The Energy Information Administration’s most recent Annual Energy Outlook pours cold water on claims that the Inflation Reduction Act (which does not actually reduce inflation) was a game changer for climate change action. The EIA’s forecast, which incorporates the major provisions of the IRA, projects only a slight 9% additional reduction in carbon dioxide emissions by 2030 from levels already achieved in 2020. But the IRA will be a boon to the select businesses it chose to subsidize, all coming out of the pockets of taxpayers. A report from Goldman Sachs estimates that the tax subsidies in the IRA could end up costing as much as $1.2 trillion, three times the CBO estimate from last year. This upward revision is thanks to the uncapped nature of the tax credits, anyone that can qualify can get a cut of the federal spending gusher. And there has been a mad scramble to lay hands on that “free” money, fanning the flames of inflationary pressure even more.
In contrast to the Inflation Non-Reduction Act of 2022, H.R. 1 actually would have some inflation-reducing effect. Repealing taxes on energy, producing more energy domestically, and reducing the cost of building and maintaining energy infrastructure would all reduce energy costs, which have been a large source of overall inflationary pressure. The Biden administration has spent the last two years complaining about gas prices being too high, but along comes legislation that would address that very problem and the President vows to veto it.
It’s not just new legislation, even where the Biden administration has the ability to take real action to increase domestic energy and mineral production, they have instead taken every opportunity to restrict or block development. While the Biden administration was forced to approve the Willow project in Alaska, allegedly even over the objection of President Biden himself, they have used that limited project as an excuse to attack much of the rest of Alaska’s energy development. And it’s not just oil and gas the administration is stopping, mining for the minerals that their own favored industries need has also been obstructed. The problem of course is that this administration also wants to build trillions of dollars in subsidized transmission, offshore wind, battery storage and the like. But all that infrastructure and construction doesn’t materialize from thin air, the inputs have to be dug up, transported and processed somewhere.
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