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  • Writer's pictureBen Haley

How big is the IRA down payment towards net-zero?

Updated: Mar 14, 2023

With last summer's passage of the Inflation Reduction Act (IRA), the United States took the first real steps at the national level on a pathway to net-zero. EER's experience modeling anticipated policy impacts of the legislation (REPEAT Project) as well as our experience modeling deep decarbonization pathways for the United States (Annual Decarbonization Perspective) positioned us to perform a comparative analysis of the IRA world we now inhabit and the net-zero future we're aiming for. In this companion white paper to our Annual Decarbonization Perspective, we asked three key questions:

1. Where are the gaps in deep decarbonization not adequately supported by the IRA?

2. What are the opportunities for regulatory policy, state policy, and technology progress to address those gaps?

3. Does the relative weight of policy ambition in the IRA (clean electricity, hydrogen, carbon capture, etc.) change the optimal decarbonization strategy in the long-term?

We find that the IRA performs well at at incenting deep decarbonization energy system activities in the near to medium-term consistent with a net-zero pathway. Post-2035, continued emissions reductions would need to be supported by the continuation of federal policy or state policy and continued technology development. Anticipation of secondary effects (domestically and globally) is difficult, but IRA does appear to position the U.S. well in key sectors (electricity and transportation) and with the deployment of technologies that may be necessary in the longer-term (hydrogen, direct air capture, etc.). We also find that, even after taking the IRA into account, there are still many significant opportunities for continuing to reduce emissions in the next decade and maintaining the pathway to net-zero.

The white paper is available to download below:

EER_IRA vs. Net Zero
Download PDF • 1.94MB

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