The IRA Has Made a Little Climate Bang for a Lot of Taxpayer Bucks
ICLE Chief Economist, Brian Albrecht, is quoted in a Dispatch piece by Scott Lincicome regarding the Investment Reduction Act’s failure to make a dent in climate change. Read full story here.
Given my schedule and intense desire to avoid writing about tariffs again, now’s as good a time as any to check in on the Inflation Reduction Act, which has been in the news lately because Republicans are considering whether to trim the law’s subsidies as part of their big tax/spending package. As readers of Capitolism surely know, I am and remain skeptical of the IRA as an industrial policy bill designed to boost American manufacturing and make the United States a clean energy powerhouse (or whatever), and we’ll surely revisit where those efforts stand later this year when more data are in about the factories and jobs at issue. For now, however, it’s worth examining the IRA in terms of simply its budgetary cost and primary objective of reducing carbon emissions to fight climate change. As an excellent new report from the Breakthrough Institute documents, this is not going well. And none of it should be surprising.
The IRA So Far: Higher Costs and Missed Emissions Targets
As the Breakthrough report documents, the IRA’s subsidies have already become way more expensive than the already-high $383 billion price tag the Congressional Budget Office originally calculated (which itself was billions more than what Senate Democrats first claimed). “More recent estimates,” the report notes, “project the total cost of these programs to run closer to a trillion dollars, with the cost of wind and solar subsidies alone substantially exceeding the cost of the original estimates not only for the clean energy subsidies but for the entire cost of the package, inclusive of non-climate related spending.”