The US is on track to cut its greenhouse gas emissions nearly in half, compared to 2005 levels, by 2035, according to an analysis looking at the impact of the Inflation Reduction Act (IRA).
Just a year after this law, which has a heavy focus on promoting green energy, took effect, climate progress in the US is improving, but despite this, the analysis shows the act won’t do enough on its own to hit the nation’s climate target of a minimum 50 per cent emissions cut by 2030.
With climate-related tax credits and funding amounting to nearly $400 billion, the IRA represents the most significant spending on this sector in US history and it has already started to influence the path of US decarbonisation, which was accelerating even before the law was passed.
“There’s been a ton of announcements in clean-energy manufacturing, battery manufacturing, EV [electric vehicle] manufacturing,” says Robbie Orvis at Energy Innovation, a US think tank. Requests from wind and solar projects to connect to the grid have continued to grow and people are buying record numbers of EVs and heat pumps, he says.
But a year is hardly enough to gauge the impacts of such a sweeping law, says John Bistline at the Electric Power Research Institute, a non-profit organisation in California. To assess its long-term effects on emissions, he convened 17 groups, including Energy Innovation, to compare nine different economic and energy models. “There’s a flurry of modelling released, and it’s challenging to understand where the models agree, where they disagree, and why,” he says.
The groups found that their models’ latest projections range from a 43 to 48 per cent emissions reduction compared with 2005 levels by 2035, a significant jump from the 25 to 31 per cent reduction the models say would happen without the law. All of the models show decarbonising the electricity sector is responsible for the greatest share of emissions reductions due to the law.
“There’s general agreement that this is a big deal for the US,” says Ben King at Rhodium Group, a research firm in New York that contributed modelling.
However, those reductions aren’t enough to meet US targets under the 2015 Paris Agreement, which require a cut in emissions of at least 50 per cent by 2030. Even in the most optimistic projection, the US still needs to curb its annual emissions by a further gigatonne. Failing to meet the 2030 target would mean even steeper cuts will be needed to achieve net-zero emissions by mid-century.
“Life gets substantially more difficult each year we’re not making massive strides in decarbonisation,” says King.
Bistline says closing that gap will require some combination of actions by the private sector, state governments and federal agencies to expand clean energy, improve energy efficiency and electrify everything. It is an “all-hands-on-deck situation,” he says.
Steps like the US Environmental Protection Agency’s recent move to place strict limits on emissions from existing power plants and mandate sales of more EVs can help, says King, as would tighter rules on methane emissions from the oil and gas industry. With further action, it should still be possible for the US to meet is climate targets, says King. “But there’s a lot that has to go right for us to get there.”