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By Jeff Young
Environment and Sustainability Editor
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Two years ago this Friday, President Joe Biden signed into law one of the signature pieces of legislation of his presidency, the Inflation Reduction Act. Despite its name, which does not mention energy or climate change, the IRA is the country's single biggest investment in clean energy in history and by far America's most aggressive action to curb climate change.
The sprawling legislation aims to cut the federal budget deficit, modernize the Internal Revenue Service and lower prescription drug prices. But the bulk of the IRA—some $783 billion of its authorized spending—is aimed at stimulating clean energy.
"We are very proud of our 2-year-old, one that has accomplished more than any 2-year-old ever has," White House Climate Adviser Ali Zaidi told reporters last week during a briefing to highlight the law's impact.
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Most of the IRA's climate action comes in the form of tax credits to incentivize renewable energy development, cleaner manufacturing and the purchase of low-pollution products such as home heat pumps and EVs.
Those tax incentives have triggered a wave of private sector investment, with more than $265 billion in clean-energy projects announced since the IRA's passage, according to the White House.
Department of Treasury data shows that last year some 3.4 million American families claimed more than $8.4 billion in tax credits to help offset costs of things like rooftop solar installations, more efficient appliances and home energy audits.
By those measures, the IRA is working to grow economic opportunity while cutting energy costs and climate pollution.
However, climate action advocates point out that even though the law sets the country on a course to reduce its emissions of greenhouse gases, it still falls short of international commitments the U.S. made to avoid the most dangerous warming.
There is also grumbling that implementation of some IRA programs has been slow to reach people in need, and public surveys show most Americans have still not heard much about the IRA.
The IRA passed both chambers on party-line votes, with Vice President Kamala Harris casting the tie-breaking vote in the Senate. Congressional Republicans criticize the law as wasteful spending and have attempted to repeal large parts of it.
All of this was on Zaidi's mind when he joined Newsweek to talk about what the IRA has accomplished in its first two years and what remains ahead. The conversation has been edited for length and clarity.
Newsweek: Two years into this law, is there one standout statistic for you that sums up the IRA's impact?
Ali Zaidi: On clean energy, the standout for me is over 300,000 jobs created. You know, the president started this whole thing saying that when he thinks climate, he thinks jobs. And for him to have 300,000 proof points…is pretty remarkable.
From a climate perspective, if you look at the energy-related CO2 in the past year, you see a 3 percent decline in energy-related CO2 in the United States and 3 percent growth in the economy. That's the second pillar in our theory, which is you could grow the economy and you could cut emissions. Those things not only are not mutually exclusive, they can actually be mutually reinforcing.
And then probably the third—and I know you asked for one!—is the IRS data on the 3.4 million families who have already claimed residential clean-energy and home energy efficiency credits, which sort of goes to that point about this cutting energy costs and utility bills for families around the country.
So, we are early innings into the transformation that has been unleashed. And we can either see it through, we can accelerate it, or, as the votes put up by the House Republicans demonstrate, there is a group of folks who would rather pull the rug out from underneath this massive economic expansion.
Let's talk about that for a second: How much of what we're seeing under the IRA will continue regardless of the outcome of the election, and how much is vulnerable to being undone?
I can't speak to the electoral process or the campaign—what I can say is we are in a fragile inflection point in American energy, in terms of our economic security and in terms of U.S. leadership on climate.
This could still break a bunch of different ways.
No one will drive around the country and pull out the nearly 200,000 charging stations that now line our roads and highways. No one's going to pull out the solar panels that now generate tens of millions of homes worth of energy on our grid. They're not going away.
But we know manufacturing in the past in the United States has gone boom and bust and that it is very sensitive to public policy and stable demand. Our ability to feed the engine of American innovation depends on our ability to retain that manufacturing base here. We should not rest in the middle of the global clean-energy race, because no one else in this race is slowing down.
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I was struck by some of the survey figures from the Yale Program on Climate Change Communication. Only about 39 percent said they had heard very much about the IRA and its climate components. Is this a difficult piece of legislation to communicate to the public, and do you think the name itself is a bit of an impediment?
I think it's such a multifaceted piece of legislation that it's hard to underline that in an easy way.
You've got a bill that took on the pharma industry and helped check health care costs, that provides benefits to farmers and ranchers, that's helping stand up a massive renaissance in American manufacturing. So, it's hard, you're right. It takes a minute to get across both the magnitude and then the minutia underneath it.
The other piece of this is folks are busy living their lives and they're more focused on outcomes. You know, you think about the Clean Air Act, the Safe Drinking Water Act, the Toxic Substances Control Act. If you went out and polled people on, "Hey, what do you think of SDWA and TSCA?" they'd say, "I don't know, but I really like Olive Garden!"
[Laughs.]
But what folks are really focused on is, are their kids safe from poison? Are their communities protected from pollution? Is the United States set up to lead the next turn of the global economy or to be a laggard in it?
I think increasingly the Inflation Reduction Act is being felt by people. These are incredibly popular provisions.
I would be remiss if I didn't point out that under the Biden administration, oil and gas production has reached its highest level in the nation's history. Is that level of petroleum, of fossil fuel output, incompatible with climate progress?
When you look at what it takes to be successful on climate in this decisive decade, a big focal point is, where is investment flowing in terms of long-lived energy infrastructure? How are we wiring the economy to run on and produce clean energy?
At the same time, you will have the product of legacy infrastructure, legacy economic capacity and the reality of managing supply in a way that does not generate disruptions.
So, I understand why you're asking the question, but the point-in-time flow that you're talking about is less relevant than whether you are accelerating the pace of a decarbonization pathway.
We're adding more [electricity] capacity to the grid than we have in 20 years, and 96 percent of that is clean. That's the really big deal.
And in the transportation sector, the science-based trajectory for where you need to be in terms of sales of new vehicles is somewhere between 40 and 60 percent of the sales in 2030 need to be electric. Our progress toward that—in terms of having the industrial capacity to supply those vehicles, the charging infrastructure to service those vehicles—to me, that's the arbiter of whether we are on the right trajectory.
That's how I like to think about the climate math. And at the end of the day, this is about meeting the urgency of that math.
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