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Chart: Which sectors will drive biggest emission cuts under climate bill?

The Inflation Reduction Act is expected to spur big greenhouse gas reductions in transportation, electricity, industry and more. See a sector-by-sector breakdown.
By Maria Virginia Olano

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Canary Media’s chart of the week translates crucial data about the clean energy transition into a visual format.

The Inflation Reduction Act is expected to reduce greenhouse gas emissions by 40 percent below 2005 levels by 2030, three independent modeling teams have found. But where exactly are those cuts going to come from?

According to analysis from one of those teams, working on Princeton University’s REPEAT Project, the law will lead to annual U.S. greenhouse gas emissions being lowered by 980 million metric tons of CO2-equivalent by 2030. The largest cuts are expected to come from electricity generation and transportation, which are currently the two largest sources of carbon pollution in the U.S.

The expected emissions cut from the power sector, around 360 million metric tons a year by 2030, will be achieved by accelerating the deployment of clean energy technologies, which the legislation supports through the extension and expansion of federal tax credits for solar and wind power as well as for energy storage, nuclear energy, carbon capture and hydrogen production.

To cut transportation emissions, the Inflation Reduction Act aims to speed up the deployment of electric vehicles through consumer tax credits for EVs and tax credits, grants and loans for commercial EVs. These measures are expected to decrease yearly emissions by about 280 million metric tons by the end of the decade.

The third-largest source of emissions cuts will be industry; the law offers incentives for industrial facilities to make efficiency upgrades and capture their carbon. The land carbon sinks category includes carbon sequestration resulting from conservation efforts and changes in management of forests and agricultural lands.

Reductions in methane are expected to result from the law’s first-of-its-kind fee on methane emissions from the oil and gas sector, bolstered by funding for equipment to detect and measure methane emissions and leaks. The law will also cut emissions from buildings through tax credits and rebates for electric home appliances and energy-efficiency upgrades.

Even though the Inflation Reduction Act will get the U.S. much closer to its climate goal of cutting emissions by 50 percent below 2005 levels by 2030, it’s not projected to carry the country all the way across the finish line. According to the REPEAT analysis, the act closes about two-thirds of the remaining emissions gap between current policy and the nation’s 2030 climate target.

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Maria Virginia Olano is editorial producer at Canary Media.