The recently signed Inflation Reduction Act has major environmental components, says a University of Illinois finance professor whose specialty is “environmental economics.”
And, says Don Fullerton, the new law included enough goodies to make it politically palatable. “There were concessions made to make sure this does not add to the deficit,” said Fullerton, “but is all paid for with some new taxes.
The main point of this is to spend some money for cleaning up greenhouse gases that contribute to climate change.”
Incentivizing the use of newer forms of energy is important, said Fullerton.
“Coal is naturally on the way out,” he said. “This is not a congressional war on coal. Coal is not going to be cost-effective in its own right much anymore, if at all. Natural gas is cheaper,” in part because of the advance of fracking.