Event Debrief: Why the Inflation Reduction Act Passed

Key Takeaways

• The Inflation Reduction Act (IRA), the largest climate bill in American history, was passed in August 2022 on a narrow margin. As a budget reconciliation bill, the IRA differed from previous attempts to pass comprehensive climate legislation.
• Previous attempts, such as the American Clean Energy and Security Act of 2009 (AKA the “Waxman-Markey” Bill), were developed through an “insider strategy” approach that failed to build a sufficiently broad coalition of support.
• The successes and failures of climate legislation over the past twenty years hold lessons for future climate policymaking about the importance of transparency and coordination in building a broad base of support.  

Why did the Inflation Reduction Act (IRA), America’s landmark climate bill, pass when so many previous efforts have failed? This was the question posed by Leah Stokes, Anton Conk Associate Professor of Environmental Politics at UC Santa Barbara and Fellow at the Radcliffe Institute at Harvard, in her Energy Policy Seminar presentation on “Making Climate Policy” at Harvard Kennedy School.

Unlike previous eras of climate policy, Stokes explained that a “window of opportunity” for policymaking opened in 2022 that allowed a major climate legislation agenda to succeed where others had previously failed. Several key factors helped create this window: broad global acceptance of a science-based target for limiting warming to 1.5 degrees Celsius, effective communication by scientists and advocates of the stakes of climate action, and a Democratic majority in Congress. 

In contrast to the IRA, the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Bill after its two main authors, floundered in the face of Republican filibuster and was never brought to the Senate for a vote. Proposing a controversial emissions cap and trade system, the bill was pushed through a majority-Democrat House of Representatives by two Democrats before encountering stiff Republican resistance in the Senate that managed to stymie the legislation. Based on what Stokes called an “insider strategy,” Waxman and Markey’s approach failed to build a sufficiently broad Congressional coalition or public support. With the loss of the Democrat supermajority in the Senate, the bill’s sponsors failed to gain sufficient bipartisan support. Learning these lessons about the benefits of legislating with a broader coalition and seizing upon fleeting windows of opportunity led to a different approach with the IRA. 

Several things happened following the failure of the Waxman-Markey Bill that paved the way for another attempt to pass ambitious climate reform. A global push to set “targets and timetables” for climate action helped to create a sense of urgency. The IPCC’s Special Report on Global Warming of 1.5 Degrees Celsius established a global goal to cut carbon emissions by about 45% by 2030. Activists adopted this target and used it to evaluate proposed climate plans and drive media interest.  

As a result, climate policy became a subject of debate in national politics, with congressional and presidential hopefuls coming out with their own proposed climate plans in support of their platform. Jay Inslee of Washington ran for president on a climate platform, putting out over 200 pages of climate policy documents, including a focus on environmental justice, industrial policy, and more. Although unsuccessful, Inslee’s campaign became the basis for a broader push for legislation that was championed by an advocacy group called Evergreen Action, of which Stokes was a part. 

As momentum built for climate action, a second phase of advocacy led by groups like Evergreen Action began to focus on “alternative specification” for more sustainable practices in each sector of the economy. In this phase, scientists and activists helped to define targets and push policymakers to enact policy in line with them. For example, the IPCC target of a 45% cut in emissions by 2030 was formally adopted by representatives at the UN Conference of the Parties (COP), with many countries then setting national targets in line with global goals (for example, President Biden’s target of reducing emissions by 50-52% by 2030). 

In this second phase of climate action, coalition networks and consensus building also differed from the Waxman-Markey approach. A more conscientious approach was taken to building a durable, broad-based, networked coalition that could “hang together.” Different groups of advocacy organizations focused on different policy priorities, such as clean electricity advocates like Evergreen, electrification-focused groups like the Federal Electrification Policy Coalition (Rewiring America), and others like the environmental-justice-oriented Climate Action Campaign (CAC) came together with a greater focus on coordinating their advocacy efforts.

This extended to the political arena, where advocates and politicians championing climate legislation followed more of what Stokes called “inside / outside advocacy,” focusing on “hill work” to gather support as well as public organizing and communication through media and grassroots campaigns. Policy design in this phase was also more open—with Senator Markey championing an approach that emphasized public comment and transparency, influenced by lessons learned from previous eras of climate policymaking efforts.  

Importantly, sponsors of the climate bill that was to eventually become the IRA sought to build as broad of a political coalition as possible. Rather than employing an “insider strategy” to push through a new law, proponents of the climate bill, including Markey, decided to pursue their goals through the budget reconciliation process. Although initial efforts to pass the bill through the House of Representatives failed, a relentless media and grassroots campaign (what Stokes called the “outside strategy”) maintained pressure on legislators to reach a deal.  

Ultimately, Russia’s invasion of Ukraine created alignment on the need to promote America’s domestic energy industry—including alternatives to oil and gas, given the price shocks resulting from the war—and added pressure on West Virginia Senator Manchin to approve the bill. When Manchin killed the climate bill again, outside pressure (including a scathing op-ed written by Stokes in the New York Times) persuaded him to support the bill, renamed as the IRA.

Reflecting on this process, Stokes highlighted the success of the “outside strategy” compared to the “insider strategy” pursued by earlier proponents of climate policy. With scientists setting science-based targets and activist outsiders amplifying the climate agenda, combined with energy market shocks that created a window for an ambitious policy agenda, a broad-based coalition was able to form and withstand complex and lengthy negotiations.  

“The role of activists cannot be understated,” said Stokes, herself an activist, for maintaining consistent pressure on negotiators on both sides of the aisle during the debates that raged around the IRA. When seeking to pass ambitious climate legislation, the IRA and Waxman-Markey examples show that it may be important to appeal to diverse interests and build as broad a coalition as possible.