President-elect Donald Trump’s return to power gives him a chance to fulfill his vow to gut the unspent funding in Democrats’ climate law.
The big mystery is how much money remains on the table.
Federal agencies and departments have announced tentative awards for roughly two-thirds of the $145.4 billion appropriated to climate efforts by the Inflation Reduction Act, according to information tracked by the White House. But the Biden administration has provided no accounting of how much of that money it has formally committed, or obligated — a number that could be crucial for the coming GOP debate over how much of the law to repeal.
The Environmental Protection Agency previously told POLITICO’s E&E News that it has obligated $33.5 billion, or 80 percent of its $42.1 billion in IRA appropriations, as of Oct. 22. The Interior Department’s Bureau of Reclamation obligated $1.1 billion from its $4.6 billion share of the climate law money, according to data that it posts online.
But few other agencies have offered a comprehensive breakdown of the IRA dollars that might be secure from Trump’s promised efforts to claw them back.
On the same day Trump won a second term, the two federal agencies that have received the most funding under the IRA declined to share new information on their obligations of taxpayer dollars. Instead, they referred questions to the White House, which also did not provide figures relating to obligations under the law.
No government body offers data that provides an easy way to break out all the obligated IRA dollars. Instead, the White House provides figures for how much of the spending the administration has announced — a broader category that includes money a future regime could easily pause or modify.
The White House said this week that $98 billion in award announcements has gone out to recipients.
In the months leading up to last week’s election, POLITICO contacted every agency that received appropriations from the climate law. Only some could provide partial or full breakdowns of their spending and obligations.
But administration officials say they’re working hard to announce and obligate funding before President Joe Biden’s term expires.
“For the grant and other dollars in various parts of our investment agenda, something like $9 out of every $10 has either been put out into the economy or competed to go and make an impact,” White House national climate adviser Ali Zaidi told reporters late last month. “We will be running through the tape to make sure that that impact reaches as many American people as possible.”
The leader of one clean energy policy group also expressed optimism about Biden’s prospects for tying up the rest of the money by Inauguration Day.
“Momentum is on the side of continuing to move money out the door,” said Lindsey Baxter Griffith, the founder and CEO of Clean Tomorrow.
Trump, meanwhile, has vowed to rescind all of the IRA’s “unspent” funds, denouncing the law as a “scam” that would send American jobs to China. He has not specified which programs he would target.
The law is one of four major Biden-era spending packages that approved an estimated $1.6 trillion in tax credits and appropriations for infrastructure, tech and clean energy projects in the United States — with the IRA alone projected to create roughly 160,000 jobs by encouraging private-sector manufacturing investments.
Now, Republicans could use parts of the IRA’s unspent money to help pay for a fraction of the trillions of dollars in tax cuts that Trump is proposing.
Biden’s agencies and departments have announced tentative awards for roughly 67 percent of the IRA’s $145.4 billion in total climate appropriations, or 88 percent of the appropriations that the administration is tracking. That latter figure excludes some funds that became available after the previous fiscal year ended on Sept. 30, certain loan programs and internal government spending, according to the White House. Those announcements include money that the administration says it intends to spend.
Funding experts previously told POLITICO that obligated money — dollars that agencies have legally committed to paying out — is probably more secure from interference should Trump’s appointees try to halt the cash flow.
White House officials argue that as long as the IRA is the law of the land, Trump would be legally required to continue spending its funding in the way that Congress directed. However, Trump has claimed that a 1974 law requiring presidents to spend appropriated money is unconstitutional.
The question of how to Trump-proof Biden’s spending programs has become an urgent one for Democrats.
“Everybody’s worried about that,” Kate Gordon, a former senior adviser to Energy Secretary Jennifer Granholm, said last month. “I’m not worried about it once it’s contracted but I’m definitely worried about it before it’s contracted. Getting money out the door is critical.”
Gordon, who is now the CEO of California Forward, a statewide economic development nonprofit, said companies rely on the contracts to make investment decisions, making it a significant step in the award process.
“Once you start relying on these contracts, and they’re in print, it’s extremely hard to go back on them from a legal perspective,” she said.
Some of the money has a limited shelf life even without Trump’s intervention: At least $51.5 billion, or over one-third of IRA appropriations, will expire under the next administration, according to a POLITICO analysis of the White House’s guidebook for the law.
Other funding, such as the EPA’s $27 billion Greenhouse Gas Reduction Fund, had to be obligated before Sept. 30 by law.
The bulk of the EPA’s obligations under the IRA come from this fund, which is intended to finance green projects across the country. House Republicans have derided that pot of money as a “slush fund” and charged that it funnels taxpayer funding to radical environmental groups.
The agency has obligated roughly 43 percent of its other remaining appropriations for programs largely intended to reduce air pollution and increase climate resilience.
“All we can say at the moment is that EPA intends to obligate nearly all IRA investments by the end of the calendar year,” said Nate Hitchings, the agency’s strategic communications adviser for implementation, in an email.
In August, on the second anniversary of the IRA being signed into law, the EPA said it was on track to obligate nearly $38.3 billion by the end of 2024.
Others have moved more slowly. One program under the Interior Department, intended to improve access to water in disadvantaged communities, has obligated less than 0.1 percent of its $550 million in IRA appropriations, according to data from the Bureau of Reclamation. Another program meant to dedicate $12.5 million to drought relief for tribes has obligated $0.
In addition to the climate law’s funding for grants and loans, the IRA also offers an estimated $527 billion in tax incentives largely aimed at advancing clean energy technologies, according to a 2023 analysis by the Committee for a Responsible Federal Budget.
Those credits have helped launch billions in announced manufacturing investment since the IRA passed, the majority of which will land in districts represented by Republicans, according to a POLITICO analysis of data from policy research firm Atlas Public Policy. But even the future of the tax credits under a Republican administration remains unclear.
Republican lawmakers have voted to repeal the IRA in full or in part more than 50 times, although some GOP lawmakers argue in favor of keeping some of the credits.
Should any of Biden’s funding be rescinded, that could have significant impacts for projects planning to build in the U.S., including those aimed at making advanced batteries and electric vehicles.
“If Trump succeeds in completely repealing the IRA, this can and will shut down gigafactory and EV plant projects,” said Alex Kosyakov, co-founder and CEO of the solid-state battery startup Natrion, in an email.
Kosyakov pointed to companies that announced plans to build major manufacturing capacity with support from funding from the Energy Department, which would not have a viable business case if the IRA goes away.
“The risk is very real to businesses like this,” Kosyakov said.
Jean Chemnick contributed to this report.
