Chart: Repealing the Inflation Reduction Act would harm US businesses

Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format. Canary thanks Clean Energy Counsel for its support of the column.

Repealing the Inflation Reduction Act — one of President-elect Donald Trump’s campaign pledges — would be disastrous not only for climate efforts but also for U.S. businesses.

That’s according to a recent survey of 929 U.S. clean energy firms commissioned by the nonprofit E2, which focuses on climate jobs. The research, conducted in August, targeted employers in energy efficiency, energy storage, transportation, and other industries. Most of the surveyed firms (61 percent) have been in business for over a decade. 

Half the employers surveyed said they’d lose business and see revenue fall if the Trump administration killed the Inflation Reduction Act. Nearly four in 10 said they’d have to conduct layoffs. A smaller but significant portion of respondents — 15 percent — said that if the law were repealed, they’d have to shutter their business. Another 16 percent said they’d pick up and move to another country.

These potential outcomes are at odds with Trump’s vision of reinvigorating domestic industry. Nearly four in 10 of the participating firms are in manufacturing or assembly, and the Inflation Reduction Act has already sparked $115 billion in major manufacturing projects for electric vehicles, batteries, solar panels, and more.

Most of this new industrial activity is happening in Republican-leaning states — Georgia and North Carolina are the biggest beneficiaries of both investment dollars and jobs. And rural areas and smaller towns have disproportionately benefited from the law, meaning they’d also experience the brunt of the negative impact if it is repealed, per E2.

Because states that lean Republican are seeing so many economic benefits, experts have predicted that the law will prove difficult to undo, despite the GOP having control over the presidency and Congress.

In an August letter, 18 Republican representatives urged House Speaker Mike Johnson (R) not to fully repeal the law. ​“Energy tax credits have spurred innovation, incentivized investment, and created good jobs in many parts of the country — including many districts represented by members of our conference,” the representatives wrote.

Johnson, for his part, said in September that he’d use a ​“scalpel and not a sledgehammer” on the Inflation Reduction Act, though he also claimed that the law has been ​“terribly harmful to the economy.”

Even if the Trump administration decides to follow Johnson’s approach and forgo the sledgehammer, a scalpel can still do plenty of damage to U.S. clean energy manufacturing and the energy transition, which needs more, not less, investment.

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