2025 U.S. State Climate Policy Trends: Not All Bad

Moving into 2025, U.S. state-level climate policies are gaining momentum as described in the recent online seminar hosted by Climate XChange.

The online seminar hosted experts including Ava Gallo, National Caucus of Environmental Legislators; Ruby Wincele, Climate XChange; and Alicia Zhao, Center for Global Sustainability. Slides are here.

Key Trends

• Polluter Pays Legislation: Polluter Pays holds companies accountable for their emissions and impacts on communities through charging them for climate-related damages. States are now utilizing Polluter Pays to garner funding for sustainability initiatives. In 2024, Vermont and New York enacted climate superfund legislation. In 2025, ten states have followed suit and introduced their own “polluter pays” bills, including Connecticut, Massachusetts, New Jersey, Oregon, California, Maryland, Rhode Island, Hawaii, Illinois, and Virginia.

• Transmission Trends: The U.S. transmission grid is regulated at the federal level, but states can also manage energy demand via modernizing transmission and bettering policies. There have been trending topics in state legislatures that promote these grid-enhancing technologies, also known as GETs. These states include Rhode Island, Connecticut, New York, New Jersey, Maryland, Virginia, Indiana, Illinois, Oklahoma, New Mexico, Colorado, Utah, Montana, Oregon, and Washington. Other states have pursued citing and permitting reforms, like New York, Maryland, Illinois, Rhode Island, Colorado, and Washington.

• Microgrids and Virtual Power Plants (VPPs): These tested tools promote grid resilience, energy independence, and renewable energy resulting in grid stability.

• Electricity Trends: Along with new technologies in the grid, there have been emerging technologies in the form of microgrids and virtual power plants (VPPs). These new technologies can help the US turn towards renewable energy and prepare for extreme weather events. States like New Hampshire, Massachusetts, Connecticut, New York, New Jersey, Maryland, Virginia, Illinois, Texas, New Mexico, Washington, Oregon, and California have introduced bills to innovate with these technologies.

• DOT Reform: There have also been moves to reform Departments of Transportation (DOTs) across states. Colorado and Minnesota spearheaded this in 2021 and 2023, respectively, requiring their DOTs to evaluate potential climate change projects based on their contributions to mitigation and vehicle miles traveled (VMT). States like Massachusetts, Illinois, Maryland, and New York have introduced bills for DOT change.

• Community Solar: Community solar is an energy deployment model that distributes solar energy to multiple customers, like individuals, businesses, or nonprofits. Those customers would share the benefits of a single off-site solar system, receiving credits on their electricity bills for the energy generated by their share. States like Georgia, Indiana, Iowa, Missouri, Montana, and West Virginia are establishing community solar programs, and states like California, Connecticut, Maryland, Minnesota, New Hampshire, New Jersey, New York, Oregon, Virginia, and Washington are aiming to expanding existing community solar programs.

• Utility Reform: There are 12 bills across 8 states that would prohibit utilities from charging their customers for political spending.

With federal rollbacks in climate change and the recent EPA rollbacks that Responsible Alpha has discussed in a previous blog, there have also been many opportunities to create a high impact in climate mitigation. As Alicia Zhao pointed out in the presentation, there are the following key opportunities.

Opportunities

• Enhanced state-level renewable and clean electricity targets.

• Widespread adoption of California's EV sales targets.

• Vehicle miles traveled reduction policies.

• Oil and gas methane intensity standards.

• Increased waste diversion efforts.

• Building efficiency and electrification standards.

• Industry carbon capture and sequestration targets.

Risks

However, there are also challenges to implementing these state climate policy opportunities.

• Legal and Regulatory Hurdles: There are ongoing legal battles at the state and local levels that create many obstacles for sustainability initiatives. More recently, there has been increased uncertainty at the federal level.

• Policy Implementation Challenges: Even if new policies are implemented, ensuring they are adopted and enforced for a significant period time poses problems.

• Strengthening Regional Collaboration: Even if new policies are implemented and enforced, there needs to be increased regional collaboration between states to ensure that these policies can be extended as large-scale climate solutions.

• Cross-Sector Partnerships: There also needs to be a strong collaboration between the states and federal government. Without this, miscommunication is likely, and sustainability initiatives might take a turn for the worse.

Call to Action

As states continue to explore options in mitigating climate change in 2025, the policies and trends discussed above highlight significant progress in the fight against global warming. However, with federal uncertainty and legal hurdles, leadership in the state is still needed. We must implement stronger policies and foster collaboration to ensure long-term enforcement of sustainability initiatives. The road ahead is bright, but it requires commitment and collective action. Fortunately, 2025 presents us an opportunity to make lasting progress.