In 2029, US solar and wind could be as cheap as $5 per megawatt-hour, making it the cheapest in the world, according to a research note from Credit Suisse released last month.

In addition to stimulating clean energy growth, the Inflation Reduction Act (IRA)will also inject $1.7 trillion into the green-energy economy, leading to more decarbonization by awarding tax credits to people and businesses. Though no republicans voted in favor of the IRA, red states stand to benefit the most from the bill. States may try to stymie new clean energy development, but the bill is unlikely to be repealed, even by a GOP-controlled congress.

Why This Matters

Incentivizing decarbonization is important given the increasingly bleak consequences of relying on fossil fuels. A UN report released last month stated that there’s a 48% chance that global temperatures could rise 1.5 degrees C compared with pre-industrial times within the next five years, much sooner than expected. Were this to happen, it would be nearly impossible to meet the goal of the Paris Agreement, which was to cap temperature rise at 1.5 C. Consequently, extreme weather events will become even more common, and could deplete the global economy, threatening governments all over the world.

The good news is that the climate economy is picking up steam across the world -- renewable energy is cheaper than ever, and generates 75% of all new power, while coal use has fallen to a mere 4%. The IRA represents the US doing its part to mitigate emissions after a long stretch of hesitance on climate action. Just in the US, new clean-energy jobs are beating out fossil fuels, with a potential 73% of total net job growth in 2023. States like California can now run on 100% renewable energy for a brief amount of time. Plus, innovations in energy storage are making renewable energy both more resilient, and cheaper.

States Take Action

The benefits of the IRA will help fuel a suite of new state-led energy projects and climate commitments.

• Oregon just completed the Wheatridge Renewable Energy Facility, a hybrid project that combines a wind farm, solar array and battery storage. This is the largest project in the US to combine those three renewable energy resources on the same site.
• The state of New York found that IRA will pump $70 billion into New York state’s economy between now and 2050, which will help the state reach its decarbonization goal, which states that by 2050, greenhouse gas emissions from the statewide economy must be 85 percent below their 1990 levels.
• The Nature Conservancy found, in a recent report, that “western states can affordably and reliably meet all their future energy needs, achieve economy-wide net-zero greenhouse gas emissions reductions by 2050, and avoid the loss of their most sensitive natural areas and working lands.” This report aims to be able to help environmentalists and policymakers collaborate on where to construct more clean power projects. 
• California, Oregon, Washington, and British Columbia signed onto a Statement of Cooperation (SOC) that promotes a joint effort among the four governments to invest in climate infrastructure, extreme-weather resilience, and a low-carbon economy.

Perhaps this momentum will help inspire other states -- like Florida, which is reeling from Hurricane Ian -- which have been slow to climate action.