Browsing by Subject "Inflation Reduction Act"

Now showing 1 - 6 of 6

Open Access
Expanding Finance for Nature-Based Solutions to Achieve Climate, Environment, and Community Goals: An Introduction for Green Banks and Community Lenders
(2023-11-14) Mason, Sara; Olander, Lydia
Nature-based solutions are actions to protect, manage, or restore natural or modified ecosystems that address societal challenges, simultaneously benefiting people and nature. There has been unprecedented recent government investment in nature-based solutions through programs funded by the Inflation Reduction Act and Bipartisan Infrastructure Law, but there remains a need for scaled-up financing of these projects in the United States. This need presents an opportunity to leverage green banks'—and other similar financial service providers like community development financial institutions'—financing capabilities. This document lays out a vision that describes why nature-based solutions are relevant and important to green banks' and community development financial institutions' climate- and community-driven missions, and what types of projects these institutions might support.
Open Access
Financing Nature-Based Solutions via the Greenhouse Gas Reduction Fund
(2023-11-14) Carney, Matthew; Mason, Sara; Olander, Lydia; Warnell, Katie
For the past decade, state and local green banks have successfully accelerated private investment in renewable energy, energy efficiency, and environmental infrastructure projects in their specific geographies. While green banks have historically focused primarily on clean energy and renewable projects, there is a growing interest in using nature-based solutions, or environmental infrastructure, to meet the climate and community goals shared by many of these mission-oriented financial institutions. The $27 billion Greenhouse Gas Reduction Fund (GGRF) in the Inflation Reduction Act—particularly the $14 billion National Clean Investment Fund and $6 billion Clean Communities Investment Accelerator—represents a once-in-a-generation opportunity to leverage private capital for investments in environmental infrastructure and nature-based solutions, but the groundwork needs to be laid now. This document summarizes the relevant GGRF funds and their applicability for nature-based solutions.
Open Access
Pathways to Net-Zero for the US Energy Transition
(2022-11-04) Ewing, John; Ross, Martin; Pickle, Amy; Stout, Robert; Murray, Brian
What will it take to achieve a net-zero carbon emissions footprint for the US economy by 2050? This report from Energy Pathways USA helps strengthen the evidence base on what will be required for a robust US energy transition and elucidates key barriers and opportunities for reaching net-zero goals. The authors examine past and present emissions trends and highlight common threads across recent quantitative analyses of potential net-zero trajectories, identifying sectors and shifts that could significantly boost decarbonization. Transforming the electricity grid—with clean energy production, increased high-voltage transmission, and grid modernization for resilience and reliability—is critical to all of these projections. Electrifying transportation and buildings, pursuing hydrogen as a fuel source, and expanding carbon management solutions are also commonly identified as significant ways to spur decarbonization. The authors also offer an overview of the federal and state decarbonization policy landscape—including analysis of the Bipartisan Infrastructure Law and Inflation Reduction Act passed into law in 2022. “For the US to reach its climate goals, these federal government investments will need to galvanize a multiplicative effect of private and subnational investments—along with construction of infrastructure and deployment of new technology—at an unprecedented scope, scale, and pace,” the authors note. The report closes with a selection of challenges and opportunities for the US net-zero project that require further attention: - Accelerated deployment of clean electricity and the electrification of vehicles - Accelerated energy efficiency and the electrification of buildings - Development and deployment of advanced energy technologies, including hydrogen; carbon capture, utilization, and storage; direct air capture; zero-carbon liquid fuels; and advanced nuclear and geothermal energy sources - Reduced industrial-sector emissions through electrification, efficiency upgrades, the deployment of advanced energy technologies, and low- or zero-carbon fuels - Reductions in methane emissions in oil and gas exploration and development - Enhanced conservation and sequestration in forest and agricultural lands - Accelerated state and regional coordination and efforts - Ensured equitability for the energy transition - Increased domestic supply chain sourcing to support all aspects of the transition The report concludes by outlining future areas of work for Energy Pathways USA. This Duke-based endeavor brings together corporate partners and thought leaders across multiple key industries to accelerate net-zero progress in the US.
