US passes its largest-ever investment in fighting climate change
The Inflation Reduction Act directed hundreds of billions of dollars toward clean energy, a watershed for American climate policy.
The United States enacted its largest-ever investment to combat climate change this August, as the Inflation Reduction Act directed hundreds of billions of dollars toward clean energy and emissions reductions, a watershed moment for American climate policy after years of gridlock.
The sweeping law channelled an enormous sum — on the order of $370 billion — into tax credits and incentives designed to accelerate the deployment of solar, wind and other clean energy, boost domestic manufacturing of batteries and clean technology, encourage the purchase of electric vehicles, and reduce emissions across the economy.
Rather than penalising emissions, the law took a carrot-heavy approach, using generous incentives to make clean options cheaper and to spur a wave of private investment. Analysts estimated it could help cut US emissions substantially by the end of the decade, bringing the country's climate goals within closer reach.
The law's passage, after a long and uncertain legislative battle, was hailed by supporters as a transformative achievement that would reshape the American energy landscape, create jobs and restore the country's credibility on the world stage.
Its effects soon rippled through the economy, triggering announcements of new factories and clean energy projects, and prompting other countries and trading blocs to consider how to respond to the surge of American subsidies. While debate continued over its costs and design, the law marked a decisive turn, committing the United States to a major, sustained push toward a lower-carbon economy.