Charting the path of U.S. emissions with the IRA

One law can only do so much, and as the chart above shows, the incentives in the Inflation Reduction Act will barely dent U.S. emissions.

What's happening: As we wrote earlier this month, the IRA's strong support for carbon capture is expected to drive investment in cheap natural gas — leading to more emissions from producing, storing, moving and burning the fossil fuel.

Plus: Natural gas's cleaner alternative, hydrogen, will take time to deploy due to its high upfront cost and reliance on new infrastructure like pipelines.

Meanwhile, the IRA hasn't yet triggered the deluge of private investment that the law's advocates had hoped for — and which is needed to get to net zero by midcentury.

• The law was always aimed at catalyzing private investment. Investors so far are sitting on the sidelines as markets muddle through a global chill.

Yes, but: It's only been a year. Federal agencies are still hammering out the specifics of who and what exactly will qualify for incentives.

Bottom line: The "pace of transition," Moody's wrote in a note yesterday, "hinges on private sector uptake and execution."