Open Access
Projecting Electricity-Sector Investments Under the Inflation Reduction Act: New Cost Assumptions and Interactions with EPA’s Greenhouse Gas Proposal
(2023-12-04) Ross, Martin; Ewing, John; Murray, Brian; Profeta, Timothy; Stout, Robert
Energy Pathways USA, an initiative of the Nicholas Institute for Energy, Environment & Sustainability at Duke University, has released a report that offers new insights into US energy transition investments. This report comprehensively models the intersecting effects of the Inflation Reduction Act (IRA), clean electricity development cost increases, and the impacts of proposed US Environmental Protection Agency (EPA) greenhouse gas (GHG) regulations for fossil fuels. Core findings of the modeling include: * The IRA substantially accelerates the decline in US emissions through 2032, even in the face of recent renewables cost increases. After 2032, future reductions require additional policies. * Recent increases in financing and equipment costs have disproportionately large effects on renewables and have dampened the speed of the renewables transition but not altered basic trends. * Regardless of inflation, retail electricity prices and household electricity bills decrease under the IRA. * The availability of both sites and permitting for renewables can have a major effect on emissions trends. Reductions in the scope of renewables sites can potentially lead to emissions that are 50% higher in 2032 than otherwise expected under the IRA. * The IRA can dramatically change the desired investments in renewables in some regions of the country, while other regions might adopt similar strategies irrespective of the IRA. * If natural gas prices remain low, gas generation will largely displace nuclear once the IRA production credits expire, while also displacing many potential new renewables. * The electrification of transportation can increase emissions from generation, but total generation emissions would remain at levels well below those today; even before considering emissions savings from the vehicles themselves. * Some regions will require a significant number of miles of new spur transmission lines to connect new renewables to the grid. However, interregional expansion of long-distance transmission may be limited based on current costs. * The EPA GHG proposal can potentially cut in half the emissions remaining after the conclusion of the IRA. However, the proposal does not reach net-zero emissions from generation by 2050. * Under the EPA GHG proposal, the relative prices of natural gas and hydrogen, or costs associated with retrofitting gas units to co-fire with hydrogen, can have large effects on both emissions and costs. * Prior to 2038, the majority of emissions reductions from the GHG proposal are the result of coal carbon capture and storage. After 2038, hydrogen markets contribute most of the additional reductions, along with increased renewable generation (assuming hydrogen is cost competitive with natural gas). * If the clean hydrogen needed under the EPA GHG proposal is provided by electrolysis, significant amounts of new generation may be required. Solar photovoltaics expand to meet electrolysis needs, but they may not provide all requisite electricity. Energy Pathways USA is convened by the Nicholas Institute for Energy, Environment & Sustainability based at Duke University, in collaboration with the Energy Transitions Commission. This report constitutes a collective view of Energy Pathways USA. Members of Energy Pathways USA endorse the general thrust of the arguments made in this report but should not be taken as agreeing with every finding or recommendation. The companies involved have not been asked to formally endorse the report.
Open Access
Strengthening Supply Chains for US Decarbonization
(2023-08-28) Ewing, John; Earnhardt, Rachel; Carlson, Maria; Reeves, Joy
The 2022 Inflation Reduction Act provides new sources of capital and incentives for accelerating net-zero efforts. The law concurrently seeks to shift supply chains vital for US decarbonization to domestic sources and, more selectively, to links with free-trade partners. However, challenges abound. This policy paper responds by exploring opportunities inherent to rapidly creating just, low-carbon, and sustainable supply chains for key sectors of the US economy. These recommendations center upon the following key efforts: * Expediting permitting for critical decarbonization materials * Applying exceptions and special waivers on domestic content * Incentivizing recycling and materials innovation * Applying domestic content guidance progressively * Developing human capital * Developing decarbonization clusters * Expanding domestic exploration incentives * Prioritizing friendshoring, risk reduction, and low-carbon trade in foreign policy This report is part of Keys to the US Energy Transition: An Energy Pathways USA Series.
Open Access
Unlocking Clean Energy Projects Using Tax Chaining: A Primer
(2024-07-30) Britt, Clinton; Fins, Eric; Vujic, Tatjana; Profeta, Timothy
Chaining is an emerging concept that marries two highly consequential provisions of the tax code established by the passage of the 2022 Inflation Reduction Act (IRA): Transferability of tax credits and direct (also known as elective) pay to nonprofit or public entities in lieu of tax credits. Chaining links transferability and direct pay together by allowing those who earn a tax credit to sell the credit not to an entity with tax liability, but instead to an entity that can convert the tax credit into a cash payment. This policy brief provides a high-level overview of chaining, describes its necessity to raising the capital needed to meet climate goals and other benefits intended by the IRA, outlines specific examples of how chaining would work in practice, provides recommendations for addressing potential abuses, and delves into the additional benefits related to enabling local communities’ access to clean technology and affordable low-carbon energy resources to the extent the IRA intended. Besides unlocking additional capital, chaining could reduce the cost of capital, ease cash flow, and allow for different parties to share risk. The US Department of the Treasury is actively accepting comments on chaining until December 1, 2024. Through those comments, Treasury is seeking to ascertain, in part, how much more capital chaining can enable and how chaining would be executed.