Supply, demand and polarization challenges facing US climate policies

Abstract

The United States recently passed major federal laws supporting the energy transition. Analyses suggest that their successful implementation could reduce US emissions more than 40% below 2005 levels by 2030. However, achieving maximal emissions reductions would require frictionless supply and demand responses to the laws’ incentives and implementation that avoids polarization and efforts to repeal or undercut them. In this Perspective, we discuss some of these supply, demand and polarization challenges. We highlight insights from social science research, and identify open questions needing answers, regarding how to address these challenges. The stakes are high. The success of these new laws could catalyse virtuous cycles in the energy transition; their failure could breed cynicism about major government spending on climate change. Recent US climate bills mark a major step in domestic climate actions, while their successful implementation relies on strong assumptions. This Perspective discusses potential challenges regarding supply, consumer demand and political polarization and how insights of social science could help to overcome these challenges.