L’Inflation Reduction Act is the most significant action taken in the United States in the fight against climate change. According to the US Environmental Protection Agency (EPA), this is expected to reduce US annual CO2 emissions from 5,600 million tonnes per year in 2021 to 3,800 by 2035.
Since its ratification in August 2022, numerous companies have unveiled dozens of new investment projects in the United States. In a report published in February, the American NGO Climate Power identified more than 90 clean energy production projects (solar, wind, electric vehicles and batteries, etc.) spread across 31 states.
- Most of these are concentrated in 7 states: Arizona, Georgia, Michigan, Ohio, South Carolina, Tennessee and Texas.
- Among the 8 projects announced in Georgia between August 2022 and January 2023, the Korean car manufacturer Hyundai as well as SK On (a Korean battery manufacturer) jointly announced that they would invest 9 billion in total in the state for the construction of an electric battery factory.
- The latter will power the electric vehicles of Korean-designed Hyundai and Kia cars produced in the United States.
It is for the moment mainly the manufacturers of electric batteries that have expressed interest in the tax advantages and various provisions contained in the law. Due to IRA geographic criteria (50% of the value of produced battery components must be manufactured or assembled in North America this year, then 100% from 2029), demand for US production batteries is expected to increase significantly over the next few years.
The IRA also contributes to the Biden administration’s overall positive record on the economy and job creation. Climate Power notably lists more than 100,000 jobs (electricians, mechanics, technicians, construction workers, etc.) already announced thanks to these 90 new investment projects.
- According to the Blue Green Alliance, more than 9 million jobs could be created by 2030 through energy, climate and environmental investments contained in the ERI.
- In January, the unemployment rate in the United States fell to 3.4%, its lowest level since 1969.
While theInflation Reduction Act was voted on and then ratified by Joe Biden in August 2022 – unlocking $370 billion in investment until 2031 – Republican elected officials in the House have tabled several bills aimed at repealing certain provisions of the text, including:
- the Natural Gas Tax Repeal Actwhich seeks to repeal the Methane Emission Reduction Program (which imposes a federal tax on methane emissions from oil and gas operations);
- the Protecting American Energy Production Act, that would prevent the president from declaring a federal moratorium on the fracking ;
- the Promoting Cross-border Energy Infrastructure Actwhich would require the Federal Energy Regulatory Commission approves gas pipeline projects to Canada or Mexico within 30 days.
- Tennessee Republican elected official Andy Ogles tabled a bill in early February entitled “The Inflation Reduction Act of 2023”, which aims to repeal theInflation Reduction Act of 2022 in its entirety.
If these laws have almost no chance of passing the Senate (in the hands of the Democrats), they testify to the aversion that a significant number of elected Republicans have towards the IRA as well as federal spending. authorized by law — although the Committee for a Responsible Federal Budget estimates that the latter “would reduce budget deficits by more than $300 billion in its first nine years of operation”.
