Analysis: Federal Tax Policy is Now Climate Policy

With the Inflation Reduction Act, the federal government places energy tax credits at the center of its climate change policy. California, meanwhile, accelerates its more direct climate regulation.

The Inflation Reduction Act of 2022 (IRA) is the largest U.S. investment in greenhouse gas (GHG) emissions reduction to date.  The Act provides $270 billion in renewable energy tax credits over 10 years as part of its $369 billion in clean energy incentives and spending. The IRA extends tax credits for existing technologies and implements new tax credit…