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The IRA Is Our Best Shot at Tackling Climate Change—But Only If We Don’t Squander It

9 minute read
Pahlka is the author of Recoding America: Why Government Is Failing in the Digital Age and How We Can Do Better. She is a former Deputy Chief Technology Officer of the U.S., the founder of Code for America, and a co-founder of U.S .Digital Response.  

I grew up watching Schoolhouse Rock, the animated shorts that educated American children of the seventies while we zoned out in front of the TV. The most memorable segment was the one where an adorable singing bill—literally a piece of paper rolled up and tied with red ribbon—started out bored and neglected on the steps of the U.S. Capitol. When he finally made it through the many steps of the legislative process and became a law, everyone would cheer, and then Tom and Jerry or Land of the Lost would come back on. After years of Saturday mornings with “I’m Just a Bill,” the lesson was burned into my young brain: when you want to make change, pass a law. But this lesson was incomplete, and there’s no better illustration of what was left out than the change we must make to slow global warming. The journey of the Inflation Reduction Act from bill to law was contested at every turn, and pushed relentlessly by heroic activists determined to get us a shot at avoiding a climate collapse. But the law’s passage wasn’t the shot. Getting it signed into law just gave us the shot. Implementing it properly is how we take it.

What happens after a bill becomes law doesn’t get much attention, except when it does. Almost ten years ago, the website that was supposed to operationalize the Affordable Care Act launched. With millions to enroll in health plans, only eight people managed to sign up on the first day, and it was months before the site could handle the load. The ACA faced daunting political opposition, but at launch it faced an entirely different threat, one that had little to do with politics. Bad implementation nearly undid the whole legislative effort.

The IRA, which passed last August, required similarly herculean strength, especially with only 50 Democratic votes in the Senate. This landmark legislation is designed to, among other things, lower the prices of prescription drugs and modernize the IRS, but its real breakthrough is the incentives it provides to every American household to upgrade their appliances to electric versions, and spur EV and solar adoption. The IRA is inspired by research that shows that we could solve half of our climate problem, and give us a fighting chance to keep global warming under 1.5 degrees, if we use modern machines powered by increasingly clean electricity. Households don’t have to do it all at once—if each of us just made the electric choice when it’s time to get a new hot water heater, stove, furnace or car—and really, electric machines are better machines—we would buy the time we need to tackle other sectors of the economy and hopefully bring new carbon-focused inventions and technology to market. If we don’t buy that time, we are headed for a climate collapse that will further wreck the planet for future generations.

Implementation of the IRA doesn’t depend on one big website like healthcare.gov, but the risk that it fails to achieve its policy goals are similar in several ways. Both laws rely heavily on financial incentives, ones that have been carefully modeled by economists, tested by pollsters, and approved by politicians. But the success of a program starts with getting the incentives right—it doesn’t end with them. If it’s hard to take advantage of them—if the rules are confusing, if the website doesn’t work, if you don’t trust that you’ll get the rebate, or if there’s an alternative that’s just quicker and easier—the most carefully crafted incentives will sit largely unused.

This is where things get tricky for the IRA. For example, the IRA’s rebates are scaled to income—the less you make, the more you’ll get back when you buy an electric induction stove, for instance (up to 100%!). But many of these appliances will be bought and installed by contractors on behalf of their customers, and who wants to share their personal income details with someone they’ve hired? The non-profit Rewiring America has made recommendations about how to overcome these and other barriers based on practical considerations and real-world research. The federal and state agencies charged with implementing the law would do well to follow them.

But reducing friction for consumers is not something many government agencies excel at. The Public Service Loan Forgiveness program, for example, was plagued for years by complicated rules and poor communication to borrowers, resulting in denial rates as high as 99% for several years, until recent reforms. The agency responsible for implementing the ACA, the Centers for Medicare and Medicaid Systems (CMS), had very little prior experience building what’s essentially consumer software. Like the Department of Energy (DoE), Department of Commerce (DoC), and Environmental Protection Agency today, they mostly built systems for people who were paid to use them and received training (in the case of CMS, insurers, medical systems, etc), so they were rarely forced to make them intuitive. Today, CMS is building some of the most user-friendly services in all of federal government. But they learned to do that the hard way, and their learning curve almost took down President Obama’s signature policy initiative. The agencies responsible for administering the IRA need to get this right pretty much from the start.

Federalism can complicate implementation. The ACA assigned certain roles to the states. States were supposed to, for instance, decide whether they would participate in the federal marketplace (healthcare.gov) or build and run their own. But the rules states needed to know in order to make that decision and others came out in dribs and drabs, and weren’t totally finalized until the very month that the federal marketplace launched. Federal agencies like the DoE and DoC are in the same boat: they need to issue clear and timely guidance to the states under conditions of uncertainty, and already, much of that guidance is delayed.

For the consumer-focused provisions, that guidance needs to prioritize ease of use for contractors and consumers. There will always be ways a system could be more accurate in, for instance, verifying consumers’ incomes, but given what’s at stake, an “accurate enough” option needs to be okay if it means higher adoption of the program. Federal regulators are too often focused on getting every tiny little requirement exactly right in the most technically legally accurate way possible, at the expense of usability. As one implementation leader at CMS who has seen this happen too many times told her staff: “I get that it’s complicated. But it needs to make sense to a person.” If the priority is speed and scale, both federal guidance and state implementation will need to make different kinds of choices than they’re used to.

Local government will have to step up its game as well. At least cities and counties are used to dealing directly with the public, but it’s not as if anyone welcomes the chance to visit their local building department to secure a permit. If the IRA does its job of boosting demand, the number of people seeking permits for electrical upgrades and solar installations should multiply. Can these local offices meet the demand? I’ve worked with hundreds of local governments over the last twelve years and at best, I’ve seen modest increases in throughput on services like permitting after a year or more of redesign. More dramatic advances are possible, but only with pressure from the public and significant political will to overcome “statusquoism.”

Recently I asked a young climate activist what she was doing about the IRA. This young woman had been deeply committed to averting a climate disaster. “I don’t think much about it,” she said. “There’s nothing for young people to do.” But there is! Activists of all ages could start showing up at city council meetings and asking pointed questions about average permitting times. Designers, including those laid off from big tech, could use tools like journeymaps and service blueprints to find the bottlenecks in the system and suggest optimizations. These activities don’t sound radical—they don’t carry the shine of civil disobedience— but they are immensely practical and effective ways of reducing our country’s carbon emissions. Without attention to our own communities across the country, we could win the battle but lose the war.

“Manchin got a lot of what he wanted,” the climate activist also said. This speaks, I fear, to another reason there is insufficient effort behind following up on IRA implementation. The law as passed is imperfect. All laws are. But the likelihood of another comprehensive legislative package on climate in the next several years is extremely low. The IRA is our shot, and we’d better take it.

Kids today don’t watch I’m Just a Bill on a TV the way I did, but they may watch it on a screen. They’re growing up in a world where you can summon a car or a meal with a few taps on their phone, and their parents are less and less tolerant of burdensome paperwork processes that “don’t make sense to a person.” If we want them to electrify and solarize, we’re going to have to make it easy. And many more of us are going to have to take responsibility for that happening, and sweat the boring, bureaucratic details. In learning to celebrate legislation, we have ignored implementation. Today, one of the greatest threats to our kids and the world they will inherit is the belief that having passed a law, the work is done.

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