The IRA

That could be the Irish Republican Army, or your Individual Retirement Account, but today it refers to the Inflation Reduction Act. Columbia economist Gernot Wagner has a very  favorable view of the Act regarding climate change. (You need to register to read but it's free.) It actually doesn't have a lot of new spending -- just $369 billion over ten years. Yeah yeah, that sounds like a lot of money but by federal government standards it's peanuts. It also authorizes the Department of Energy to make up to $250 billion in loans. However, this modest initiative is well structured to elicit vastly larger private investment.

Wagner also debunks some common misconceptions -- or rather, Fox News lies -- about the global response to climate change, notably the role of China vs. the U.S.

 

According to Bloomberg, global investments in the energy transition topped $750 billion last year, with China alone spending $266 billion, compared to $47 billion in Germany and $114 billion in the US. And McKinsey & Company offers an even more generous accounting, putting total current investments in clean energy and its supporting infrastructure at $2 trillion. 

And:

A strong performance in the clean-energy race will be good for business, the economy, and national security. And this is not just a transatlantic affair. China arguably has a solid lead in the race to manufacture much of the energy transition’s hardware. It now produces over two-thirds of all solar panels and lithium-ion batteries, and around half of all wind turbines sold globally. But by doubling down on industrial policy, the US may well peel off some of this market share. 

Of great importance, the Act will result in lower energy prices for U.S. consumers, and consumer savings on cars and appliances. So yes, it really will reduce inflation, although not immediately. There are plenty of other Fox News lies about the Act, notably about the Internal Revenue Service, but that's not so much on topic here. Anyway, don't watch it if you want to hold on to your brain cells. 

Update: Obviously I did too talk about inflation. Read the above paragraph.