Lawyers and VCs have sized up the Inflation Reduction Act by now, and American energy systems will likely never stagnate again. For thinking about investment over the decades that decarbonization will take, take a trip back to another crossroads in the nation's energy history.
There's too much operating need for carbon-heavy energy, and climate change is too far along, for society to do all its sustainability work through a switch to renewable fuels. Removing carbon from the atmosphere becomes necessary - and financing the removal involves a range of risks.
Many have boiled down the seminal Inflation Reduction Act, and many are burrowing into it. To set boundaries and context beyond the timing of tax credits, consider an analogy to how another blockbuster set of policies altered one of the world's more emissions-intensive cities.
One state has tried requiring power at peak demand periods to come from clean sources. This mandate can improve air quality in low-income communities. Critics question its effect on emissions, though, and its optimal design as clean-energy storage for utilities evolves.
Not every analysis concludes that the scale-up costs of hydrogen make it more bankable than wind, solar and hydropower. But since hydrogen production requires less land, and since it can reach hard-to-decarbonize sectors, many investors are giving it a long look. Now you can too.