BLOOMBERG • August 15, 2022
The $370 billion Inflation Reduction Act survived a political process because clean energy has finally become cheap enough to start moving the country away from fossil fuels. The problem is that the chain of technological advances that will enable the climate bill to move the U.S. to a less carbon-intensive future are not enough to get the country all the way to its goal: cutting emissions in half by 2030, compared to 2005, and eliminating them in full by the middle of the century. For that, decarbonization must become even cheaper. And future gains will be tougher to come by. To hit its 2030 target, the U.S. must continue down a steep path ensuring the production of each dollar of GDP releases only 189 grams of CO2, roughly half of what it releases today. Unfortunately the fracking revolution has already yielded most of its gains. So has the compact between China and Germany that delivered cheap wind and solar energy. Further carbon reductions will likely require America’s political class to embrace more expensive solutions. ~ Eduardo Porter