The following commentary was written by Olivia Ashmoore, a policy analyst at Energy Innovation, and Ashna Aggarwal, an associate at RMI. See our commentary guidelines for more information.

Climate leadership in Minnesota, Michigan, and Wisconsin could revitalize the Midwest. And the timing couldn’t be better.

The Inflation Reduction Act (IRA) is the biggest clean energy investment in American history, generating tremendous opportunity for pro-climate state officials to pass bolder policy and take advantage of billions of dollars in new federal investments in clean energy technologies.

Recent Energy Innovation Policy & Technology LLC and RMI modeling using the new state Energy Policy Simulators finds just five policies can effectively cut emissions in any state—even those with quite different greenhouse gas (GHG) emissions sources. The analysis also shows adopting strong climate policies would boost local economies, create jobs, and protect public health. The most impactful policies are: clean electricity standards, zero-emission vehicle standards, clean building equipment standards, industrial efficiency and emissions standards, and standards for methane detection, capture, and destruction.

In Minnesota, Michigan, and Wisconsin, adopting these five policies would help achieve climate targets and boost GDP, though the most impactful policies vary by state. By 2050, Minnesota’s GHG emissions could drop by 50% below 2005 levels, Michigan’s by 85%, and Wisconsin’s by 80%.

Minnesota: A rising clean energy star

In Minnesota, policymakers committed to climate action took office this January, resulting in passage of a new law requiring 100% carbon-free electricity by 2040. Thanks to recent coal power plant retirements, Minnesota was already on track to meet its GHG reduction goals for 2025. Now, a faster clean energy pace will help the state reach its goals of slashing emissions 80% below 2005 levels by 2050. However, the modeling shows the state will also need to tackle transportation, industry, and agriculture emissions.

Using the new Minnesota Energy Policy Simulator, Energy Innovation and RMI find adopting the top five policies would cut emissions in these sectors to achieve economy-wide reductions of 50% below 2005 levels by 2050 — major progress toward the state’s goal. These five policies would also stimulate Minnesota’s economy, adding more than 30,000 new jobs in 2030, 100,000 new jobs in 2050, and growing GDP 2.4% in 2050.

In 2020, transportation was the largest source of in-state emissions and industrial emissions are projected to rise through 2050. The modeling shows joining other states in following the new Advanced Clean Cars II standard (ACC II), requiring 100% of car and small truck sales to be zero-emission vehicles (ZEV) by 2035, and 100% of heavy-duty truck sales to be zero-emission by 2045, can eliminate the majority of transportation sector emissions by 2050.

Industrial emissions standards or an industrial carbon cap program would require industrial facilities to switch from fossil fuels to electricity, renewable biofuels, and hydrogen. Minnesota is already advancing projects to integrate cleaner fuels — Gov. Tim Walz proposed new funding for biofuel infrastructure in the state’s budget and a Minnesota utility is piloting a new program to use hydrogen fuel. Industrial emissions standards that shift 100% of fossil fuel use to a mix of electricity and hydrogen for low-temperature and medium- to high-temperature heat by 2050 could reduce industry emissions 75% in 2050, accounting for a quarter of the potential reductions of five policy package.

Our modeling did not address the large agricultural sector in the state, which contributes 19% of Minnesota’s emissions. But the state is exploring policies that can offset agricultural emissions. Well-designed land use policies, like wetland restoration or grassland management, can close the gap between the five-policy scenario and the 80% reduction goal.

Minnesota has made major progress. Capitalizing on the IRA by adopting additional policies can cement its leadership, create new clean energy jobs, and ensure the state reaches its 2050 goal.

Michigan: Reclaiming its place as America’s innovation and industry hub

Michigan is laying the foundation for bolder climate action. In her 2023 State of State address, Gov. Gretchen Whitmer pledged to make Michigan “a hub of clean energy production.” It’s already happening — Ford just announced plans to set up an electric vehicle (EV) battery manufacturing facility 100 miles west of Detroit.

Last year, the state released a new climate plan, outlining policies to reduce emissions 52% below 2005 levels by 2030 and reach carbon neutrality by 2050. Previous Michigan EPS analysis by 5Lakes Energy, the Michigan Environmental Council, NRDC, Energy Innovation, and RMI found the state’s climate plan would cut emissions 50% by 2030 — nearly reaching the state’s near-term goal.

Strong implementation of Michigan’s climate plan sets the stage for further climate progress to reach the 2050 net-zero target. The state’s plan includes key components of the five policies, but more ambition is needed. Adopting our five recommended policies would cut Michigan’s emissions 86% relative to 2005 levels by 2050. The five policies would also spur economic development as clean energy infrastructure is built out, creating more than 70,000 jobs in 2030 and 153,000 jobs in 2050, and growing GDP 2.67% by 2050.

An 80% by 2030 and 100% by 2035 clean electricity standard would cut emissions more quickly than the climate plan target of 60% renewables by 2030 — though this is a solid foundation. The clean electricity standard accounts for a whopping 67% of total emissions cuts achieved by the five-policy package in 2030. Michigan could also move to adopt ACC II and set ambitious ZEV standards. Though a strong ZEV standard would only account for 5% of total emissions cuts in 2030, it would grow to 25% in 2050 as more gas vehicles are replaced with EVs.

With new majorities in the Michigan legislature and IRA incentives for clean energy technologies across sectors, the state is well positioned to implement — and go beyond — the policies laid out in the climate plan.

Wisconsin: Time to deliver on climate plans for economic growth

In Wisconsin, Gov. Tony Evers and state offices have made plans to address climate change and move towards carbon-free electricity. In 2020, the Governor’s Task Force on Climate Change produced a detailed report on reducing statewide emissions and now is the time to execute. If adopted in Wisconsin, our top five policies would reduce emissions 80% below 2005 levels by 2050 and add 39,000 new jobs in 2030, add 82,000 jobs in 2050, and grow GDP 2.8% in 2050.

The most impactful policy for Wisconsin is a 100% clean electricity standard by 2035, which accounts for half of the five policies’ emission reductions. The clean electricity standard alone would cut emissions 40% in 2035. This one policy would also be an economic juggernaut, creating 14,000 new, in-state jobs in 2035 and saving residents money by deploying lower-cost clean electricity. A separate Energy Innovation report finds replacing Wisconsin’s aging coal plants with new regional wind energy would yield savings up to $290 million annually compared to running existing coal.

Wisconsin can take advantage of Gov. Evers’ climate leadership to realize new economic opportunities. Among these three Midwestern states, Wisconsin could see the greatest GDP growth by implementing the top five policies — an estimated 2.8% growth in 2050.

Collaborating for climate leadership in the heartland

As our modeling demonstrates, just five climate policies would build on the progress these states have made to date, solidify Minnesota, Michigan, and Wisconsin’s leadership, and revitalize their economies. Now is the time to act on ambitious plans. The IRA dramatically lowers the cost of clean energy technologies and new climate momentum means these states are positioned to deliver — as demonstrated by Minnesota’s passing of 100% clean energy law.

Sharing best practices and building infrastructure across the region — such as EV charging networks and transmission lines — can amplify the actions of any one state alone. The collective action of these three states could revitalize America’s industrial heartland. It’s now up to Minnesota, Michigan, and Wisconsin to take advantage of this opportunity.