The US banned imports of Russian oil and gas in response to Russia’s invasion of Ukraine. Prior to the IRA, President Biden’s actions to address inflation and other effects of high oil and gas prices in the short term may compromise his long-term climate goals. These concessions contradict President Biden’s promise on his first day in office to ban new oil and gas drilling on federal lands. However, while the largest share of the IRA is directed to clean technologies, it also includes several concessions for the fossil fuel industry such as requiring minimum acreages of public lands for drilling leases. The IRA is a toned-down version of a more ambitious USD 1.75tn bill (“ Build Back Better” ), which stalled in the US Senate. The ambitious bill injects USD 369bn to develop and deploy the clean energy technologies and investments essential to decarbonising the economy in the medium and long term. Taking this into account the Overall CAT rating for all US policies – domestic action, 2030 target and international climate finance is “Insufficient”.
The low climate finance provision is not enough to make up its fair share contribution and undermines the credibility of stated US intentions to line up as a global leader on climate change. Less encouraging, the US Congress approved USD 1bn for international climate finance for 2022, falling far short of President Biden’s pledge to provide USD 11.4bn a year by 2024, announced in September 2021. As a consequence, US domestic action is now rated on the border between “Insufficient” and “Almost sufficient”. LULUCF), which is still a distance from its 2030 target of 50-52% below 2005 levels. If no further policies are implemented, we project that in 2030, US emissions will decline to 26-42% below 2005 levels (incl. The CAT estimates that implementation of IRA will accelerate the decline in US GHG emissions but the US will need to implement additional policies to reach its proposed 50-52% reduction target (including LULUCF). The IRA marks a radical shift in US climate action and, by putting emissions firmly on a downward trajectory, it sends a global signal that the world’s largest historical emitter is now beginning to meets its responsibilities. It sets the country’s emissions on a trajectory toward meeting its climate commitment to cut greenhouse gases (GHG) emissions in half by 2030, below 2005 levels, but more action is required to get there. On August 16, 2022, President Biden signed into law the Inflation Reduction Act (IRA), the most ambitious and potentially impactful climate policy in US history.
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