How the Inflation Reduction Act and Trump’s Tax Bill Reshape U.S. Climate Progress

The Inflation Reduction Act (IRA), passed in 2022, was widely regarded as America’s first comprehensive climate law. However, in 2024, significant portions of the IRA were repealed as part of President Trump’s One Big Beautiful Bill Act (OBBBA).

Among the repealed provisions were the IRA’s solar and wind tax credits, which had been scheduled to remain in effect into the 2030s. Tax credits for electric vehicle purchases were also eliminated. Preserved policies include tax credits for grid-scale battery storage, nuclear energy, enhanced geothermal, and subsidies for automakers producing electric vehicle batteries.

While the OBBBA was enacted less than a year ago, solar and wind developers still have until July 2025 to begin construction on projects to qualify for the original IRA tax credits. Researchers are now beginning to assess the long-term effects of these legislative changes.

New Study Evaluates Combined Impact of IRA and OBBBA

A new paper published in Nature Reviews Clean Technology this week examines how the IRA and OBBBA interact and their combined effects on the U.S. energy mix and carbon emissions. The study was co-authored by John Bistline, Head of Science at climate tech startup Watershed and former leader at the Electric Power Research Institute (EPRI), and Ryna Cui, Associate Research Professor at the University of Maryland School of Public Policy and Research Director for the university’s Center for Global Sustainability.

Robinson Meyer, Founding Executive Editor of Heatmap News, discussed the findings on the Shift Key podcast:

“We actually don’t know yet what the Trump law will ultimately do to the energy system. It was passed less than a year ago. But we are starting to get a sense of what its ultimate effects may be.”

Key Questions Addressed in the Study

Meyer, Bistline, and Cui explored several critical questions in their conversation:

• What did modelers get right and wrong about the IRA?
• Will emissions still decline despite the repeal of key provisions?
• How do the IRA and OBBBA interact to shape U.S. energy policy?

The discussion highlighted the uncertainty surrounding the long-term impacts of these legislative changes on America’s energy transition and climate goals.