Title: Inflation Reduction Act Falls Short in Tackling Rising Inflation, but Boosts clean energy Sector
One year after President Joe Biden signed the Inflation Reduction Act into law, economists and experts are questioning its effectiveness in curbing inflation. Despite its name, the law has had minimal impact on reducing inflation, which has primarily been driven down by a decline in energy costs and multiple interest rate hikes by the Federal Reserve. Inflation currently stands at 3.3%.
The Inflation Reduction Act has also turned out to be more costly than initially anticipated. The law’s provisions expanded green energy tax credits across the board, leading to an increase in estimated costs. The University of Pennsylvania’s Wharton School revised its previous estimate of $390 billion over ten years to over $1 trillion. The surge in costs can be attributed to the growing number of Americans taking advantage of electric vehicle tax credits for both new and used vehicles, as well as tax credits for clean electricity capital investments.
Ben LaBolt, the White House Communications Director, acknowledged the revised cost estimates but highlighted the positive impact on the clean energy sector. He emphasized that the law is attracting public and private capital into the clean energy industry, leading to significant growth in areas such as the solar industry in states like Arizona.
Data from the U.S. Energy Information Agency supports this claim, showing an increase in energy consumption through solar power. Americans consumed an average of 130 Btu of solar energy in the first four months of last year, which increased to 156 Btu this year. Local economist Jim Rounds noted that Arizona is experiencing growth in the high-wage clean energy sector, and if the state catches up to the U.S. average of 2.6% green energy jobs, it could generate an additional $7 billion in economic output and create over 40,000 new jobs. This growth would also contribute over $240 million in annual tax revenue to the state.
Rounds also emphasized the need for a coordinated statewide strategy to efficiently utilize the funds provided by the law. While many groups are working in the clean energy sector, a unified approach would ensure better coordination and maximize the benefits.
Overall, while the Inflation Reduction Act has fallen short in its goal of reducing inflation, it has shown promise in boosting the clean energy sector. The law’s provisions have attracted significant investment into clean energy and have the potential to generate substantial economic output and job growth. However, efficient utilization of the funds and a coordinated strategy are necessary to fully capitalize on these opportunities.
Original Story at www.abc15.com – 2023-08-17 01:51:00
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