A recent report by American Clean Power finds that the Inflation Reduction Act of 2022 will create millions of jobs, boost economic growth and have lasting impact on the U.S. economy.
An independent study by American Clean Power finds that the Inflation Reduction Act (IRA), passed in 2022, delivers a 4X return on taxpayer investment, growing the economy by $1.9 trillion over the next ten years.
While some believe that the IRA is “the green new deal,” it benefits energy technologies including oil, gas, hydrogen, nuclear energy, and battery storage systems as well as the power sector, transportation, manufacturing and more.
One significant result of IRA incentives is the expansion of domestic manufacturing. The report says U.S. manufacturing attracted investment of over $100 billion in new or expanded clean energy manufacturing.
“This study underscores the Inflation Reduction Act’s pivotal role in increasing our domestic manufacturing capabilities to accelerate our economic growth and modernize and electrify our nation’s infrastructure to meet growing energy demand. NEMA’s members have already made $12 billion in investments to date around the country to strengthen domestic manufacturing,” said Debra Phillips, National Electrical Manufacturers Association president and CEO.
Key findings include:
- Economy: The IRA results in over 4X return on taxpayer investments, based on over $3 trillion in national economic and emission reduction benefits and over $740 billion in costs.
- Climate change: IRA incentives will result in carbon emission reductions of over 4.1 billion metric tons.
- Growth: The IRA will grow the U.S. economy by $1.9 trillion.
- Jobs: The law is expected to increase clean energy jobs from around 3 million in 2022 to over 6.5 million by 2032.
- Household income: Investments resulting from the IRA will add $846 billion to household income.
- Manufacturing: The IRA incentivizes clean energy manufacturing facilities, creating jobs and onshoring the supply chain. The nation will also see an uptick in building sector upgrades.
“These provisions are catalyzing tremendous private sector investment in new manufacturing and energy infrastructure that will keep our economy competitive for decades to come and ensure the U.S. leads the world developing technologies to bolster energy security, while also reducing emissions,” said Marty Durbin, senior vice president for policy at the U.S. Chamber of Commerce.
The report, Economy-wide Impacts of the Inflation Reduction Act Energy Provisions, was commissioned by the American Clean Power Association (ACP) and conducted by ICF, a non-partisan, non-political company. By combining sector and macroeconomic modeling, the study estimates the incremental economy-wide impacts of the IRA and captures net benefits attributable to the IRA beyond state policies or other activities that would be taking place regardless of the IRA.
After analyzing the economy-wide impacts of the IRA’s energy tax credits, the report concludes that the law will incentivize significant investments, create millions of jobs, and boost economic growth, which will have lasting impact on the U.S. economy.
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