
US could see $2 trillion in economic growth from the IRA
A new independent study reveals that the Inflation Reduction Act (IRA) is driving substantial economic benefits for the United States, projecting $1.9 trillion in economic growth over the next decade. Commissioned by the American Clean Power Association (ACP) and conducted by ICF, the report highlights the positive impact of the IRA’s energy tax credits on critical sectors such renewable resources, oil, gas, hydrogen, nuclear energy, and battery storage systems as well as the power sector, transportation, manufacturing, and more. Among the most significant impacts in the last two years is the substantial increase in domestic manufacturing of clean energy systems.
One of the most notable achievements is the surge in domestic manufacturing of clean energy systems, which has seen remarkable growth over the past two years. The study also emphasizes the law’s ability to incentivize massive investments, create millions of jobs, and reduce greenhouse gas emissions, cementing the US’s position as a leader in energy innovation.
Source: ACP
Key economic impacts
- Massive Economic Impact: The IRA is projected to generate $3.8 trillion in net spending, delivering a 4x return on taxpayer investment.
- GDP Growth: A $1.9 trillion increase in the US economy over ten years.
- Job Creation: The law is expected to generate 13.7 million jobs over the next decade.
- Increased Household Income: The IRA will add $846 billion to household income, improving the financial well-being of millions of Americans.
Broad support across industries
The report has garnered support from organizations such as the US Chamber of Commerce, the Nuclear Energy Institute (NEI), the National Hydropower Association (NHA), and the Edison Electric Institute (EEI), all of which underscore the transformative impact of tax credits in incentivizing private investments and enhancing the nation’s economic competitiveness.
Challenges under a new administration
Despite the highlighted benefits, a report by BloombergNEF (BNEF) warns of potential challenges to the IRA under a new administration. Former President Donald Trump, a leading Republican candidate for 2025, has indicated plans to prioritize fossil fuel production over clean energy initiatives. This could lead to efforts to repeal the IRA, potentially disrupting the current trajectory of clean energy investments and manufacturing growth.
Key statements
“The clean energy tax credits have significantly increased domestic energy production, revitalizing communities across the country and lowering consumer energy bills,” said Jason Grumet, CEO of ACP. “By supporting our nation’s diverse energy resources, the IRA strengthens national security and enhances economic competitiveness.”
Malcolm Woolf, President of the NHA, emphasized, “The IRA creates billions of dollars in investment opportunities for water power, including pumped storage projects and the electrification of non-powered dams. It’s critical to maintain this law to ensure the stability and growth of our energy infrastructure.”
As the US experiences unprecedented energy demand, industry leaders highlight the importance of preserving the IRA’s provisions to secure a reliable, affordable, and clean energy future.
The study reaffirms the IRA’s critical role as an economic catalyst, calling for bipartisan collaboration to protect and enhance this landmark legislation amid shifting political dynamics.
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