Creating an Equitable and Durable US Climate Policy

The document argues that current US climate policy reinforces inequities and risks political instability by placing the costs of transition on energy customers and workers. It proposes five objectives: decreasing energy burdens through flexible tax credits, driving growth via a 'transition tax credit' for carbon productivity, expanding Department of Energy Loan Programs Office (LPO) financing to manage legacy fossil asset risks, increasing funding for the reclamation of fossil fuel sites, and prioritizing the retirement of assets causing the most health harm.

• Current US tax credits for clean energy are inefficient because many utilities owning 75% of remaining coal capacity either do not pay taxes or have existing credits, and 'tax normalization' rules prevent the full benefit of the investment tax credit (ITC) from being passed to customers.
• RMI proposes a 'transition tax credit' (TTC) to reward 'carbon productivity'—the ability to produce economic goods and services with fewer emissions—verified through the EPA's Greenhouse Gas Reporting Program over a 12-year period.
• The cost of retiring coal plants has increased significantly, with the net book value of a typical plant more than doubling since 2005; currently, 80% of US coal generation has no retirement date or is scheduled for after 2030, representing $129 billion in book value.
• The Department of Energy's Loan Programs Office (LPO) should expand its mission beyond commercializing new technologies to provide financial tools—such as loan guarantees for ratepayer-backed coal transition bonds—to help asset owners retire fossil infrastructure.
• Federal reclamation programs for fossil fuel sites are currently underfunded and fail to incentivize the reuse of infrastructure; RMI suggests matching federal funding for private reclamation and requiring the rehiring of displaced energy workers.
• Climate policy should prioritize the transition of assets that cause the most health and economic harm, potentially monetizing these benefits through a preventative healthcare approach or by integrating them into the transition tax credit.

APA

Varadarajan, U., Serrurier, B., Posner, D., & Mardell, S. (2021). Creating an Equitable and Durable US Climate Policy. RMI. https://utilitytransitionhub.rmi.org/static/rmi_creating_an_equitable_and_durable_us_climate_policy.pdf

Chicago

Varadarajan, Uday, Ben Serrurier, David Posner, and Sam Mardell. Creating an Equitable and Durable US Climate Policy. RMI, 2021. https://utilitytransitionhub.rmi.org/static/rmi_creating_an_equitable_and_durable_us_climate_policy.pdf.

Wikipedia

{{cite report |last1=Varadarajan |first1=Uday |last2=Serrurier |first2=Ben |last3=Posner |first3=David |last4=Mardell |first4=Sam |title=Creating an Equitable and Durable US Climate Policy |publisher=RMI |date=June 2021 |url=https://utilitytransitionhub.rmi.org/static/rmi_creating_an_equitable_and_durable_us_climate_policy.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{varadarajan2021creating, author = {Varadarajan, Uday and Serrurier, Ben and Posner, David and Mardell, Sam}, title = {{Creating an Equitable and Durable US Climate Policy}}, institution = {RMI}, year = {2021}, month = jun, url = {https://utilitytransitionhub.rmi.org/static/rmi_creating_an_equitable_and_durable_us_climate_policy.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }