the world’s first dedicated industrial zone, where 150 powerful windmills cut logs into low-cost lumber for shipyards that would build the world’s largest merchant fleet with 4,000 ships on the high seas. Starting in the 15th century, Portugal combined water mills with massed teams of enslaved laborers on the island of São Tomé off the coast of Africa to create a new form of agribusiness, the fazenda or sugar plantation, whose phenomenal profitability—achieved by using cruel coercion to push the energy output of the human body beyond its natural limits—soon led to the spread of slavery to Brazil, the Caribbean, and the American colonies.
During the 19th century, Britain’s coal-fired industrial revolution brought an energy transition that would move the world quickly beyond the wind and muscle power of the previous four centuries. Steam engines started powering factories in 1786, riverboats in 1810, railways in 1829, trans-Atlantic steamships by the 1830s, and the British Royal Navy’s warships by the 1840s. Meanwhile, Britain’s coal production soared from just 9 million tons in 1800 to a peak of 292 million tons in 1913. By the 1850s, an armada of steam engines was transforming the nature of work worldwide—powering factories, driving sawmills, threshing grains, husking rice, pulling gang plows, and crushing sugarcane. Coal-powered construction equipment sculpted the Earth’s surface, as steam shovels (patented in 1839) moved mountains, steam dredges (1844) cut canals, and steamrollers (1867) flattened roadways. Between 1880 and 1900, the number of steam engines in the United States tripled from 56,000 to 156,000, accounting for 77% of all the power that drove this country’s first industrial revolution.
That era of coal-fired energy, for both steam engines and electrical generation, lasted for nearly a century until it, too, began to fade during the 1950s before the power of petroleum. Even on the eve of World War II, when the United States produced two-thirds of the world’s petroleum, oil accounted for only one-third of its energy supply and just 10% of that of other industrial societies like Europe and Japan. However, as American automobile ownership climbed from 40 million units in 1950 to 213 million in 2000, oil consumption surged from 6.5 million barrels daily to a peak of 20 million barrels. By the time the 1973 Organization of the Petroleum Exporting Countries (OPEC) oil embargo roiled American life, with gas lines of angry motorists wrapping round the block in cities across the country, oil accounted for 46% of total energy needs in the U.S., 60% in Western Europe, and an overwhelming 73% in Japan.
The Seeds of Change
After those three energy transitions over the span of 500 years, the world is now at the cusp of a fourth great transformation that will indeed prove critical for humanity’s survival. Energy from coal and oil may have freed the world from the curse of slavery and brought unprecedented prosperity to millions, but burning all that carbon also carried the threat of climate change. As early as 1896, Swedish physicist Svante Arrhenius published the world’s first report on global warming, predicting with uncanny prescience that a continued increase in carbon (CO2) emissions would raise “the temperature in the Arctic regions… about 8-9°C.” Between the Rio Earth Summit that finally recognized the problem in 1992 and the United Nations Climate Change Conference in Paris in 2015, where 195 nations signed an agreement to limit CO2 emissions, the world started a fitful and initially unsuccessful transition to alternative energy.
At the outset, it seemed as if governments were trying to force a shift to alternative energy that carried high costs for questionable results. Solar panels were expensive then and their energy output was low. The few electric-powered cars cost a relative fortune and couldn’t go very far. By 2016, the climate issue had also become bitterly partisan, with the first Trump administration banning the federal government from any mention of climate change while trying desperately to save coal-fired electrical plants and introducing 74 executive actions to weaken environmental protections.
Now that technology has resolved so many of the cost constraints holding back the world’s transition to alternative energy, it’s possible to grasp the shape that America’s new industrial revolution is likely to take within a decade or even less (no matter who is the president of the United States).
But as had happened during the world’s earlier energy transitions over the past 500 years, technological innovation was already fusing with economic rationality to catalyze a phenomenally powerful transformation in the world’s energy infrastructure. After solar and wind power began spreading across the globe around 2000, engineering innovation and economies of scale began making alternative energy not only ever more affordable but also ever more efficient. Between 2010 and 2019, the cost of solar power fell by 82% from $0.37 per kilowatt hour to just $0.05. By 2020, the International Energy Agency, known for its rigorous analysis, reported that the world’s best solar schemes already had the “cheapest… electricity in history.”
By the time Joseph Biden took office in 2021, the tides of technological change were just starting to turn. In a bid to ride that tide, the Biden administration invested a massive $1 trillion in “clean energy”—including semiconductor manufacturing ($446 billion), clean power ($188 billion), and electric vehicles ($182 billion).
Despite all the Biden-Harris election hype about factories built and jobs created, the gains for the country’s energy infrastructure were still… well, distinctly incremental. By the end of Biden’s term in December 2024, wind and solar had inched up to just 17% of U.S. electrical generation, though they had finally passed coal, that dirty fuel left over from the horse-and-buggy era, which fell to a historic low of 15%. Simultaneously, however, natural gas surged to a record 43% of the U.S. energy supply, meaning that carbon was still king. Compared to Norway where a proliferation of 400 chargers for every 100,000 Norwegians has allowed EVs to hit 90% of new car sales, even leading American states like California still only have a pathetic 46 chargers per 100,000 population—a key reason EVs still account for just 8% of this country’s new auto sales.
But beneath such dismal statistics, by the end of Biden’s term there were also some significant signs of deep, underlying change. In September 2024, an industry group reported that solar energy, which had been four times more expensive than fossil fuels in 2010, was now less than half the cost (56% lower) than them.
