The recently-passed Inflation Reduction Act (IRA) has faced backlash from some climate proponents who argue that in a last-ditch effort to appease West Virginia Senator Joe Manchin, the law relies too heavily on what the Atlantic “all carrots, no sticks.” Meaning, that it’s more about corporate incentives to drive voluntary decarbonization rather than punitive policies.

While the IRA does include more incentives directly, it is likely to strengthen the EPA and by extension, the Clean Air Act -- the nation’s biggest climate “stick” at its disposal.

Why This Matters

The IRA will solidify the EPA’s power to regulate greenhouse gas emissions through direct amendments to several sections of the Clean Air Act. Though it does not grant the agency authority to regulate power plants directly, it does redefine the term “greenhouse gas” to include “the air pollutants carbon dioxide, hydrofluorocarbons, methane, nitrous oxide, perfluorocarbons, and sulfur hexafluoride.” It also authorizes the EPA to grant money for any project that “reduces or avoids greenhouse gas emissions and other forms of air pollution.”

This move to solidify the EPA’s regulatory power is especially significant in the wake of June’s SCOTUS ruling on West Virginia v. EPA that called such authority into question.

The Future of the EPA

As Robinson Meyer writes for the Atlantic, the IRA’s “carrots” include subsidies for clean energy and carbon capture initiatives, which will empower the EPA to pass tighter regulations over time. Often, emissions regulations are limited by cost to both corporations and the EPA. But due to new grants contained in the law, the EPA can subsidize the cost of compliance and allow more companies to comply, thus allowing more expansive regulations. It’s possible that giving greater power to the EPA will mean companies, cities, and states can pass more ambitious climate policies, too.

“The IRA isn’t like an EPA regulation that will modestly bend the curve of US emissions,” writes Meyer. “Instead, it catapults the country into a whole new landscape where the economics of every other climate action are different.”