Can the IRA Trump-Proof Itself?

Building A Political Firewall Against IRA Repeal

Biden’s signature climate law, the Inflation Reduction Act, is squarely in Donald Trump’s sights. There is certainly a risk that a GOP sweep in November would result in repeal, as I’ve written before. Yet there are increasing signs that the IRA has created a powerful political constituency deep in Republican domains. This will make repealing or neutering the IRA politically difficult. It may also broaden support for future expansion of clean energy.

Subsidies in general are hard to repeal. The geography of IRA spending makes repeal that much more difficulty for opponents. Much of the IRA’s funding is going to Republican states like Georgia and swing states like Michigan, including multi-billion dollar factories to build batteries and electric vehicles. This map from the Citizens’ Climate Lobby tells the story:

Subsidies for nuclear power and carbon capture also create allies in unusual places for an environmental law.

Some of the fruits of this strategy are starting to appeal. Considers some of the events of the last few weeks. On Tuesday, according to E&E Daily, “more than 300 clean energy business leaders sent a letter to congressional leaders urging the parties to united to defend the IRA, and describing repeal as “nothing short of an economic and national security disaster. Repeal, the letter said, would pull the rug out from growing American businesses and the countless workers that have already been hired. It would leave factories half-built, with construction workers laid off mid-project, and orders from surrounding businesses unfulfilled.”

Also on Tuesday, the CEO of Shell Oil came out against repeal of the IRA. In his view, the IRA and the Bipartisan Infrastructure Law “seem to be working in terms of attracting a significant amount of capital in different states, whether it’s a red or blue state.” He added, “”You’re creating jobs. You’re actually starting to anchor new industries. And over time, what you will do is you will create supply chains locally that are able to satisfy the demands of many of these industries.” He pleaded for legal stability so that firms like Shell could safely make long-term investments.

On Friday, Politico reported on an energy summit that it had organized. At the session, “GOP lawmakers across the party’s ideological spectrum — from Western fossil fuel champions to leaders of the conservative climate movement — said they would want to protect certain energy tax credits in the Inflation Reduction Act should former President Donald Trump win a second term in November.”

The stories last week were not a fluke. Two weeks ago, E&E Daily reported that “two trade groups whose campaign arms overwhelmingly back Republican candidates — the U.S. Chamber of Commerce and the American Petroleum Institute — are already gearing up to preserve the law, even though both organizations largely opposed the Democratic-led legislation two years ago.” Supporters of the IRA point to the law’s economic impact, with “ at least 523 new projects” announced, amounting to what they say are 271,713 new jobs and more than $352 billion in investments.”

All that being said, there are no guarantees. Ideology might trump economists. Conservative activists and Trump himself are still adamantly opposed to the law. What we can say is that repeal will be much more difficult because of the strong economic interests on the IRA’s side. If there’s a Republican sweep, that will at least give the IRA a fighting chance of survival.