Two years ago, President Biden signed into law the Inflation Reduction Act (IRA). Enacted with the dual goals of addressing inflationary pressures and climate change, the IRA represents one of the most ambitious and comprehensive pieces of legislation in recent history. This anniversary provides an opportune moment to reflect on the profound impact this landmark law has had on the US economy, public health, and the environment—and to ensure its benefits can be distributed equitably.

Cleaner Air, Healthier Lives: Investing in Green Energy and Public Health

One key component of the IRA is the allocation of funds toward renewable energy projects such as wind, solar, and battery power, driving job creation and fostering innovation in green technology. Companies across the country are now more incentivized to develop and implement renewable energy solutions, leading to a surge in employment opportunities ranging from construction to the manufacturing of clean energy infrastructure. Since July 2022, investments in clean energy technologies and infrastructure have totaled $493 billion, driving more than half of the growth in total US private investments and setting the stage for long-term sustainability and climate change mitigation.

The IRA has also reduced health-care costs for Americans by reining in the inflationary pressures of prescription drugs. The act instituted a $35 monthly cap on insulin products and empowered the federal government to negotiate prices directly with drug companies, easing financial burdens on Americans by stifling the price-setting power of the pharmaceutical industry. Through both its environmental and health-care provisions, the IRA’s impact on public health cannot be overstated. From lowering health-care costs for seniors and people with disabilities on Medicare to reducing 21 billion tons of toxic greenhouse gas emissions by 2050 through investing in clean energy, the act helps millions of Americans breathe cleaner air and live healthier lives.

 

Shared Prosperity: Creating a Better Tax System and Investing in Equity

The IRA ensures that its ambitious agenda is financially sustainable by implementing revenue-raising measures. These measures include the introduction of new taxes on large corporations and increased funding for the Internal Revenue Service to improve tax compliance. Additional efforts to create an excise tax on stock buybacks, impose a minimum tax of 15 percent on corporations with more than $1 billion in annual revenue, and enhance revenue collection have more than offset the IRA’s costs and have even helped generate additional revenue.

One of the lesser-discussed but equally important aspects of the IRA is its role in addressing economic inequality. The targeted investments and policies within the IRA are designed to ensure that the benefits of economic growth are broadly shared and promote social equity. As I examined in a recent Roosevelt Institute report, by creating jobs in renewable energy and infrastructure and supporting workforce development, the act has provided new opportunities for marginalized communities. Underlying clean energy and infrastructure investments is record-high employment in nonresidential building construction, which has increased by 11.6 percent since August 2022. This job growth has been pivotal in revitalizing local economies, especially in areas that were previously dependent on fossil fuels (also known as “energy communities”)—in fact, 36.8 percent of clean investments have been in these energy communities.

The IRA’s provisions aimed at supporting workforce development and training programs are also prioritizing investments in areas that have historically been overlooked. By fostering high-paying jobs in the clean energy sector and providing support to the workers who will fill those jobs, the IRA helps bridge the economic divide and foster inclusive growth, particularly in communities that need investment in renewables the most.

 

Sustained Momentum: Maximizing IRA Benefits into the Future

While the IRA has achieved much in its first two years, challenges and opportunities lie ahead for policymakers and government officials dedicated to the act’s success. First, they must ensure the continued and equitable distribution of its benefits. Second, advocates must sustain the act’s momentum by cultivating ongoing efforts to enhance public awareness and engagement with IRA initiatives. Lastly, proponents of the IRA should understand that adapting to the evolving landscape of clean energy technology will require persistent innovation and investment, and that securing a greener future means complementing these investments with a government-led wind-down of fossil fuel production.

Of these challenges, a central one is ensuring that the benefits of the IRA reach all communities, particularly those that have historically been marginalized or disproportionately impacted by environmental hazards. Addressing this challenge and maximizing the IRA’s impact for all will require efforts to improve transparency and accountability in the allocation of funds, as well as collaboration among the private sector and federal, state, and local governments.

The two-year anniversary of the Inflation Reduction Act marks a significant milestone in the journey toward a more sustainable, equitable, and prosperous future—one in which government steps up and helps shape the economy we need. Reaching the IRA’s full potential will require we remain vigilant and proactive in addressing the challenges that come with such transformative change.