A new study warns that repealing the Inflation Reduction Act (IRA) would devastate U.S. clean energy investment, handing economic and geopolitical advantages to China while stalling progress in American manufacturing.
IRA Repeal: Billions at Stake
The Inflation Reduction Act (IRA), heralded as a cornerstone of U.S. climate and industrial policy, has catalyzed hundreds of billions of dollars in clean energy investments across the country. However, President-elect Donald Trump has vowed to dismantle the law, labeling it “the greatest scam in history.” This move threatens to undo significant progress and leave the U.S. trailing in the global clean energy race.
A recent study by the Net Zero Industrial Policy Lab underscores the risks of repealing the IRA, predicting severe economic consequences for American manufacturing and trade. The analysis estimates that repealing the law would create up to $80 billion in investment opportunities for competitors like China and result in the U.S. losing factories, jobs, tax revenue, and $50 billion in exports.
China Poised to Benefit from U.S. Missteps
Since its enactment, the IRA, alongside the Bipartisan Infrastructure Law, has driven over $200 billion in U.S. clean energy investments, with three-quarters of these projects located in Republican districts. This influx of funding has bolstered domestic manufacturing, even amid fierce competition from China’s industrial overcapacity in clean energy products.
The Net Zero Industrial Policy Lab warns that repealing the IRA would not halt the global energy transition but would diminish America’s role in shaping it. “A repeal would hamper the U.S. bid for clean technology leadership, leaving the country sidelined in the global value chains of the future energy economy,” the study states. The result: accelerated economic and geopolitical decline.
A Pivotal Moment for U.S. Clean Energy Policy
While GOP lawmakers have historically criticized the IRA, its tangible benefits—including tax subsidies and job creation—have softened some opposition. Investments in clean energy projects have flowed disproportionately to Republican districts, complicating efforts to repeal the law outright.
And here’s the rub: for all the heated rhetoric, the IRA is proving its worth where it matters most—in economic results. The U.S. isn’t just competing against global players; it’s playing to win in a market where leadership will shape decades of industrial and geopolitical power. Scrapping the IRA now isn’t just a mistake; it’s handing the keys of the future clean energy economy to competitors on a silver platter.
As the global energy landscape shifts, maintaining the IRA could ensure that the U.S. remains a key player in clean technology value chains, safeguarding economic resilience and geopolitical influence in the decades to come.
