On August 16, 2022, American President Joe Biden signed the Inflation Reduction Act (IRA) into law.
The IRA is the most meaningful climate bill ever passed in the US It has the potential to significantly curb the country’s greenhouse gas emissions (GHG) over the next few years.
The 755-page legislation touches on a plethora of issues, including healthcare, prescription drugs and stock buy-backs and it raises nearly $800 billion from multiple resources. Its provisions pertaining to climate change mitigation, clean energy and energy innovation, however, dominate the headlines.
The $369 billion earmarked for clean energy and climate change mitigation initiatives as per the Inflation Reduction Act is an unprecedented level of support from the US Federal Government for the transition to sustainable energy. It is expected that the Act will reduce US GHG emissions to approximately 40%, compared to 2005-levels, by 2030. Without the enactment of the IRA, the US was on course to reduce its GHG emissions to only 26%, compared to 2005-levels, over this period.
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