In the heat of this summer’s political jockeying, Minnesota Gov. Tim Walz beat out better-known governors from bigger states to claim a major prize.
It wasn’t a spot on the Democratic presidential ticket — that was still two weeks away — but instead one of the biggest climate grants EPA ever has directed to a single state: $200 million to cut agricultural emissions.
“This was a competitive grant program,” Walz, announcing the grant July 23 at a Twin Cities food bank, said before correcting himself: “A highly competitive grant program.”
Winning that Inflation Reduction Act money, a competition that pitted Minnesota against 44 other states, required the kind of bureaucratic sophistication that’s become Walz’s trademark as governor, experts and observers said, especially when it comes to climate policy.
Now, as Walz formally accepts the Democratic vice presidential nomination, the governor is stepping into a new role that will draw on many of those same skills — both on the campaign trail and, potentially, in the White House.
Federal climate programs are getting “turbocharged” in Minnesota “thanks to the raft of state policies that the governor and the legislature have passed,” said Justin Balik, state program director for Evergreen Action.
“We’re really excited about how the governor has done that with his team in Minnesota,” he said, “and what that portends for potentially and hopefully stepping into the role of vice president.”
It’s not just wonks who are impressed. While climate hawks have swooned over Walz’s marquee climate policies, what’s convinced more skeptical constituencies has been the governor’s attention to details they care about. Unions and rural moderates have formed key blocs of Walz’s political coalition because of his climate agenda, observers say, not in spite of it.
“I don’t think there’s anywhere in the country with better alignment between labor and climate-solutions folks,” said Kevin Pranis, marketing manager for the Laborers’ International Union of North America in Minnesota and North Dakota.
What makes the Minnesota model work, he said, has been Walz’s cooperation with unions, utilities and other energy industry players who will implement the literal nuts and bolts of his policies. That has helped guide Walz toward where and how he can push for aggressive climate action without causing problems on the ground.
In the building sector, for instance, Walz has passed state subsidies for heat pumps that align with federal tax credits, as well as building codes that will push new construction away from gas appliances. But he has not proposed phasing out of gas in his cold-weather state. Instead, he signed a 2021 law directing gas utilities to plan ways to cut their own emissions.
That approach, observers said, is the secret ingredient to Walz’s recipe for making climate action politically palatable: careful implementation of policies today that build momentum for more action tomorrow.
“There’s been a lot of spin on Walz as, like, a climate radical,” Pranis said. “I’ve never seen any appetite for doing radical things that might turn out badly.”
One sign that Walz’s approach works, Pranis said, has been the warm public reception to sweeping changes in energy policy. Minnesota has had no yellow-vest movement, he said, referencing the 2018 French protests over energy policy that galvanized rural and working-class voters.
While some environmentalists have pushed Walz to go even further, Pranis said the administration always has focused on pragmatism.
“I think some climate folks take that as a kind of cowardice,” he said, but Walz recognizes there’s a big risk when climate policy fails. “The pitchforks come out, then you end up having to retreat from that climate policy — and probably a bunch of other things that you were fine on, or that you could have done without blowing everything up.”
Walz’s balance of ambitious pragmatism has helped make clean energy a winning issue for Minnesota Democrats, said state House Majority Leader Jamie Long, who sponsored the state’s clean electricity standard.
“Gov. Walz worked very hard to make sure that [renewable energy jobs] were going to be good-paying union jobs,” he said.
Long added that he and Walz worked closely with unions to get the details right, ending up with provisions that required prevailing wages — a standard that’s easier to enforce at the state level — along with provisions directing utility regulators to prioritize local jobs.
“Gov. Walz was there every step of the way on that bill. He ran on it; he took it to the stump,” Long said. “We got to a place where the holdouts, so to speak, within the labor coalition finally saw themselves in the future of clean energy. And I think trusting Gov. Walz went a long way toward helping them get there.”
Pranis of LIUNA agreed, saying Walz’s team had so thoroughly addressed the implementation concerns of both labor and industry that, when the bill finally passed, “the only people complaining were the [Republican] politicians.”
‘The Minnesota model’
Sector by sector, Walz has oriented his administration around extracting the maximum possible gains from state and federal climate programs.
“Everyone [there] is thinking about state policy and federal implementation being complimentary,” Evergreen Action’s Balik said, “as opposed to being siloed.”
For instance, Minnesota’s new green bank is one of the first in the country to offer direct-pay financing for clean energy projects, Balik said, making it easier to finance projects by public entities, nonprofits or other developers who would struggle to translate tax credits into capital.
On the ground, that in-the-weeds detail meant that Minnesota’s green bank was able to quickly approve a $4.7 million loan for a geothermal district heating system in a 1,000-unit housing development.
The project depends on a mix of state and federal funds. The state’s green bank will finance some of the upfront costs, and once it becomes eligible for IRA tax credits, the developers will use that federal money to repay the state.
The geothermal project in eastern St. Paul also will count toward the green bank’s mission to direct 40 percent of its benefits to environmental justice communities — a state-level version of the Justice40 framework that has guided the Biden administration’s climate programs.
The Walz administration has made a habit of lining up state policy with federal programs.
On electricity, Balik said, Walz’s policies will help Minnesota draw the most it can from the IRA’s biggest pot of money, clean energy tax credits with uncapped funding.
The biggest reason is the state’s clean electricity standard, which requires that utilities reach net-zero emissions by 2040. Another reason is that Walz this year passed permitting reforms designed to accelerate renewable energy projects — a potentially decisive policy for deploying solar panels and wind turbines, even if it lacked the public profile of other climate programs.
Martin Pochtaruk, CEO of Heliene, which manufactures solar panel components in Minnesota, credited Walz’s permitting reforms as some of the country’s best. And he predicted it would accelerate economic development across the clean energy supply chain.
“Walz can show how it’s done,” he said. “Minnesota has reformed the permitting process to bring us to the 21st century from the 1950s.”
Walz also has quietly transformed transportation policy. In 2023, he signed legislation overhauling Minnesota’s transportation planning to emphasize emissions reductions and lowering vehicle-miles traveled. That means the state will have more power to direct federal highway money — including the Infrastructure Investment and Jobs Act’s historic funding — toward climate policy.
“Just by Minnesota taking these state policy measures … you’re leaving your state in a really prime position to take advantage of this generational opportunity that is the IRA,” Balik said.
Even before Minnesota won the $200 million Climate Pollution Reduction Grant for agriculture, the state already had pulled down $410 million in IRA grants, according to a Politico analysis of federal data through June 11.
After Congress passed the Inflation Reduction Act, Walz created a new position in the Commerce Department to coordinate state and federal climate spending and hired Peter Wycoff, who previously had been the climate and energy adviser to Sen. Tina Smith (D-Minn.), one of the main backers of the unsuccessful effort to pass a federal clean electricity standard.
Climate and labor advocates also praised Walz’s regulatory appointees, especially his chair of the state’s Public Utilities Commission, Katie Sieben, a former state lawmaker with a background in climate and energy policy.
All those elements, Pranis said, make Walz’s climate record one that he can brag about to rural, working-class voters who might care more about jobs than global warming.
“He’s been a pragmatic progressive on energy policy, always has been,” he said, describing that as the “Minnesota model.”
“If you actually want to solve climate and actually want to protect the environment and create jobs — like, we are in the midst of figuring it out right here,” he said.
