Earlier this month, the National Bureau of Economic Research published a striking new working paper with an unambiguous title: “Green Waste.” Drawing on more than a decade of data from Norway’s flagship green-investment subsidy program, the authors—economists from the University of Chicago, Ohio State University, and Statistics Norway—reach a sobering conclusion. Even when policymakers can identify which projects deliver the largest emissions reductions, they often choose not to fund them. The result is massive inefficiency: the same climate gains could have been achieved at less than half the cost.
While the study focuses on Norway, its implications are universal—and especially relevant for states grappling with the costs and tradeoffs of energy transition. That warning is not academic. It speaks directly to the choices North Carolina faced in 2025 and it helps explain why the General Assembly’s passage of Senate Bill 266—the Power Bill Reduction Act—moved the state’s energy policy in a more realistic and defensible direction.
The NBER paper does not argue against climate action. It takes emissions reduction as a legitimate public objective. It challenges the assumption that ambitious political targets can be reliably translated into efficient outcomes. In practice, the authors find, political salience, favored technologies, and rigid timelines routinely distort green spending. Even well-intentioned officials face severe information constraints, leading them to pursue visible solutions rather than cost-effective ones.
North Carolina did not arrive at this crossroads by accident. In 2019, Governor Roy Cooper unveiled a “Clean Energy Plan” shaped by input from 164 stakeholder organizations, overwhelmingly environmental advocacy groups. Despite a longstanding state law, only about 7 percent of participants identified affordability and reliability as priorities. The plan favored intermittent renewable energy while opposing new natural-gas pipelines and nuclear power. Independent research estimated it would raise annual household electricity bills by more than $400.
In 2021, the General Assembly responded by enacting House Bill 951, which put emissions-reduction goals into statute but added a crucial safeguard: any transition had to follow the “least cost path” and maintain or improve grid reliability, even as it set in motion the eventual retirement of more than 9,000 megawatts of coal-fired baseload generation. HB 951 embedded a tension that would later define the state’s energy debate—ambitious targets constrained by statutory commitments to affordability and reliability.
By 2025, aggressive interim benchmarks and optimistic planning assumptions threatened to overwhelm those protections, recreating exactly the kind of rigidity and cost blindness the NBER study warns against. SB 266 represented a conscious pivot away from that path.
First, it reaffirmed that cost and reliability are binding constraints, not inconveniences. Rather than allowing interim targets to override engineering realities, the law emphasized the least-cost path consistent with grid reliability—an approach that strengthens long-term climate goals by making them politically and economically sustainable.
Second, it moved policy away from political favoritism and toward technology neutrality. One of the NBER paper’s central findings is that governments routinely overfund politically attractive technologies even when their emissions returns are poor. SB 266 avoids locking specific technologies into statute, preserving flexibility and reducing the risk that North Carolina commits billions to today’s fashionable solutions at tomorrow’s regret.
Third, it acknowledged the danger of front-loading costs for uncertain future benefits. Climate programs too often ask citizens to pay now for gains that may arrive decades later. North Carolina lawmakers recognized that durable energy policy must remain affordable as it unfolds.
SB 266 did not abandon decarbonization. It acknowledged something more fundamental: long-run emissions mandates set decades in advance are poor substitutes for disciplined, evidence-based policymaking. North Carolina still operates under a statutory 2050 carbon-neutrality target adopted in 2021, but experience—and now new economic evidence—suggests such distant mandates magnify the information and incentive problems that make energy policy inefficient.
In 2026, with new evidence now on the table, North Carolina’s 2025 energy reset looks less like hesitation and more like foresight. The next step is to finish the job: repeal the 2050 carbon-neutrality mandate and replace distant political targets with a durable commitment to affordability, reliability, and real emissions reductions. That approach is increasingly consistent with both North Carolina law and the economic evidence.
Donald Bryson is the CEO of the John Locke Foundation, a free-market think tank based in Raleigh, N.C.
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