Portents of a New Industrial Revolution
Despite all the political (and climate change) pyrotechnics of Trump’s tumultuous first months in office this year, those deeper processes of technological change have continued their ceaseless, mechanistic march toward transformation. Indeed, in recent months there have been some telling signs—veritable portents—that we are indeed at the cusp of a transition to alternative energy of sufficient power to drive a new American industrial revolution. Let’s read the tea leaves.
In April, the first driverless 18-wheeler “robotruck” appeared on a U.S. highway, delivering refrigerated goods along Interstate 45 in Texas. In May, Elon Musk announced the debut of Tesla’s “cyber cab” service in Austin, Texas, with 10 driverless trial cars that are expected to lead to the deployment of “hundreds of thousands of robotaxis across the U.S.” Lending substance to that claim, Alphabet’s competing Waymo taxi service announced in May that its paid driverless rides had doubled to 10 million in the previous five months, launching the company on “a path to profitability.” Within days, China’s top EV car maker BYD had dropped a “price bombshell” by slashing the sticker price on its top-selling Seagull subcompact to an amazingly low $7,700—and that, mind you, is for a brand-new sedan loaded with self-driving features and able to travel a 200-mile range on a single charge. These days in America, it would be hard to beat that price with any sort of gas-powered car, even, say, a 2012 Honda Civic with 150,000 miles on the clock.
But perhaps most important, in March, despite Donald Trump’s many prohibitions, wind and solar surged to 25% of the U.S. electrical supply, and when combined with other forms of “clean energy” like hydropower, already generated 51% of the country’s total electricity output, surpassing fossil fuels for the first time. “This is a first signal,” explained energy analyst Nicolas Fulghum, “that the U.S. is approaching a tipping point where clean power takes the lead over fossil generation, and where the importance of coal and gas inevitably starts to fade.” Indeed, just this month, the authoritative International Energy Agency announced that the “global energy investment scene is changing fast,” with two-thirds of this year’s $3.3 trillion investment in energy production slated for “renewables” (such as wind and solar), double the amount for fossil fuels.
The Shape of the Future
If that impending transformation follows the pattern of history’s past transitions, technology and the global economy are about to achieve a sudden, silent synergy that will unleash not just a tide but a veritable tsunami of socioeconomic change. To cite some past examples, within the 15 years after George Stephenson launched The Rocket, a steam locomotive with an average speed of just 13 miles per hour in 1829, Britain covered the country with 2,200 miles of rail lines, transforming English life and work. And in the 10 years after 1907-1908, when Henry Ford upgraded the mass production of his Model-T motorcar, the price for it dropped steadily from $850 to just $260 while the number of automobiles registered nationwide soared from 140,300 in 1907 to nearly 5,000,000 in 1917, putting America on the road to becoming a petroleum-powered nation on wheels.
Now that technology has resolved so many of the cost constraints holding back the world’s transition to alternative energy, it’s possible to grasp the shape that America’s new industrial revolution is likely to take within a decade or even less (no matter who is the president of the United States). After rendering high-cost fossil fuels largely obsolete by 2035, solar and wind power, backed by storage farms equipped with new safer technologies like sodium-ion batteries, will create a reliable electrical grid, cutting the country’s basic energy costs by well over half and sparking a proliferation of innovation.
In the decades to come on our interstate highways, the left lanes will undoubtedly be filled with endless packs of a dozen or more electric-powered, driverless 18-wheelers, drafting six feet apart. They will be guided by uninterrupted digital signals transmitted from fiber optic cables laid down along the median strip, slashing both fuel consumption and transport costs. Those semi-trailer platoons will be headed for massive distribution depots that are likely to ring American cities, large and small. From them, drivers will be dispatched with robot-packed loads for the delivery of foodstuffs and consumer goods direct to individual households. Those truckloads will also include things like factory-produced complete kitchens and bathrooms for on-site installation at mass-assembly construction sites—slashing costs and making housing once again more affordable for working Americans.
Since an EV is simply a steel box housing a battery, for about $9,000 an American family will be able to purchase a brand-new, self-driving sedan with a 600-mile range from a single 10-minute charge, providing maintenance-free transportation for a typical monthly fuel cost of about $35. With the electrical grid generating cheap solar power, every urban hub will be connected to its suburbs by electrical rails and to its own neighborhoods by electrified mass transit. Once downtown, commuters will move about easily, freed from the stress and cost of parking by fleets of robotaxis that will move quickly through inner-city streets no longer jammed with private cars. Their only competitor for curb space will be the flotilla of delivery vehicles whose drivers will circulate ceaselessly about the city, fulfilling same-day orders.
With the world’s lowest cost for critical inputs of energy and transportation, combined with the most extensive grid of fiber optic cables, the United States will hold the pole position in the ceaseless race for international competitiveness. Once modern history’s fourth great transformation takes hold and that new energy infrastructure is in place, productivity, profits, and global power will soon follow on a far healthier and cooler planet. With domestic transport costs but a fraction of those for international shipping, the economic logic of “nearshoring” will become inescapable, making “Made in the USA” compellingly economical and creating countless new jobs that could strain the country’s labor supply.
Oh yes, and I almost forgot: all that technology will, of course, be emissions-free and so will bring America close to net-zero carbon emissions well before the 2050 date mandated by the 2016 Paris climate accord.
America’s King Canute
Ten years from now, Donald Trump will be remembered ruefully as our country’s very own King Canute, who used the full force of presidential power in a failed, futile effort to halt the tides of technological change that, by then, will have launched this country headlong into the world’s new industrial revolution.
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