The most consequential climate legislation ever passed in the U.S. is now in jeopardy thanks to President-elect Donald Trump. Photo: Shutterstock
This is part of an occasional series examining how the Trump administration may alter environmental laws.
In 2022, President Biden signed legislation making the most significant investments in clean energy and climate action this country has ever seen. The Inflation Reduction Act spent billions on solar and electric vehicle manufacturing, creating hundreds of thousands of jobs in those sectors. Billions more were spent protecting communities from the impacts of climate change. All told, economists projected that the Inflation Reduction Act would have created as many as 9 million jobs over the next decade while dramatically cutting U.S. carbon emissions.
President-elect Trump has made no secret that he intends to unravel all that progress. He has called climate change “a hoax” and vowed to “…rescind all unspent funds under the misnamed Inflation Reduction Act.”
But is it just that simple? Can he rescind the remaining IRA funds? While events are always changing, here’s what we believe is most likely to happen regarding the most extensive climate legislation the country has ever passed.
Although possible, Trump is unlikely to repeal the Inflation Reduction Act completely.
The reason? Too many jobs have been created in clean energy industries, like wind and solar technology. And most of those jobs – 80% of investments – are in Republican-led states like Oklahoma, Arkansas, and Mississippi. According to some models, clean energy projects announced during the IRA’s first two years were on track to create 621,000 direct and indirect new jobs—including 154,000 permanent jobs over the next five years. Businesses and individuals investing in clean energy projects would have benefited from as much as $1.2 trillion in tax credits over the law’s 10-year lifespan. Without these credits, many clean energy businesses say they will lose money, and some will have to lay off workers.
Constituents in Republican districts won’t be happy seeing new factories and businesses closing shop. Indeed, some House Republicans have already written House Speaker Mike Johnson a letter touting the legislation and urging a go-slow approach to tampering with it.
In short, the most likely scenario is a partial repeal of some IRA provisions, especially those incentives and rebates that directly benefit homeowners and consumers, like electric car incentives.
Trump can’t repeal the law without congressional approval.
It’s illegal for an administration to refuse to spend funds Congress has appropriated. Under the Impoundment Control Act, a president can put spending on hold or ask Congress to rescind funds but can’t just hold money for ideological reasons. However, Trump is a convicted felon and has clearly shown his willingness to flout the law. In fact, he violated the law previously when he withheld military aid to Ukraine during his first administration. Whether he violates the law again may depend on the pressure he receives from party members.
Some money has been committed and can’t be clawed back.
A lot of the funding for loans and grants for projects reducing carbon pollution has been “obligated,” meaning contracts have already been signed. At least $92.5 billion in grants had been awarded by November 2024. That was 80% of the funding available in the fiscal year that ended in September. It would be hard for a Trump administration to claw back any money already out the door to states, local governments, nonprofits, or businesses. However, unspent funds and unsigned contracts are in jeopardy. This is precisely why environmental groups and philanthropic organizations have worked furiously in the waning days of the Biden administration to ensure those selected for grants get their money.
Even so, these “obligated funds” could disappear if the government wants it that way.
Republicans in the House and Senate could pass measures to scale back the funding. And even if they don’t, the EPA could fail to pay invoices, claim fraud or noncompliance, and ask for refunds of unspent funding, all with the goal of blocking clean energy projects.
Trump will find ways to kill the IRA if he wants to. But he may not want to.
Certainly, there are myriad ways for Trump to kill the IRA, even if it is simply by engaging in lengthy court battles to slow down spending and stop the law’s momentum. He may not have to directly violate the law by overriding Congress. He can stall, delay, and focus on benefits with less of an organized constituency to complain – homeowners getting credits for solar energy, electric vehicles, and energy-efficient appliances.
However, just as the Affordable Care Act became interwoven into society and popular with citizens and businesses, it will likely be the same for the IRA, which holds real benefits for voters. Congresspeople who railed at the IRA earlier have come around to appreciate its benefits in their districts. So has the auto industry. Even oil companies like Exxon Mobil and Occidental like parts of the law providing billions for low-carbon energy projects they have in the works. The most likely part of the sprawling law to get overturned may be provisions around Medicare drug prices, new taxes on corporations, and additional funding to the IRS to help crack down on wealthy tax evaders.
States can and must drive important progress on climate.
Whether the IRA will be abolished or some aspects will remain in place may still be an open question, but we don’t need to wait to know that states can and should take proactive steps to drive progress on climate. Even with the IRA fully in place, states remain essential partners in the effort to slash climate-warming emissions and transition to a clean energy economy. In the immediate aftermath of the election, governors and other state and local officials across the nation reaffirmed their commitment to act locally to build on the clean energy advancements spurred by the IRA.
Here in New England, we have strong climate laws on the books in five of our six states that require substantial reductions in carbon emissions. These laws – coupled with public and private sector investments driven by the IRA and other federal and state policies – have created irreversible momentum behind the clean energy transition. CLF will continue to work across the region to ensure that – whatever happens in Washington – we continue to confront the climate crisis head–on here at home.
