The Future of American Energy Dominance Hinges on Regulatory and Permitting Reform

This is why it is often said that there are many regulatory kinks in the hose that prevent investment capital from flowing and developers from building. It is also noted that the IRA tax credits turn up the pressure on that kinked hose. With the projected taxpayer cost of the IRA to balloon to two to five trillion if left untouched and the aforementioned regulatory bottlenecks, there are two critical takeaways from an environmental perspective. First, as detailed by findings from the R Street Institute, “subsidies for wind, solar, and EVs clocked in at an abatement cost of $375 per metric ton of CO₂. This is multiple times higher than any credible social cost of carbon, indicating that the IRA leaves society worse off on a climate-only cost-benefit test.” Second, a separate analysis by R Street finds that the emissions benefits from permitting reform could be greater than those projected in the optimistic IRA scenarios.