A Republican push to dismantle clean energy incentives threatens to reverberate across the US by costing more than 830,000 jobs, raising energy bills for US households and threatening to unleash millions more tonnes of the planet-heating pollution that is causing the climate crisis, experts have warned.
A major tax bill passed by the Republican-held House of Representatives on Thursday morning will, as currently written, demolish key components of climate legislation signed by Joe Biden that has spurred a record torrent of renewable energy and electric vehicle investment in the US.
Under the reconciliation bill, tax credits for cleaner cars will end this year, with incentives for wind, solar and even nuclear energy projects scaled down and then eliminated by 2032. Clean energy manufacturing tax credits will be axed by 2031, while Americans seeking to upgrade their homes to cleaner or more energy efficient appliances will get no further subsidy after the end of this year.
“This bill is worse than what people envisioned – it pulls the rug out from facilities banking on these incentives, it raises everyday household costs by hundreds of dollars and undercuts any sort of action on climate change,” said Robbie Orvis, senior director at Energy Innovation, a non-partisan climate policy thinktank.
“You can’t overstate how significant this will be in weakening the US’s position. With inflation, tariffs and rising electricity use, it really couldn’t come at a worse time. It’s a really damaging bill.”
Since the passage of the 2022 Inflation Reduction Act, more than $320bn has flowed mostly to Republican-held districts in the form of new clean energy development and electric car construction. A further $522bn in investment is in the pipeline but is now menaced by the Republican bill’s removal of tax incentives.
“You’re talking about half a trillion dollars of investment at risk from these changes,” said Orvis. “Over 10 years, we found that these changes would reduce US GDP by over $1tn.”
The legislation also follows months of attacks on green spending from the Trump administration, including the end of energy efficiency programs and climate-focused grantmaking and loans.
“If you take all of that together, all of these pieces have the same effect: it’s going to increase prices on everybody,” one former senior Department of Energy official said.
Republicans wrangled over how far to slash the IRA’s tax credits.The bill as it stands will cause Americans’ energy bills to spike by stymying new renewable energy – often the cheapest form of new electricity generation – the non-partisan thinktank Energy Innovation calculated. The average household will see their bills rise by more than $230 by 2035. This comes on top of the cost of tariffs imposed by Donald Trump, who has attempted to aggressively push the US to “drill, baby, drill” for more oil and gas at the expense of solar and wind, which he has called “ugly” and “disgusting” and barred from federal lands and waters.
“This will all come at the expense of the environment,” said Orvis.
The new bill will also cause the US to emit 260m tonnes more pollution than it would’ve otherwise in 2035, which is more than the entire annual emissions of Spain. While emissions would still decline overall, the US is cutting pollution far too slowly to avert the worst impacts from the heatwaves, floods, drought and other disasters fueled by global heating.
And the legislation will cost the US 830,000 jobs by 2030 compared with the status quo, Energy Innovation found. That includes the direct loss of jobs in fields such as solar panel manufacturing and electric vehicle production, indirect job loss from the decreased investments and lower clean energy demand, and induced cuts resulting from consumer spending cuts attributable to layoffs, higher fuel costs, and other third-order effects.
“The Inflation Reduction Act was carefully crafted to create good-paying jobs in deindustrialized communities, underserved communities, and coal communities. We have seen that it is doing just that, creating good jobs you don’t need a college degree to get and opening up pathways to the middle class across the nation,” said Ted Fertik, vice-president of manufacturing and industrial policy at climate and labor advocacy group Blue Green Alliance. “Killing the tax credits in the Inflation Reduction Act is a direct attack on working Americans.”
Other experts have also warned about the devastating consequences of the legislation. By 2028, the reconciliation bill would kill approximately 300,000 jobs in the solar and energy storage sectors, found an analysis from the industry group Solar Energy Industries Association (SEIA) released on Monday.
Organized labor is increasingly speaking out against the megabill. This week, the president of the North America’s Building Trades Unions said: “Job cuts for blue-collar Americans should not foot the bill for billionaire tax cuts.” And last week, the president of an electrical worker union in Washington state wrote an op-ed defending the IRA.
Warring blocs in the GOP fought for months over the fate of the IRA’s green incentives. While some moderate, IRA-defending Republicans floated reconciliation language aimed at preserving its green credits, a handful of hardliners demanded an even quicker phaseout of clean energy programs.
The latter faction has critiqued the IRA on the grounds that it is anti-populist, with Oklahoma congressperson Josh Brecheen deeming it “nothing more than a massive, taxpayer-funded gift to green energy lobbyists and their leftist billionaire employers” and Texas congressperson Chip Roy critiquing calling it the “green new scam”.
But the rich are expected to benefit most from the reconciliation bill’s tax cuts, while the rollback of IRA credits is expected to raise household costs and slash employment – particularly in red districts, which have enjoyed the vast majority of investment spurred by the IRA.
The Republican legislation, which will act as an effective repeal of the climate bill, is compounded by the actions of the Trump administration, which has set about eviscerating rules limiting pollution from cars, trucks and power plants and sought to halt other efforts to tackle the climate crisis.
The combined impact of all these actions is set to exact a greater toll than the bill itself, resulting in as much as 730m tonnes of extra pollution over the next decade, a separate study by Rhodium, another energy research group, has found.
“This is just about as bad as it gets,” said Ben King, associate director at Rhodium. “If you’re a solar or wind developer, there’s no reason you’d choose the US rather than China after this. The proposals are cutting off the nose to spite the face, it’s unclear what the policy objectives are other than they don’t like the policies.
Michael Saintao contributed reporting
