One year later, the law of limiting inflation is working — sort of -

One year later, the law of limiting inflation is working — sort of

It’s been nearly a year since Democratic lawmakers pushed the first new climate spending legislation in more than a decade over the finish line in Congress. The 2022 Inflation Reduction Act, or IRA, includes $369 billion in tax credits for clean energy and funding for climate and energy programs, money already flowing into the economy as federal agencies begin distributing it.

The Biden administration has said the bill will help deliver on the president’s pledge to halve U.S. emissions by 2030, and independent analyzes have estimated it will help cut domestic emissions 43 to 48 percent below 2005 levels by 2035. Now, researchers have come up with an updated prediction. The Rhodium Group, an independent analytics company that tracks greenhouse gas emissions produced by the US economy, published a report Thursday showing how much climate progress the IRA will usher in — and where the legislation will fall.

“Almost a year into its passage, the IRA’s effects are becoming more apparent,” said a Rhodium Group spokesperson.

The report, the ninth edition of Rhodium’s annual Emissions Assessment, found that the IRA and statewide climate bills that have been signed into law by state governors across the country in recent years will cut emissions between 29 and 42 percent in 2030, compared to 2005 levels. By 2035, greenhouse gas emissions will have fallen between 32 and 51 percent. Prior to the IRA’s passage, the nation was on track to cut emissions by 26 to 41 percent by 2035, according to Rhodium estimates from 2022. Rhodium called the overall reductions “a meaningful departure from previous years projections of the U.S. emissions trajectory.”

Thanks to IRA subsidies, solar and wind are already a lot cheaper: solar by about 40% and wind by 55%. The legislation will also affect the speed at which electric cars replace gas-powered cars. In 2035, the report said, electric vehicles will account for between one-third and two-thirds of passenger car sales. That’s meaningful progress, but emissions cuts aren’t sharp enough to put the US on track to meet its pledge to cut emissions by 50 to 52 percent by 2030 under the Paris Agreement, the 2015 international treaty on climate change that aims to keep global warming below 1.5 degrees Celsius (2.7 degrees Fahrenheit).

That’s because federal policy tools are only one piece of the decarbonization puzzle. A number of other factors can influence the speed and extent of renewable energy technologies replacing oil, coal and gas, including how the industrial sector behaves and whether countries continue to pass ambitious climate policies.

And because the IRA is about clean energy incentives, rather than penalties for fossil fuel use, some of the factors that influence the speed at which an economy decarbonizes will not be affected by federal legislation.

For example, Rhodium expects natural gas, which made up roughly 36% of the country’s energy mix in 2022, to make up 6 to 29% of its energy supply by 2035, depending on whether utilities take advantage of the incentives in the bill and what types of renewable energies are possible in their markets. Natural gas, a cheap source of energy, overtook coal as the country’s main source of electricity in 2016. Despite stimulus in the IRA, gas remains plentiful and affordable, and is here to stay for the foreseeable future.

In New York City, a city that has positioned itself as a leader in the green transition and has pledged to reduce fossil fuel use by 80 percent by 2050, environmental activists have successfully pushed for the closure of the nearby Indian Point nuclear plant, prompting the city to temporarily rely on natural gas-fired plants as it builds infrastructure that can transfer hydroelectric power from Canada to Queens.

Over the next decade, policymakers, regulators, and utility executives will weigh similar trade-offs between cost, impact of climate, and public opinion across the country, and they won’t all choose the same path. This will lead to an incomplete grid of green and dirty electricity. The bands shown in the new Rhodium report represent this variance.

But they also show that IRAs make a difference. “While there is uncertainty about how quickly the US can increase renewable energy on the grid or electric vehicles on the road, these levels of deployment will be measurably lower than we estimate in our modeling under the same conditions in the absence of an IRA,” Ben King, lead author of the report, told Grist.

In order to continue making progress on climate change, Congress will likely need to pass additional climate laws, including legislation directed at speeding up the authorization process for new large-scale renewable energy projects, strengthening the green energy workforce, and resolving supply chain kinks that impede green technology deployment. Doing so has become more difficult since Republicans regained control of the House of Representatives in January.

The goals of the Paris Agreement are still within reach, the report states, “but getting there won’t be easy.”