Full Title: Beyond Clean Energy: The Financial Incidence and Health Effects of the IRA
Author(s): Nicholas Roy, Maya Domeshek, Dallas Burtraw, Karen Palmer, Kevin Rennert, Jhih-Shyang Shih, and Seth Villanueva
Publisher(s): Resources for the Future
Publication Date: October 7, 2022
Full Text: Download Resource
Description (excerpt):
The tax provisions of the IRA will affect electricity prices, tax burdens, emissions, and public health. This analysis examines each of these effects from a distributional perspective, with consideration of alternative scenarios regarding future natural gas prices and electricity demand. Further details of these scenarios and modeling results are described in subsequent sections of this report.
Our projections indicate the IRA accelerates emissions reductions in the electricity sector, reduces electricity prices, and provides a progressive cost shift from consumers to taxpayers to pay for the program. Substantial air quality benefits also result, accruing notably in regions of the country most affected by the decline in fossil fuel electricity production.
The IRA is one of four significant changes in federal policy that will affect the future of US energy supply and use. The Infrastructure Investment and Jobs Act (2021) provided billions of dollars in spending for clean energy infrastructure including public transit, rail, support for nuclear power, broadband, and carbon management. The CHIPS Act (2022) allotted billions of dollars to rebuild the US semiconductor industry, which will provide crucial components for the energy transformation. Further, the renewed development of new environmental regulations by the US EPA represents another important change in the incentives facing the existing fossil fuel industry. Taken together, these policy shifts are likely to amplify the changes that we identify in this study.