- Journal Article
Abstract: If goals set under the Paris Agreement are met, the world may hold warming well below 2°C; however, parties are not on track to deliver these commitments, increasing focus on policy implementation to close the gap between ambition and action. Recently, the US government passed its most prominent piece of climate legislation to date—the Inflation Reduction Act of 2022 (IRA)—designed to invest in a wide range of programs that, among other provisions, incentivize clean energy and carbon management, encourage electrification and efficiency measures, reduce methane emissions, promote domestic supply chains, and address environmental justice concerns. IRA’s scope and complexity make modeling important to understand impacts on emissions and energy systems. We leverage results from nine independent, state-of-the-art models to examine potential implications of key IRA provisions, showing economy-wide emissions reductions between 43 and 48% below 2005 levels by 2035.
This multimodel analysis provides a range of decision-relevant information. For example, international policy-makers and negotiators need to track progress toward Paris Agreement pledges, and assessing IRA’s impacts is important to monitor US efforts and to provide a template for measuring the performance of other sectors and jurisdictions. Federal and state policy-makers can use this IRA analysis to compare updated baselines with policy targets—for emissions, electric vehicle deployment, and others—to understand the magnitude of additional policies and private-sector actions needed to narrow implementation gaps. Electric companies need to know how long IRA incentives will be available, because these subsidies can continue until electricity emissions are below 25% of their 2022 levels, which requires national models to evaluate. Industry- and technology-specific deployment can support investors, technology developers, researchers, and companies to quantify market opportunities.