The latest annual Energy Outlook research put out by the energy giant BP explores the possible speed and shape of the energy transition to 2050 under different scenarios – and the signing into law of the Inflation Reduction Act in the US in 2022 is presented as very significant.
The IRA was confirmed in August 2022 and includes a significant package of mostly supply-side measures supporting low-carbon energy sources and decarbonising technologies in the US.
The modelling of the IRA for the research focuses on its potential impact on the US energy system, and the search ties its impact to BP’s ‘new momentum’ scenario. In this scenario, US carbon emissions falls by around 22% by 2030 relative to 2019 levels, and by around 60% by 2050. It is the least idealised of the three scenarios presented.
Some of the main impacts of the IRA on the ‘new momentum’ projection are:
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