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How Big is the “Biggest Climate Spending Bill Ever?” Key Factors Influencing the Inflation Reduction Act’s Clean Energy Impacts
The Inflation Reduction Act could deliver more than $1 trillion in tax expenditures and outlays targeting clean energy deployment, but considerable uncertainty characterizes the economic, emissions, energy, and fiscal implications of the law. I review the features of the political system governing implementation, the regulatory system overlaying performance standards, the innovation responding to IRA incentives, and the energy networks in which IRA-supported investments operate to identify the key factors influencing IRA’s outcomes. Drawing from past research and policy experience, I illustrate how these factors could play out and how future program evaluation could reduce uncertainty and inform better climate policy.
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