Summary: The 2022 Inflation Reduction Act (IRA) contained a range of climate and energy provisions that PWBM previously estimated to cost $384.9 billion over 10 years (FY2022 – 2031). Since that estimate, newer implementation details have emerged, and the fiscal year calendar has moved to start at FY2023. Our updated estimate for over 10 years (FY2023 – 2032) for just the climate and energy provisions is now $1,045 billion. Table 1 decomposes these costs by specific area of climate and energy provisions.
In preparing these updated estimates, PWBM consulted with private sector experts to understand the likely growth in utilization by climate and energy provision. We are especially grateful to the energy team at Goldman Sachs who helped break down each area and further aided our efforts to produce a budget score against the pre-IRA baseline. See Table 1 footnote for references.
| Provision | Description | Budget Change (2023 - 2032) |
|---|---|---|
| Clean electricity/energy | Solar generation, onshore wind generation, offshore wind investment, battery storage investment | -263 |
| Clean hydrogen | Green & blue hydrogen | -49 |
| CCUS | CO2 captured | -23 |
| Advanced Manufacturing | Solar, wind, and battery plants | -183 |
| Clean vehicles | Electric vehicles (EV & PHEV), medium trucks, heavy trucks, and buses | -393 |
| Biofuels | Biodiesel/RD, SAF | -43 |
| Energy efficiency | Heat pumps, commerical buildings footage with energy efficiency improvement, residential homes investment in energy efficiency improvements | -28 |
| Agriculture, forestry | Grants, loans and projects | -3 |
| Energy grants, loans | Grants, loans and projects | -37 |
| Air pollution | Grants, loans and projects | -22 |
| Total | -1,045 | |
This table was prepared with the help of energy experts at Goldman Sachs based on their report, Della Vigna, Michele; Bocharnikova, Yulia; Lee, Brian; Mehta, Neil; Singer, Brian; Chinello, Enrico, et al. (2023). “Carbonomics: The Third American Energy Revolution.” Goldman Sachs. PWBM thanks Michele Della Vigna and Brian Singer for additional calculations and detailed discussions.