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Modeling the Inflation Reduction Act Using the Energy Policy Simulator

Modeling the Inflation Reduction Act Using the Energy Policy Simulator

Full Title: Modeling the Inflation Reduction Act Using the Energy Policy Simulator
Author(s): Megan Mahajan, Olivia Ashmoore, Jeffrey Rissman, Robbie Orvis, Anand Gopal
Publisher(s): Energy Innovation
Publication Date: August 10, 2022
Full Text: Download Resource
Description (excerpt):

On July 27, 2022, the United States Senate released legislative text for the Inflation Reduction Act (IRA), which includes $369 billion in funding for climate and clean energy provisions. These emissions-reducing provisions run the gamut from clean energy and electric vehicle tax credits to large-scale investments in domestic manufacturing of clean technologies and environmental justice. The IRA also requires auctions for oil and gas on federal lands and waters prior to auctions for renewable energy projects and requires completion of several 2022 lease auctions that were previously canceled.

Energy Innovation modeled the IRA to estimate its impact on emissions reductions, job creation, and public health, using our free and open-source U.S. Energy Policy Simulator (EPS). We find that the IRA is the most significant federal climate and clean energy legislation in U.S. history, and its provisions could cut greenhouse gas (GHG) emissions 37-41 percent below 2005 levels. If the IRA passes, additional executive and state actions can realistically achieve the U.S. nationally determined commitments (NDCs) under the Paris Agreement.

Further, for every ton of emissions increases generated by IRA oil and gas provisions, at least 24 tons of emissions are avoided by the other provisions.

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