Looking Back 2022: The Passing of the Inflation Reduction Act

Looking Forward 2023: Passing the New Farm Bill

The passing of the Inflation Reduction Act (IRA) in 2022 was a welcome step in combating climate change in the United States. This bipartisan supported legislation, signed into law on August 16^th, has given some hope that the U.S. is serious about tackling climate change and addressing emissions. Within the IRA, $369 billion will be invested to tackle climate change and significantly decrease emissions by 2030.  The IRA addresses pollution, environmental justice, and cutting energy costs, with funds focusing on specific areas relevant to meeting the country’s climate targets.

The U.S. has committed to a 50-52% reduction of emissions by 2030 below 2005 levels through their nationally determined contributions (NDC).  According to a report produced by Rhodium Group, net US GHG emissions are reduced by 32 – 42% below 2005 levels by 2030 through the IRA. Comparatively, without the IRA, GHG emissions would be reduced by 24 – 35% in the same time period.

While it is obvious more needs to be done to reach the goal of 50-52% by 2030, the IRA is a big win in 2022 to actually reach those goals. The biggest reduction of emissions will come from the power sector, followed by the industry. With the plans in place, these sectors will reduce emissions by more than 800 Million Metric Tons (MMT) of CO₂e by 2030. Reductions in the power sector will largely come from the accelerating growth of clean energy and new tax incentives for energy storage. The United States Environmental Protection Agency can be contacted for questions, feedback or to report a problem here.

In order to address the very real threat of climate change, more robust and aggressive actions must be taken. The coming years are going to be critical if we are to limit global warming to around 1.5°C. In a press release in April, the International Panel on Climate Change (IPCC) found that limiting warming to around 1.5°C would require global greenhouse gas emissions to peak before 2025 and reduce by 43% by 2030. The US will be close but the country is not in a vacuum. There is great potential to further cut emissions across sectors not addressed in the IRA, and be a global leader in addressing climate change if there is political will.

The Inflation Reduction Act was a historic step forward for a decarbonized future. The IRA alone will not get the US on track of meeting 2030 climate targets. Not included in the IRA is building energy efficiency which provides further potential to reduce overall emissions. In order to further reduce emissions, providing the EPA with the tools and authority to create a robust regulatory framework for CO₂ emissions for new and existing power plants would be hugely beneficial.

Perhaps the biggest hope in 2023 to further reduce emissions lies in the Farm Bill. The Environmental Defense Fund, along with ICF reported that achievable science-based climate targets in agriculture could contribute up to 17% of overall emissions in the United States. The biggest potential to cutting emissions is limiting land use change. keeping forests, wetlands, and grasslands intact (which provide vital carbon sinks throughout the world). Improving soil management, optimizing fertilizer use, increasing renewable energy, and reforestation could all contribute to a further reduction in emissions and get the U.S. on track to halving CO₂ by 2030.

The Inflation Reduction Act was a big win in 2022 in order to meeting climate targets. The 2023 Farm Bill has great potential to further reduce emissions by nearly 20% by 2030. As we begin 2023, calling and writing your representatives and senators voicing support for emission reductions in the Farm Bill, Climate legislation, and building a sustainable future will remind them that more needs to be done.

This Post was submitted by Climate Scorecard US Country Manager Dave Schroeder