The rate of carbon emissions cuts in the United States has doubled since the passage of President Joe Biden’s Inflation Reduction Act (IRA), according to a new report by Clean Investment Monitor.
By Cristen Hemingway Jaynes
Since the IRA was passed in 2022, more than 80 wind, solar and energy storage projects have made use of the law’s tax credits and direct payments, reported Reuters.
“Clean energy and transportation investment in the US set another record in Q4 of 2023, reaching $67 billion — a 40% increase from the same period in 2022. Clean investment now accounts for 5% of all private investment in structures, equipment, and durable consumer goods in the United States, up from 3.7% at the end of 2022,” a press release from Clean Investment Monitor said.
Together, the Bipartisan Infrastructure Law and the IRA supplied $239 billion for electric vehicles (EVs), green energy, carbon management and electricity for buildings in the U.S. last year — a 38 percent increase from 2022, the report said, as Reuters reported.
“Retail investment accounted for nearly half of this total, driven by robust growth in electric vehicle sales (a 52% increase year-on-year). Investment in the deployment of utility-scale solar and storage systems also grew robustly over 2023, up more than 50% year-on-year to $53 billion,” the report said. “But the fastest investment growth last year occurred in the deployment of emerging climate technologies — up ten-fold from $0.9 billion in 2022 to $9.1 billion in 2023 — and in the manufacturing of clean technology, up 153% from $19 billion in 2022 to $49 billion in 2023.”
According to experts, much more will need to be done to reach net-zero by 2050.
“The IRA doubles the pace of reductions but should have tripled it to hit our 2030 climate goals and get on the path to net-zero by 2050,” said Jesse Jenkins, who participated in the study and is an energy systems engineer with Princeton University’s Department of Mechanical and Aerospace Engineering, as reported by Reuters.
The report was a collaboration between the Massachusetts Institute of Technology and independent researcher Rhodium Group.
Asian and European companies were motivated by the IRA to increase their investments in the U.S., which led Europe to develop its Green Deal Industrial Plan.
Challenges to implementation of the IRA in some sectors have included state and local regulations hampering the development of transmission lines to connect renewable energy projects to the grid and the pace of expansion of EV charging stations.
Jigar Shah, director of the U.S. Department of Energy’s loan programs office, said the IRA has been slow to encourage some projects like carbon sequestration, hydrogen, geothermal and nuclear energy.
Last month in Houston, Shah commented that the sectors “continue to struggle around figuring out how exactly to put all the pieces together,” as Reuters reported.
Oil companies have complained that projects like oil well carbon capture and hydrogen plants have faced regulatory hurdles, said Roman Kramarchuk, who is in charge of climate markets and policy analytics at S&P Global Commodity Insights.
Kramarchuk added that another wave of development would happen when there was “more certainty” concerning financing and “what it takes to get a deal done.”
The IRA has contributed to a reduction in U.S. carbon emissions of four percent annually — twice the pace of the year before passage of the law — according to an article published last year by researchers from across the country.
“We estimate a total of $34 billion in federal investment — including tax credits, grants, and the fiscal cost of government loans — went to clean energy and transportation projects nationwide in fiscal year 2023,” the report said. “There was $220 billion in total investment in clean energy and transportation projects during the same period.”
Cristen Hemingway Jaynes is a writer of fiction and nonfiction with an MA in Creative Writing from Birkbeck, University of London, and a JD and an Ocean & Coastal Law Certificate from the University of Oregon School of Law.
