The Inflation Reduction Act Took U.S. Climate Action Global. Here's What Needs To Happen Next

When the U.S. Inflation Reduction Act (IRA) passed a year ago, some of our international allies greeted it with a level of concern if not consternation given the IRA’s focus on expanding U.S. clean energy markets. But in fact, the IRA was not intended to be, nor is it, protectionist. Its mission, coupled with the Bipartisan Infrastructure Law and the CHIPS and Science Act, was to spark private- and public-sector investment across the U.S.—in red and blue states—and beyond, while restoring U.S. leadership on the global stage.

In its first year of implementation, the IRA has been a game changer. It spurred a race to the top. The world’s major economies rushed to develop their own competitive climate plans and opened up unprecedented opportunities to take a big bite out of global carbon emissions while enhancing domestic economies, growing good-paying clean energy jobs, saving families money, and improving air quality and health outcomes—especially for communities most in need.

The European Union’s Green Deal Industrial Policy was announced in February this year. In March, Canada’s budget included IRA-inspired tax credits to spark production of minerals and EV components while strengthening labor conditions. France’s new climate framework was unveiled in May. And Germany plans to expand its battery cell production, create a new hydrogen center, and initiate investments in chip manufacturing.