Climate 2023 U.S. Climate Policy: The Inflation Reduction Act
The Inflation Reduction Act (IRA) is the most comprehensive global legislation to tackle climate challenges the world has witnessed outside of China’s state-sponsored efforts. It has exposed the deficiencies of the punitive model embraced by Europe by providing a broad and generous range of incentives to deploy climate technology in the United States. This carrots versus sticks approach will ensure the United States is a global climate leader for the next 15-20 years.
According to Credit Suisse, two-thirds of the initial headline number of $400 billion is linked to uncapped tax credits. The allocation of $1 trillion of these credits by the government is not mentioned in the bill. When we apply privately to a public multiplier effect of one-to-one, there would be an investment of $1.7 trillion over ten years.
We discuss the nuance of the legislation, the details of many of the tax credits, and the sectors that will benefit.
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We discuss the challenges and opportunities in urban mobility, and Laura's role in making mobility in cities greener.
Betty Jiang is a Managing Director of Credit Suisse in the Investment Banking division. Betty is also the author of what we believe is the most comprehensive assessment of the IRA.
Arnie Grant is a tax partner in ReedSmith's firm's Chicago office.
Ulysses Smith is an ESG Senior Adviser based in Debevoise & Plimpton's New York office.