What the Inflation Reduction Act Means for U.S. Engagement at the U.N. Climate Talks | Article

When world leaders gather in Sharm El-Sheikh, Egypt, for the United Nations climate change conference (COP27) in November, they will kick off a new era of international cooperation on climate change. This cooperation will be focused on implementing the goals set under the Paris Agreement and affirmed through the Glasgow Climate Pact.

Previously, countries were figuring out if they could agree on frameworks to reduce greenhouse gas emissions and adapt to climate change. Now, key questions and goals are focused on action: What is the progress made so far on emission reductions and climate adaptation? And how can this progress be accelerated?

The U.S. delegation will arrive at COP27 with the country’s biggest climate policy ever in hand—aligning well with the overall shift from planning to action. But how does this domestic action actually influence what happens at COP27 and beyond? How do we know if the Inflation Reduction Act (IRA) (P.L. 117-169) and the Infrastructure Investment and Jobs Act (IIJA) (P.L. 117-58), in conjunction with other country commitments, are consistent with keeping global warming well below 2 degrees Celsius? Do these new laws address all the U.S. commitments made under the United Nations Framework Convention on Climate Change (UNFCCC)?

Source: U.S. NDC

Initial analyses by experts show that the IRA, if fully and effectively implemented, has the potential to reduce U.S. emissions by about 40 percent by 2030 compared to 2005 levels. U.S. actions taken as a result of the IRA and IIJA—such as energy efficiency improvements for buildings, widespread renewable energy deployment, and scaled-up electric vehicle and bus deployment—should help to bend the emissions curve downward, as articulated in the above graph. This would put the United States closer to meeting its 2030 target of reducing emissions by 50 to 52 percent compared to 2005 levels. But it’s a first step rather than a job completed. The analyses assume full and effective IRA implementation, which is uncertain, and there is at least another 10 percent of emission reductions that will need to occur beyond the provisions of the IRA in order to meet the 50 to 52 percent target.

The United States set this emissions reduction target through its nationally determined contribution (NDC). NDCs are at the heart of the Paris Agreement. Rather than setting the same emissions target for every country or creating a set of different targets for different groups of countries, the Paris Agreement calls on every country to generate and work towards its own greenhouse gas emissions reduction target.

In order to assess overall progress and ensure the constant reviewing and updating of country commitments, the Paris Agreement sets in place a process called the global stocktake. The first global stocktake kicked off in November 2021 and will conclude by November 2023 at COP28. Subsequent stocktakes will happen every five years, and, in the intervening years, countries are encouraged to release updated, and ideally more ambitious, NDCs. The global stocktakes will not only evaluate climate mitigation, but also adaptation, capacity building, and climate finance. The emission reductions expected from the IRA and IIJA and the laws’ adaptation provisions will feed into the global stocktake.

In addition to the global stocktake’s regular evaluation of adaptation measures, the UNFCCC has other established avenues to coordinate on adaptation, including a program for countries to submit and update national adaptation plans. While adaptation does appear in both the IRA and IIJA, the United States still lacks a cohesive national strategy for adaptation. Developing a national adaptation plan would feed into the development of a global goal on adaptation, which UNFCCC countries have agreed is necessary. Lessons learned from developing and scaling up adaptation-related programs that received funding through IRA or IIJA may serve as key inputs to the Glasgow-Sharm El-Sheikh Work Programme on the Global Goal on Adaptation. The program is, in part, trying to figure out how to measure the effectiveness of adaptation measures, by determining what factors actually make communities more resilient to climate impacts.

One area that the IRA and IIJA do not touch upon is international climate finance, or financial support for the countries most impacted by climate change but least responsible for greenhouse gas emissions. Developed countries have long fallen short on their financial commitments to developing ones, including missing a key UNFCCC milestone agreed to in 2009 to deliver $100 billion in climate finance per year by 2020.

Though the recent landmark laws do not include international climate finance, the United States has a central role to play on the issue. The primary avenue to deliver this finance is through annual Congressional appropriations. As this graph shows, just over $1 billion was enacted through annual appropriations in fiscal year 2022. However, this remains far below the Biden-Harris Administration's 2021 commitment to provide over $11 billion per year in climate finance by 2024. This remains a significant gap that is not filled by the new U.S. laws and has yet to be addressed through other policy avenues.

Source: Natural Resources Defense Council (NRDC)

Despite the serious work ahead, the IRA and IIJA represent the most progress the United States has ever been able to show at a UNFCCC meeting. And they must pave the way for future work. Congress will play a vital role in continuing to advance U.S. work to not only reduce emissions, but adapt to climate impacts and support other countries in their efforts to address this global crisis.

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