By Jay Turner, Arzy Abliadzhyieva, Pranathi Chintalapudi
The Inflation Reduction Act is a grand experiment in how the U.S. government can accelerate the clean energy transition and spur the industrial sectors needed to support it. With a group of students, I’ve been tracking just how consequential the IRA has been for the U.S. electric vehicle industry. Six months in, we already have a lot to report.
The IRA, along with the Bipartisan Infrastructure Act, marks a break with earlier climate policies. Since the 1990s, the driving goal for most climate policy was cutting U.S. carbon emissions, either by putting a price on carbon or imposing emission standards on key emitters, like vehicles or the energy industry. But that strategy was an uphill political battle that limited its success.
The big exception to this strategy was the 2009 stimulus bill, passed at the start of the Obama administration. It leveraged the 2008–2009 fiscal crisis to inject $90 billion into the clean energy sector, including tax credits to fund research, support investments, and incentivize deployment of renewable energy and energy efficiency technologies.
The IRA takes that approach to a new level, expanding support for both the production and deployment of clean energy technologies. The Congressional Budget Office estimates that it will inject $374 billion into the clean technology sector over the next decade. Some expect that could catalyze $1.7 trillion in private investments.
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Insightful analysis of how policy and resources are shaping the EV manufacturing boom.