Newswise — On Tuesday, President Joe Biden signed the historic Inflation Reduction Act, which is the first major piece of federal climate legislation ever to be signed into law in the United States. Tulane University climate change policy and politics expert Joshua Basseches is available to discuss how much of the new law’s success will depend on how states decide to move away from fossil fuels to take advantage of clean energy incentives.
“The bill uses a ‘carrots-based’ approach to dealing with climate change, said Basseches, the David and Jane Flowerree Professor in Environmental Studies and Public Policy at Tulane University School of Liberal Arts. “As a budget reconciliation deal, the tools available within the bill are limited to incentives —though the dollar figures are hugely significant —rather than carbon pricing or regulatory policies, in which implementation details are carefully spelled out.”
“Each state has its own regulatory regime governing new sources of electricity generation, including rooftop solar, as well as how costs and benefits associated with new generation are distributed. While some states have more market competition than others in the electricity sector, even those states that are more market-oriented set different ‘rules’ for the market that end up affecting how quickly renewables are able to penetrate the market and how quickly fossil-fueled electricity sources are phased out.
“In essence, this new federal law has the potential to reshape the energy economy at the macro-level, making the wholesale cost of renewables less expensive in comparison to fossil fuels than ever before. Nevertheless, Washington D.C. will quickly move on to the next big thing, and how rapidly particular states shift their portfolios will remain entirely dependent on the decisions of state-level regulators and the many political forces involved in their decision-making, which are the subject of my ongoing research.”
Basseches added: “In the last few decades, during the time the federal government has been unable or unwilling to pass meaningful regulatory policy, and truthfully, for many more decades even before that, energy policy has been primarily decided by state governments, which are the principal regulators for all aspects of electricity governance, including generation, transmission and distribution of electricity to homes and businesses.”
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