Illustration: Natalie Peeples/Axios
The IRA will likely remain a fixture of U.S. energy and climate policy for years to come, no matter who wins the election.
Why it matters: A win by former President Trump would massively change implementation of the law and rip up greenhouse gas regulations across the board. But President Biden's climate law may still reverberate through the tax code.
Zoom in: Trump, a longtime climate change denier, often refers to the law as the "green new scam" and has pledged to rescind "unspent" IRA money.
- Indeed, his administration could halt or slow spending on DOE loans and grant programs, where a huge pot of money still remains.
- On the Hill, Republicans would try to repeal whatever is left of the $41 billion that EPA got in the IRA, as well as the law's methane fee and EV tax credit — particularly if they get a trifecta and a shot at a reconciliation bill.
Between the lines: But talk to virtually any Hill Republican, and they'll openly concede there are parts of the law they like — namely, the tax credits.
- A massive spigot of cash is flowing into GOP districts right now, and it would be difficult for lawmakers in swing districts to vote against business-friendly incentives.
- Just take as an example the August letter in which 18 GOP lawmakers said energy tax credits should not be repealed.
- Or take Qcells, which is investing billions for solar manufacturing in a deep red slice of Georgia, with the help of DOE loans and the IRA's 45X tax credit.
Yes, but: The law could take a hit no matter who wins the election.
- Even a Harris White House would have to stare down a 2025 tax debate in which Republicans will propose using IRA funds as pay-fors.
- And already there's bipartisan talk of adding additional anti-China protections to the 45X credit.
- One big risk to the tax titles of the IRA is a possible Republican move to cap its currently uncapped energy tax incentives, which could significantly slim down credits that many now expect to cost upward of $1 trillion.
The big picture: A Trump victory would create chaos for IRA programs and uncertainty for the businesses trying to use them.
- But America's incentive-based energy transition may just continue on a smaller scale.
