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How the Inflation Reduction Act (2022) will Impact Climate Change

Climate change is an existential threat to the planet and humanity. It threatens lives, livelihoods, human rights, social and economic conditions, and human and natural systems. Its impacts have far-reaching implications, including loss of life to natural disasters, poor health, declining biodiversity, food insecurity, and displacement. These realities underlie President Biden’s administration policy direction on climate change, culminating in the Inflation Reduction Act (2022). The law has multiple provisions targeting core climate action imperatives like clean/renewable energy investments, energy efficiency, reduction of greenhouse gases/ carbon emissions, climate change mitigation, adaptation and resilience, restoration of tree cover, green spaces, natural habitat, water resources, biodiversity, and green growth funding. The target areas are core dimensions of climate action, inferring a holistic and sustainable approach to combating climate change.

In August 2022, U.S. President Joe Biden assented to the Inflation Reduction Act. The climate action-oriented law aims to combat climate change impacts and create a more environmentally sustainable America (Judd, 2022). A year into its enactment and implementation, the policy has yielded significant climate action gains backed by the $430 billion in funding for carbon emission reduction through grants, projects, subsidies, and direct investments. In a report released by the White House, the Inflation Reduction Act’s climate and clean energy provisions have led to $110 billion in private sector investments in clean energy manufacturing and the creation of at least 170,000 clean energy jobs (The White House, 2023). The financial, policy, legislative, and technical commitments herald a new yet transformative strategy for combating climate change.

On the clean energy front, the Inflation Reduction Act has stirred new private sector investments in non-fossil energy, a clear strategy to reduce carbon emissions, global warming, and climate change. The investments consist of $70 billion directed towards developing the electric vehicle supply chain and $10 billion allocated to solar energy manufacturing. By the end of the decade, these investments are anticipated to cut carbon and greenhouse gas emissions by one billion tons, resulting in a 41% decrease from 2005 levels, while generating 1. 5 million new job opportunities (The White House, 2023). These are positive achievements toward achieving net zero emissions in alignment with the global scientific consensus that global net human-induced GHC emissions should be reduced by 45% by the end of the decade (2030) and reach a net zero emissions target by 2050 to avert the worst climate change outcomes and impacts (Judd, 2022). The efforts and actions toward emission reduction portend significant strides in reversing climate change and its adverse impacts.

Through the Inflation Reduction Act, the Biden administration committed more than $ 1 billion to bolster climate resilience and adaptation and cushion communities from disastrous climate change effects, such as extreme weather, drought, and heat. According to the White House report, The Environmental Protection Agency (EPA) has availed $650 million for environmental justice projects, such as bolstering community-based organizations’ capacity, reducing pollution, and local governments’ funding. The agency has a $27 billion GHG Reduction Fund for vulnerable communities to facilitate clean energy provision and technical assistance to neutralize climate change-induced crises. The Inflation Reduction Act partially awarded $562 million to the National Oceanic and Atmospheric Administration (NOAA) to fund 150 projects in 30 coastal states to bolster the climate resilience of communities and cushion them from adverse climate change impacts. Other provisions are $514 million in funding for the Colorado River Basin through the Bureau of Reclamation under The Department of the Interior’s (DOI) $250 million award by The U.S. Forest Service (USFS) to facilitate tree planting for urban communities. The fund will facilitate the creation of green spaces in urban centers where most Americans (about 84%) are concentrated (The White House, 2023). These collective actions are effective pathways to climate change mitigation, adaptation, and resilience.

The Inflation Reduction Act is expediting the achievement of the nation’s climate objectives by fostering remarkable investments in energy, ultimately establishing a sustainable energy economy. The policy framework is a pathway to new clean electricity energy generation toward the country’s goal of 80% clean electricity by 2030 (Ward, 2022). These ambitious goals will be attained by tripling wind-generated electricity and increasing solar generation eightfold by 2030. The Department of Energy projects that between 2022 and 2030, American families will save $27-38 billion in power bills. The expectation is that by 2030, the Inflation Reduction law will have stirred twice as much solar, wind, and battery deployment (The White House, 2023). The production tax credit for renewable (solar) energy in Florida will support the construction of solar projects, contributing to the country’s most significant solar expansion beyond the current 50 operational sites. Also, Wisconsin state has benefited from $2.4 billion to fund the 2022-2026 new renewables plan, which will yield energy cost savings. American families who install efficient heating and cooling electric heat pumps, battery storage, and rooftop solar will receive tax credits and energy cost savings, as will drivers who purchase qualifying clean vehicles (The White House, 2023). The Inflation Reduction Act provided incentives in the form of grants and rebates for individuals with energy-efficient homes, aiming to promote the adoption of cost-saving electric appliances and encourage people to make energy-efficiency improvements to their residences.

The Inflation Reduction Act has climate action provisions transforming the country’s trajectory. One year since its implementation, the law has successfully targeted core climate action imperatives like clean/renewable energy investments, energy efficiency, reduction of greenhouse gases/ carbon emissions, climate change mitigation, adaptation, and resilience, restoration of tree cover, green spaces, natural habitat, water resources, and biodiversity, and green growth funding. The financial, policy, and technical investments portend reduced emissions, enhanced climate resilience and adaptation, and inferring a holistic and sustainable approach to combating climate change and its adverse impacts.


Ward, B. (2022, August 16). Ponder the miracle of a U.S. climate law » Yale climate connections. Yale Climate Connections. https://yaleclimateconnections.org/2022/08/ponder-the-miracle-of-a-u-s-climate-law/

Judd, M. V. (2022, August 17). Biden signs inflation reduction act into law | CNN politics. CNN. https://www.cnn.com/2022/08/16/politics/biden-inflation-reduction-act-signing/index.html

The White House (2023, August 16). FACT SHEET: One year in, president Biden’s inflation reduction act is driving historic climate action and investing in America to create good paying jobs and reduce costshttps://www.whitehouse.gov/briefing-room/statements-releases/2023/08/16/fact-sheet-one-year-in-president-bidens-inflation-reduction-act-is-driving-historic-climate-action-and-investing-in-america-to-create-good-paying-jobs-and-reduce-costs/

image: https://www.modisadvisors.com/matters-blog/inflation-reduction



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