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How to spend one trillion dollars: the US decarbonization conundrum

Why we must treat decarbonization policies as an experiment and put in place measures now to evaluate what works best.
  1. Peter Christensen

    1. Peter Christensen is an associate professor in the Economics Department, University of California, Santa Cruz, California.

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  2. Patrick Baylis

    1. Patrick Baylis is an assistant professor in the Vancouver School of Economics, University of British Columbia, Vancouver, Canada.

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  3. Teevrat Garg

    1. Teevrat Garg is an associate professor in the School of Global Policy and Strategy, University of California, San Diego, La Jolla, California, USA.

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  4. Shanjun Li

    1. Shanjun Li is a professor of applied economics and policy in the College of Business at Cornell University, Ithaca, New York, USA.

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  5. Gordon C. McCord

    1. Gordon C. McCord is an associate teaching professor of economics in the School of Global Policy and Strategy at the University of California, San Diego, La Jolla, California, USA.

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  6. Erich Muehlegger

    1. Erich Muehlegger is a professor of economics at the University of California, Davis, California, USA.

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  7. Erica Myers

    1. Erica Myers is Canada Research Chair in environmental, energy and resource economics in the Department of Economics, University of Calgary, Calgary, Canada.

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  8. Emma Noble Smith

    1. Emma Noble Smith is a student in the School of Geography and the Environment at the University of Oxford, Oxford, UK.

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  9. David S. Rapson

    1. David S. Rapson is policy adviser to the Federal Reserve Bank of Dallas, Dallas, Texas, and professor of economics at the University of California, Davis, California, USA.

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In the past three years, the United States has legislated to spend more than US$1 trillion on decarbonization. The Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) focus that spending on policies that will accelerate the country’s transition to a low-carbon economy, such as tax credits for renewable energy and federal subsidies for electric vehicles.

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Nature 634, 1050-1052 (2024)

doi: https://doi.org/10.1038/d41586-024-03474-3

The views expressed here are those of the authors and do not necessarily reflect those of the Federal Reserve Bank of Dallas or the Federal Reserve System.

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Competing Interests

The authors declare no competing interests.

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