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Climate Brief: IRA's "Uncapped" Tax Credits Could "Explode" America's Climate Economy [1]
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Date: 2022-10-05
The Inflation Reduction Act could “shape the direction of the American economy, ” potentially spending twice as much as anticipated due to the popularity of the “uncapped” tax credits designed to incentivize the shift to a clean energy lifestyle.
In The Climate Economy Is About to Explode, Robinson Meyer of the Atlantic reports on recent research by the international bank Credit Suisse.
There’s no budget or limit written into the law that restricts how much the government can spend. The widely cited figure for how much the IRA will spend to fight climate change—$374 billion—is in large part determined by the Congressional Budget Office’s estimate of how much those tax credits will get used. But that estimate is wrong, the bank claims. In fact, so many people and businesses will use those tax credits that the IRA’s total spending is likely to be more than $800 billion, double what the CBO projects. And because federal spending tends to catalyze private investment, that could send total climate spending across the economy to roughly $1.7 trillion over the next 10 years.
Additionally, the bank reports, that the US, is “poised to become the world’s leading energy provider
across the entire spectrum of energy production — affording us a “competitive advantage in low-cost clean electricity and hydrogen production, infrastructure, geologic storage, and human capital.”
By 2029, U.S. solar and wind could be the cheapest in the world at less than $5 per megawatt-hour, the bank projects; it will also become competitive in hydrogen, carbon capture and storage, and wind turbines. (The law will help America’s battery industry, but the bank doesn’t see the U.S. becoming the world’s biggest battery producer, given that China already has such a dominant advantage.)
Credit Suisse also pointed out that even if the Republicans were to take over.control in 2024, they would be unlikely to repeal the IRA because of its positive impact on jobs and the overall economy in Reublican states.
What could hinder the opportunities presented by the IRA is failure to build out the necessary infrastrucutre and “to get government approval to permit enough power lines, green infrastructure, and carbon-injection wells for the law to matter.”
The Guardian reports that without global heating this summer’s northern hemispheric drought would have only occurred once every 400 years and that climate change made the event 20 times more likely.
The dry conditions, assessed using data on soil moisture, largely resulted from the heatwaves that struck across North America, Europe and Asia, with lower rainfall relatively less important. The scientists said a summer as hot as that of 2022 would have been “virtually impossible” without global heating and in Europe alone there were 24,000 heat-related fatalities. -snip- The scientists had already found that the deadly South Asian heatwave was made 30 times more likely by the climate crisis and that the intense rainfall, which caused devastating floods across Pakistan, was made 50% worse by global heating. In August, an analysis by the Guardian laid bare the devastating intensification of extreme weather around the world, supercharged by human-caused climate change of just 1C to date.
“Climate change is really hitting us hard, not just in poor countries like Pakistan, but also in some of the richest parts of the world, like west central Europe, that had been considered less vulnerable,” said Prof Maarten van Aalst, director of the Red Cross Red Crescent climate centre. “It’s playing out in front of our eyes even faster than we might have expected.”
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[1] Url:
https://www.dailykos.com/stories/2022/10/5/2127204/-Climate-Brief-IRA-s-Uncapped-Tax-Credits-Could-Explode-America-s-Economy
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