Can the Inflation Reduction Act Survive an Onslaught of “Death Star” Bills?

Texas Governor Greg Abbott in 2012. Photo courtesy of Gage Skidmore.

In June 2023, Texas Governor Greg Abbott signed HB 2127, eliminating municipal authority over eight different policy areas: agriculture, business and commerce, finance, insurance, labor, natural resources, occupations, and property. Critics called it one of the biggest power grabs by the state in recent history, dubbing it the “Death Star” bill due to its destruction of municipal jurisdiction. HB 2127 may be shocking, but it is neither random nor isolated. Rather, it is but one example of a long trend of Republican state legislatures seeking to prevent municipalities from pursuing progressive policy agendas. Not only is this “new preemption” worrying in its own right, but it could prove detrimental to the implementation of the Biden Administration’s climate policies, hurting U.S. carbon reduction efforts. As these preemptive efforts continue in red states across the country, a crucial question arises: can the Inflation Reduction Act—the biggest federal investment in climate change infrastructure in U.S. history—survive an onslaught of “Death Star” preemption bills? 

State preemption is a legal concept which gives states the right to strike down municipal laws that contradict state legislation. Preemption emerged in the 1970s and was used sparingly for most of its history as a way to maintain checks and balances between states and cities. A major shift in state preemption occurred in the 2010s, following a massive increase in the number of Republican representatives and conservative lobbying groups in state legislatures. This shift, called “new preemption” by legal scholar Richard Briffault, has seen Republican state legislatures using preemption to impose political agendas, broadly curtailing municipal authority and punishing cities that pass progressive legislation. Since state legislatures tend to over-represent rural, Republican populations, “New preemption” enables Republicans at the state level to nullify progressive policies in the left-leaning cities where they have little electoral presence, weaponizing political geography to silence democratically-elected local officials. 

“New preemption” has been continuing ever since its inception in the 2010s. The Local Solutions Support Center, a think tank dedicated to protecting municipal rights, found that a majority of the 467 preemptive measures introduced in state legislatures in 2021 came from Republican states. Moreover, their analysis of the 2022 legislative session documented an increase in the scope of preemption, as several preemption bills that targeted a broad range of policy areas gained traction in Republican state legislatures. When contextualized in the history of preemptive bills, the Texas “Death Star” bill can be seen as a single instance of a decades-long trend toward using preemption as a political strategy to nullify Democratic policies on the municipal level. While the increased scope of preemption bills is concerning in and of itself, research has shown that preemption can have a chilling effect on municipal policies as cities become hesitant to pass measures that might embroil them in expensive legal battles, creating yet another barrier to municipal policy-making in addition to explicit preemptive strikes. 

Against this backdrop of power struggles over municipal authority, the Biden Administration has signed some of the most ambitious climate initiatives in recent history, making climate action a priority for the Democratic Party. The most consequential of these federal climate initiatives is the Inflation Reduction Act (IRA), the single largest investment in U.S. climate resilience in history. Democrats passed the IRA as a budget reconciliation bill to side-step a Republican filibuster, so it lacks substantial regulatory provisions and instead relies exclusively on incentives to local governments, especially municipalities, to implement its agenda. In total, $394 billion in federal climate grants are available to municipalities over a myriad of different policy areas, such as programs like the Gas Reduction Fund and Climate Pollution Reduction Grants. Hypothetically, this is perfect cooperative federalism. Most major municipal governments in the U.S. support climate change initiatives, almost guaranteeing widespread municipal mobilization for federal grants. Moreover, cities are crucial to climate mitigation more broadly, as they hold a disproportionate amount of the country’s population and economic activity, thus municipal incentives should be extremely effective.

In practice, preemption is creating an insurmountable barrier for municipalities attempting to use federal funds to fight climate change. Some preemption bills that limit IRA programs originated in the years leading up to the IRA’s passage, demonstrating how preemption was a long-standing Republican political tactic prior to major federal climate investments. From 2021 to 2023, 24 states, mostly Republican-led, have passed preemption bills that forbid cities from enforcing green building code standards, effectively cutting off all building retrofitting grants from the IRA. In Idaho, state Republicans struck down a Boise initiative to raise funds for public transit improvements, which could complicate the federal public transit grant process. In 2022, both Kansas and Florida passed state laws that limited municipal authority in regulating energy. 

Within just one year after the IRA’s passage, two major preemption bills in the two biggest red states, Texas and Florida, threaten to nullify billions of dollars for multiple federal initiatives. The Texas “Death Star” bill, given its limitation on municipal energy regulation and natural resource use, could leave cities without the authority to receive port clean-up grants and green energy grants for municipal energy companies. SB 170 in Florida encourages businesses to sue municipalities over local ordinances, giving private entities their own outlet to fight environmental laws, which could target a wide range of IRA programs. Pre-existing laws are already damaging IRA effectiveness, and the predicted trends of intensified preemption among state legislatures indicate that there are many more legal battles to come as the IRA gets implemented over the course of the next decade.

The implementation of the IRA is perhaps the most important action to meeting U.S. climate goals, not only because the IRA is the biggest investment in U.S. climate infrastructure in history, but also because recent Democratic losses in Congress and the upcoming 2024 Presidential Election suggest federal funding for climate goals is unlikely to come again—at least at current levels—in the foreseeable future. A potential second-term Trump presidency, which, if Trump’s track record is any guide, would be characterized by wanton disregard for the climate. However, even if Biden secures a second term, the IRA’s passage depended on unified Democratic control of Congress and concessions from Senator Joe Manchin of West Virginia. Political analysts predict that unified Democratic control of Congress is unlikely in the next few years. Moreover, Manchin announced his retirement in November, making climate negotiations trickier as Democrats are predicted to lose their West Virginia seat. 

Cities bear an outsized burden in the fight against climate change. Nevertheless, Republican state legislatures are actively stripping away their authority to address climate change, undermining crucial climate wins on the federal level in the process. Municipalities have been fighting back in aggressive legal struggles against abusive preemption. However, the preemption appeal process structurally advantages states, rendering cities with few bulwarks against state consolidation of power. With each passing year, preemption becomes a bigger, scarier threat to cities, undermining the basic fabric of federalism. The one year anniversary of the Inflation Reduction Act coincides almost exactly with the passage of Texas HB 2127, serving as a grim indication of the legal battles that will almost certainly characterize our nation’s response to climate change moving forward.

Kira Schwegler (BC ’27) is a staff writer for CPR studying economics and urban studies. When she isn’t roller skating or cooking, you can find her at any given art museum in New York City.