Since the Senate’s passage of the Democrats’ massive climate bill, backslapping and congratulations have been the order of the day among environmentalists from California to West Virginia. In their giddiness over the scale of the Inflation Reduction Act, they may want to pause to acknowledge the dynamics that allowed this moment to arrive.

The $370 billion package survived a political process that doomed many previous efforts because clean energy has finally become cheap enough to start moving the country away from fossil fuels.

“The cost difference between fossil and low-carbon energy has shrunk over the last 10 years in dramatic ways,” Michael Greenstone, who heads the Energy Policy Institute at Chicago, told me. “For the first time it has allowed modest policies to deliver real carbon reductions.”…
The Inflation Reduction Act relies on these new economics. Some of the clean energy tax credits, for instance, generate benefits that are three to four times as large as the costs. That kind of cost-benefit balance was not true 10 years ago. “Climate policy is much less expensive today,” Greenstone said. “We are picking the fruits of that.”
Areas of Focus: Energy Markets
Definition
Energy Markets
Well-functioning markets are essential for providing access to reliable, affordable energy. EPIC research is uncovering the policies, prices and information needed to help energy markets work efficiently.
Electric Power
Definition
Electric Power
As the electric power system faces new pressures and opportunities, EPIC research is working to identify the mix of policies needed to accelerate the global transition to clean, reliable, affordable...
Climate Change
Definition
Climate Change
Climate change is an urgent global challenge. EPIC research is helping to assess its impacts, quantify its costs, and identify an efficient set of policies to reduce emissions and adapt...
Climate Law & Policy
Definition
Climate Law & Policy
As countries around the world implement policies to confront climate change, EPIC research is calculating which policies will have the most impact for the least cost.
Climate Economics
Definition
Climate Economics
Climate change will affect every sector of the economy, both locally and globally. EPIC research is quantifying these effects to help guide policymakers, businesses, and individuals working to mitigate and...
Renewable Energy
Definition
Renewable Energy
Lower technology costs and supportive public policies are driving an increase in renewable energy in markets around the world. EPIC research is assessing the costs, benefits, and efficiency of policies...