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Laws and Policies

CCLW

CCLW national policies

Inflation Reduction Act

Inflation Reduction Act: Summary of Energy Security & Climate Change Investments

Approved by House

Signed by President Biden

The Inflation Reduction Act (IRA) is a wide-ranging document aiming at reducing inflation, improve healthcare across the country, invest in domestic energy production and manufacturing to increase security of supply and jobs while reducing carbon emissions and focusing on disadvantaged communities. One of the main objective of the Act is to lower energy costs while making cleaner technologies affordable, thus also reducing future costs of climate inaction. It further invests through federal support in a wide range of economic sectors to encourage their decarbonisation efforts. It also aims to increase and resilience among rural areas by supporting climate-smart practices for farmlands and forests.The Act is based on a series of tax credits, grants and subsidies with a $369 billion funding for climate- and energy-related purposes. Prominent incentives contain in the Act aim to boostthe U.S. manufacturing and buying of electric vehicles; U.S. manufacturing of solar panels, wind turbines and batteries; carbon-capture solutions ; green hydrogen production.The Act contains clauses on environmental justice 1) on legacy pollution reduction, 2) on affordable and accessible clean energy for disadvantaged communities, and 3) on better quality of life and good jobs (urban forests, renewable energy, adaptation programs).
In July 2025, Congress passed the 'One Big Beautiful Bill' Act, which repeals section 50262 of IRA and restored earlier legal provisions that had been amended by section 50262. Section 50262 of IRA increased the minimum royalty of gas leases from 12.5% to 16.66%, in addition to increasing the minimum rates for renting and bidding on oil and gas leases.
Furthermore, as of March 2025, the status of some of the other provisions of this entry are likely impacted by the Trump-Vance administration’s regulatory rollback on climate action and ongoing litigation challenging the rollback. To learn more about the rollback, visit the <a href="https://climate.law.columbia.edu/content/climate-backtracker" target="_self">Sabin Center’s Climate Backtracker</a>.

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An aim to achieve a quantifiable outcome within a given time-frame, set by an institution such as a national government.

Policy instruments are techniques or tools used by governing authorities to promote certain policies in order to achieve predetermined goals. Put simply, instruments are how a government tries to achieve its goals, with this taxonomy being focused on national policy instruments.

Risk is the potential for adverse consequences resulting from the dynamic interplay between (climate-related) hazards, exposure, and vulnerability of affected human or ecological systems.

Groups  of people who are adversely affected by climate change or the response to it

A set of principles, processes, and practices that build economic and political power to shift from an extractive economy to a regenerative economy.

Renewable energy means all forms of energy produced from renewable sources in a sustainable manner.

Fossil fuel is a generic term for non-renewable energy sources such as coal, fossil gas, and oil (including crude oil, and petroleum products), that can be used for electricity and heat generation. Fossil fuels are hydrocarbons formed from pressurised and heated organic material buried over millions of years.

Molecules in the atmosphere that play a key role in the greenhouse effect by trapping heat radiating from Earth’s surface.

Area of the economy in which actors engage in identical or related activities.

In human systems, the process of adjustment to actual or expected climate change and its effects, in order to moderate harm, increase resilience or exploit beneficial opportunities. In natural systems, the process of adjustment to actual climate change and its effects; human intervention may facilitate adjustment to expected climate change and its effects.

The management and allocation of funds, assets and investments to meet various objectives

Actions or measures to adapt terrestrial systems to climate change.

Energy derived from biological compounds that are renewable due to their short life cycle within the carbon dioxide cycle.

Financial actors and resources that are primarily directed towards climate change mitigation, adaptation and compensation.

A tax advantage is an economic benefit applied to certain accounts or investments that are, by law, tax-reduced, tax-deferred, or tax-free. This can apply to investments in areas such as green energy projects or the agricultural sector, where tax advantages can help manage financial risks.

The activities of industries that transforms raw materials into finished goods through industrial processes.

The activities of industries involved in the production, distribution, and sale of energy, including electricity, gas, and renewables.

Air pollution involves harmful contaminants in the air, affecting both indoor and outdoor environments. It can lead to health issues like respiratory diseases and heart problems, and climate impacts such as global warming. Pollutants can damage plants, trees, habitats, and water bodies like rivers and lakes.

Activities that relate to the production of goods and services from forests.

Actions or measures to adapt freshwater systems to climate change.

The release of heat-trapping gases, primarily from human activities such as burning fossil fuels, agriculture and industry.

People who are less able to respond to the effects of climate change due to having limited financial or physical assets

Actions to adapt and increase the resilience of rural and urban infrastructure and settlements to climate change.

Activities that involve the cultivation of crops and raising of livestock for food, fibre, and other products essential for human life and industry.

Either money or something of monetary value is transferred between two or more organisations, people or countries.

Social protection systems consist of policies that help people manage social risks in order to prevent poverty and maintain decent incomes and living standards

Activities that involve planning, designing and building infrastructure, residential, and commercial structures.

A loan is a policy instrument where funds are provided to a borrower with the expectation of repaying the principal plus interest.

Actions or measures to adapt freshwater, coastal and marine systems to climate change.

A potent, short-lived greehouse gas, largely released from livestock, fossil fuel extraction and waste management.

This sector involves activities to move goods and people, alongside the storage of products.

Social inclusion is the process of improving the terms on which individuals and groups take part in society—improving the ability, opportunity, and dignity of those disadvantaged on the basis of their identity.

Fossil gas, commonly known as natural gas, is a fossil fuel consisting chiefly of methane with smaller amounts of other hydrocarbons and trace gases, found in underground deposits.

Inflation Reduction Act: Summary of Energy Security & Climate Change Investments

Policy instrument

Risk

Impacted group

Just transition

Renewable energy

Fossil fuel

Greenhouse gas

Economic sector

Adaptation/resilience

Finance