3 ways Minnesota is crushing it on climate action

The Midwestern state has passed a barrage of policies in recent days and months meant to cut carbon emissions from the state’s buildings, cars and electricity system.
By Maria Gallucci

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A large white neoclassical-style government building with a golden cupola surrounded by trees
The Minnesota State Capitol building (Stephen Maturen/Getty Images)

Minnesota is having a blockbuster year for climate policy. In recent days, the Midwestern state adopted a series of ambitious laws designed to slash greenhouse gas emissions, adding to the momentum kicked off by the 100 percent clean electricity standard enacted in February.

Policy advocates and community groups have been pushing to pass some of the measures for decades. Proponents say the recent surge in federal climate funding — including through 2022’s Inflation Reduction Act — laid the groundwork to get emissions-fighting legislation over the finish line in Minnesota. Climate action has also seen unprecedented support from the governor’s office and both houses of the state legislature, which are all controlled by Democrats.

So much happened so fast in 2023,” said Justin Fay, a policy strategist for the clean energy advocacy group Fresh Energy in St. Paul.

We had pretty high expectations coming into this [legislative] session, and we just completely blew those out of the water,” he said during a Tuesday webinar, a day after the Minnesota legislature adjourned for the year.

A similar sense of clean-energy momentum is building in other states. Earlier this month, Colorado Governor Jared Polis (D) signed bills allocating as much as $120 million in new tax credits annually through 2032 to boost the adoption of electric vehicles, heat pumps and electric lawn equipment. Vermont’s legislature recently enacted a clean heat standard” that could dramatically reduce the state’s reliance on burning petroleum products to heat homes.*

In Minnesota, Governor Tim Walz (D) has signed laws that set stringent energy-efficiency standards for new commercial buildings, require public agencies to procure low-carbon construction materials, and enable Minnesota cities to access $190 million in energy-related funding through a new competitiveness” fund.

Here’s a look at three of the top measures that are driving Minnesota’s climate ambitions.

1. A $2 billion climate and environmental package 

On Wednesday, Gov. Walz signed a budget package that includes a raft of IRA-reminiscent incentives for electrifying homes, vehicles and public buildings. The package was among the 12 bills included in a $72 billion budget deal that will fund the state government for the next two years.

More than $30 million is allotted in the state budget for installing rooftop solar panels on schools and other public buildings. Another $10 million is set aside for grid improvements to help reduce wait times and clear backlogs for customers looking to interconnect small-scale solar arrays to the utility distribution grid.

A $16 million electric-vehicle rebate program provides $2,500 in point-of-sale rebates for drivers buying new models and a $600 rebate for used EVs. Auto dealerships can also get grants to help install EV-charging infrastructure on their properties. Another $13 million will help school districts replace their diesel-burning vehicles with electric school buses.

For the most vulnerable among us, children who have developing hearts and lungs, breathing in diesel fumes is just a huge public-health issue,” Anna Johnson of Fresh Energy said on Tuesday’s webinar. So investing in public school buses is a huge win.”

The budget package includes $13 million in grants and rebates to help homeowners install electric heat pumps, plus another $6.5 million for upgrading electric panels to support the added electricity load from heat pumps, induction stoves and electric cars.

Another $20 million will fund Minnesota’s green bank,” which separately received $25 million from a jobs and economic development law that the state passed this week. Green banks use state and federal funds to supply low-cost, long-term financing for clean-energy projects that would otherwise struggle to get it.

2. A $1.3 billion boost for public transit and e-bikes 

Minnesota’s governor also signed a transportation bill on Wednesday that could help reduce pollution from the state’s cars and trucks. Transportation accounts for about one-fourth of Minnesota’s planet-warming emissions every year, making it the largest source.

The law includes two measures to boost funding for Minnesota’s public-transit systems and bicycling infrastructure. The first, a 5-cent increase to the state’s gasoline tax, is expected to generate around $155 million over two years. The second provision raises sales taxes in the seven counties that make up the Minneapolis–St. Paul metro area, while also adding a 50-cent fee on deliveries over $100.

Critics of the measures, including Republican lawmakers, have warned that the tax increases will hurt residents who are already struggling financially, the Star Tribune newspaper reported. But proponents of the policy say it will fund much-needed, long-overdue improvements to the state’s roads, bridges and railways.

Along with tax and fee increases, the transportation package also allots hundreds of millions of dollars to expand passenger rail service, improve safety on trains and buses, and overhaul a multimodal transportation hub near the state Capitol building in St. Paul. Electric-bike buyers will be able to snag credits worth up to $1,500, while regional planners will be required to study extending a popular bike path in the Twin Cities metro area.

People don’t have to have cars to get around if they have good transit,” Michael Noble of Fresh Energy said on Tuesday’s webinar. There’s nothing more equitable, more just, more climate-friendly than that.”

3. A 100 percent clean energy mandate

The two new laws follow in the footsteps of an earlier, equally ambitious climate policy. In February, Gov. Walz signed legislation that requires the state’s power utilities to use 100 percent clean electricity by 2040.

The law established two mandates for electric utilities operating in the state. The first instructs utilities to get 55 percent of their energy supply from renewable sources by 2035, including wind and solar power. The second measure requires utilities to get 100 percent of their power from carbon-free sources by 2040 — a category that includes a broader mix of sources, such as hydropower, nuclear, hydrogen power and biomass from burning wood and trash.

Minnesota seems well on its way to meeting those targets. In February, about 40 percent of the state’s electricity generation came from renewables, primarily wind power, according to the latest data from the U.S. Energy Information Administration. Two nuclear power plants supplied over 27 percent of electricity generation. Coal-fired and gas-fired power plants provided 17 and 16 percent of electricity, respectively, in February.

Noble noted that while the state’s utilities didn’t actively support the 100 percent clean electricity legislation earlier this year, they also didn’t lobby against it at the time.

That’s a dramatic statement,” he said. This isn’t a dangerous, expensive, risky blackout’ bill, which some partisans call it, but sensible, practical public policy that our utilities are comfortable with.”

*Correction: This article originally misstated the total value of Colorado’s newly enacted tax credits. We regret the error.

Maria Gallucci is a senior reporter at Canary Media. She covers emerging clean energy technologies and efforts to electrify transportation and decarbonize heavy industry.