The 2022 Inflation Reduction Act (IRA) represents the largest investment in climate action in U.S. history. In the two years since its enactment, the IRA has spurred a flurry of activity aimed at reducing greenhouse gas emission, and protecting communities from the impacts of climate change. But there is still more work to do to realize the full promise of the IRA and the outcome of the next Presidential election could have a big impact on whether that work happens. That is the key finding of a new report—Implementing the Inflation Reduction Act: Progress to Date and Risks from a Changing Administration—published today by the Sabin Center for Climate Change Law.
The report evaluates the progress made by the Biden administration in implementing the IRA’s climate-related programs and the vulnerability of those programs to unilateral executive branch interference under a future hostile presidential administration. For the purposes of the report, we divide IRA programs into three broad categories: (1) spending programs, (2) tax programs, and (3) other climate-related programs. Implementing these programs is no small task, requiring action by over a dozen different federal bodies which, in many cases, must coordinate with states, territories, tribal governments, municipalities, and the private sector. Despite the large number of actors, and the complexity that introduces, significant progress has already been made in implementing the IRA.
Consider the status of the IRA spending programs, for example. The IRA allocated approximately $105 billion for grants, awards, and other non-loan spending by federal agencies. We estimate that nearly half of that had already been spent or committed to agency programs as of mid-July and additional funds—possibly 27% or more—will likely be spent before President Biden leaves office. (Here, “spent” means that the funds have been committed by contract or other binding, enforceable allocation mechanism to a specific third-party recipient.) These funds would be difficult for a future administration to claw-back. Any funds that remain unspent at the end of President Biden’s term could be at risk, however. A future hostile administration may seek to redirect unspent funds to other programs or withhold them altogether. There are some important limits on what a future administration could. For example, generally, no more than 10% of the funds available under an IRA program could be transferred but that could still be a significant amount in some cases.
A future hostile administration could also take steps that limit the effectiveness of the IRA’s tax programs in driving private action on climate change. Any executive action that increases uncertainty is likely to be highly damaging. For example, threatened changes to the tax code (even if they do not come to pass) or the repeal or revision of relevant regulations or guidance may increase the risks and costs of, and thereby discourage, private investment in climate solutions.
There are also similar opportunities for executive interference with the other climate-related programs in the IRA. Our analysis suggests that programs aimed at controlling methane emissions from the oil and gas sector, including through collection of a methane emissions charge, may be at particular risk. Under a hostile administration, the Environmental Protection Agency could take steps to delay, or otherwise interfere with, implementation of the new charge.
All of this suggests that, while significant progress has been made in the two years since the IRA was enacted, the work required to implement the Act is far from over. The IRA’s success in driving down greenhouse gas emissions and protecting communities from the impacts of climate change will, thus, depend heavily on the outcome of the 2024 election.
The report was authored by Romany M. Webb, Martin Lockman, and Emma Shumway. Read the full report here.
For more information about the IRA and steps taken to implement it, visit iratracker.org.
Romany Webb
Romany Webb is a Research Scholar at Columbia Law School, Adjunct Assistant Professor of Climate at Columbia Climate School, and Deputy Director of the Sabin Center for Climate Change Law.
