Energy & Environment

EPA: Climate law will cut carbon emissions up to 43 percent

The Inflation Reduction Act (IRA) is poised to cut economy-wide carbon emissions by up to 43 percent relative to 2005 levels, according to the first Environmental Protection Agency (EPA) report on the 2022 climate and infrastructure law.

The report, released Tuesday, indicates the IRA cuts economy-wide emissions between 35 percent and 43 percent below 2005 levels in 2030. In the electric power sector specifically, it cuts emissions between 49 percent and 83 percent from 2005 levels, according to the EPA. The report projects 2030 carbon emissions from electricity at 11 percent to 67 percent lower than a scenario in which the IRA was not implemented.

The EPA noted that a “handful” of models indicate higher emissions under the IRA in 2025, which it attributes to the no-IRA scenario featuring higher short-term investments in renewable energy around that time before tax credits expire. The emissions cuts are flatter in the long term under the IRA projections because it extends those tax credits.  

The greatest reductions of direct and indirect emissions are in electricity use by buildings, where the report projects emissions falling by 49 percent to 63 percent in 2030. This is followed by the transportation sector, where the report projects a reduction of 11 percent to 25 percent. 

By 2035, it puts the cuts between 52 percent and 70 percent for buildings and 15 percent to 35 percent for the transportation sector.

“The Inflation Reduction Act is transforming energy production and consumption in dramatic ways, paving the way towards a clean energy future,” EPA Administrator Michael Regan said in a statement. “This report shows robust evidence that America’s clean energy transformation is driving significant reductions in CO2 emissions, putting us on a clear path to achieve President Biden’s bold climate goals.”

Senate Environment Committee ranking member Shelley Moore Capito (R-W.Va.), however, was sharply critical of the report’s conclusions that the IRA will lead to a downturn in the natural gas and coal sector, major industries in West Virginia. 

“It’s no surprise the Inflation Reduction Act, which was written in secret and rushed through Congress on a party-line vote, is extremely unpopular in energy-producing states like West Virginia, and this report outlines exactly why,” Capito said in a statement.

Capito’s fellow West Virginia senator, Joe Manchin (D), was instrumental to the IRA’s passage but has also been a vocal critic of its implementation. Manchin is considered one of the most vulnerable Democratic incumbents in the 2024 election, should he decide to run again.

Tags carbon emmissions Inflation Reduction Act Joe Manchin Michael Regan Shelley Moore Capito