(p. A17) Top administration officials are fanning out across the U.S. in a victory lap for the new Inflation Reduction Act, which President Biden calls “the most significant legislation in history to tackle the climate crisis.” America, we are told, is a global climate leader again. This narrative has serious problems.
The foremost issue is that the act will have a trivial impact on climate change. The Biden administration claims the law will enable the U.S. to reduce carbon emissions in 2030 by around 40% below 2005 levels. This is less than the 50% reduction Mr. Biden promised only last year, but it still sounds impressive. One major wrinkle: Most of that cut has nothing to do with the Inflation Reduction Act.
Unlike most other nations on the planet, the U.S. has substantially reduced its carbon emissions over the past 15 years. This is largely owing to the fracking revolution that replaced a lot of America’s coal with natural gas, which is cheaper and cleaner. Even without the new law, the U.S. was on track to cut emissions substantially by 2030, according to research by the Rhodium Group. Averaging their high and low emission predictions, the U.S. would drop emissions by almost 30% absent the new law. With the new law, emissions will decline instead by a little over 37%. The “most significant legislation in history” will actually cut emissions by less than eight percentage points.
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Given the $369 billion price tag on the act’s climate policies, it’s hard to imagine the Inflation Reduction Act surviving a Republican majority. It might not even survive sustained Democratic rule.
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The cost of the act also belies the oft-repeated claim that green technologies are already cheaper than fossil-fuel alternatives. If they were, they wouldn’t need enormous subsidies.
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(Note: the online version of the commentary has the date August 23, 2022, and has the same title as the print version.)