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Leveraging the IRA to Achieve 80x30 in the US Electricity Sector

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  • Domeshek, Maya

    (Resources for the Future)

  • Burtraw, Dallas

    (Resources for the Future)

  • Palmer, Karen

    (Resources for the Future)

  • Roy, Nicholas

    (Resources for the Future)

  • Shih, Jhih-Shyang

    (Resources for the Future)

Abstract

The Inflation Reduction Act (IRA) promises to deliver important reductions in CO2 emissions from the electricity sector along with a host of other benefits to citizens and electricity consumers, but it falls short of achieving the 80 percent reduction below 2005 levels by 2030 (80x30) consistent with meeting the nation’s Paris goals. This paper examines the consequences of the IRA and of policies designed to hit the Paris targets for generation mix, consumer costs of electricity, the federal budget, air quality, and human health. Our modeling shows that the IRA substantially reduces the allowance price for necessary an emissions cap to meet the 80x30 goal in the power sector and that doing so yields savings to consumers, particularly those with lower incomes, and additional health benefits beyond those promised from the IRA.

Suggested Citation

  • Domeshek, Maya & Burtraw, Dallas & Palmer, Karen & Roy, Nicholas & Shih, Jhih-Shyang, 2023. "Leveraging the IRA to Achieve 80x30 in the US Electricity Sector," RFF Working Paper Series 23-42, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-23-42
    as

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    File URL: https://www.rff.org/documents/4243/WP_23-42_11.13.pdf
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    References listed on IDEAS

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