Executive PerspectivesUS Inflation Reduction Act: Climate & Energy Features and Potential ImplicationsAugust 2022Executive PerspectivesIntroduction to this documentUS Congress recently enacted legislation, the Inflation Reduction Act (IRA), that includes $369B of funding for climate and energy over the next decade. This funding builds on more than $110B of climate and energy funding in the Infrastructure Investment and Jobs Act (IIJA) adopted in late 2021. The primary vehicles for fiscal spending for the IRA will be through tax credits and incentive funding, intended to create investment multiplier effectsLegislation of this magnitude and duration lasting through the 2030s and beyond is likely to have profound and lasting impacts across US and global climate and energy systems, supply chains, industries, and tradeUS legislation on climate and energy also has the potential to trigger policy actions from other nations, both large energy producers that compete across these value chains, and large energy consumersThis document provides an overview of the key climate and energy features of the legislation, shares the potential shift in economics of clean energy investments and technologies it can deliver, and describes initial implications and opportunities for firmsThe second and third order implications of this legislation will emerge over time. For example, these policies impact the ability of every industry across the economy to decarbonize their supply chains. We will explore these in future BCG Executive Perspectives across select areas of focus2Infrastructure Investment and Jobs Act (IIJA)Signed into law Fall 2021Inflation Reduction Act (IRA)Passed Summer 2022Biden Signs Bipartisan Infrastructure Bill, Vowing Change ...
