The Inflation Reduction Act, the nation's first federal climate policy, has bolstered clean energy efforts in the U.S., but still faces several hurdles on its way toward meeting the White House's climate goals.
Congress passed the IRA in August 2022 following debate among policymakers. The roughly $385 billion climate policy promotes innovation in clean energy development and deployment, and aims at accelerating the U.S.'s transition to a clean energy economy through tax credits and incentives, as well as grant and loan programs.
The IRA is one way President Joe Biden hopes to meet his administration's goals for the U.S. to have reduced its carbon emissions by 50% in 2030 and reach 100% clean electricity by 2035.
The IRA has spurred private sector investment in clean energy efforts over the last year, said John Podesta, the White House's senior adviser to the president for clean energy innovation and implementation. Podesta spoke during a Brookings Institution event on the IRA.
Podesta said the private sector has announced $115 billion in clean energy manufacturing investments, including facilities such as General Electric's proposed wind turbine manufacturing assembly line in Schenectady, N.Y. The private sector has also announced more than $135 billion in investments for the U.S. battery and electric vehicle supply chain, with companies such as LG Energy Solution releasing plans for a $5.5 billion battery factory in Queen Creek, Ariz.
Though the private sector has responded to incentives provided by the IRA, Podesta acknowledged that the IRA is facing challenges. For example, there's the significant hurdle of lengthy permitting processes for new transmission lines to deliver clean energy. To reach the administration's 2035 100% clean electricity goal, Podesta said the U.S. needs to deploy high-performance transmission lines at twice the current pace and build out 60% additional capacity.
"To achieve that, President Biden has escalated the permitting issue to the highest levels of government for the first time," Podesta said.
Challenges facing U.S. climate policy implementation
Permitting is one of the biggest challenges facing the IRA's intended efforts to boost clean energy development and deployment in the U.S. Transmission line projects can take an average of nine years to gain right-of-way permitting, said Sanjay Patnaik, director of Brookings' Center on Regulation and Markets, during the Brookings event.
Sanjay PatnaikDirector, Brookings Institution Center on Regulation and Markets
"We need to build a lot of infrastructure to actually materialize those gains the IRA is promising," Patnaik said. "These permitting timelines can take a very long time, [and] we currently don't see anything in Congress that would focus on really reforming it. If you really want to build a lot of this infrastructure -- transmission lines, power generation -- you need to speed it up."
Podesta said this is an issue the administration remains focused on, noting that the federal government is investing $1 billion in IRA funds to increase capacity at key federal permitting agencies to add personnel and the information technology to "move this process forward." The IRA also funnels billions into supporting state and local reform of permitting processes, he said.
Clean energy challenge from China
China also remains a significant challenge for implementation of the IRA. China currently dominates the clean energy supply chain, from manufacturing of solar panels to mining the rare-earth minerals and metals used in electric vehicle batteries.
To counter this issue, Podesta said the U.S. is working on "friendshoring" global supply chains for clean energy that "break our collective reliance on China for those technologies."
"We're in the throes of, with the EU, trying to negotiate a critical minerals agreement which would give the mining and production of critical minerals in Europe access to the credits here," he said.
Workforce development is another issue facing the IRA. Though the IRA proposes to create 1.5 million new clean energy jobs over the next 10 years, Adie Tomer, a senior fellow at Brookings, said it remains to be seen whether those jobs will be sustainable long term.
Some of the potential jobs highlighted stem from construction of battery plants, wind turbine assembly lines and similar facilities. However, construction alone isn't a viable long-term option, Tomer said.
"It's much like constructing a stadium -- those are not sustainable jobs," he said during the event. "That is just a short-term infusion of cash for those workers. We're looking for sustainable employment which has real opportunities."
Makenzie Holland is a news writer covering big tech and federal regulation. Prior to joining TechTarget Editorial, she was a general reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.