President Joe Biden dropped out of the 2024 election on July 21, 2024, sending shock waves through a race already upended by the attempted assassination of Donald Trump. Vice President Kamala Harris stepped in, only to be beaten by Trump. As Democrats try to recover, Biden, suffering from cancer, aims to protect what remains of his legacy. This Washington Examiner series “Dropout” looks at what happened on that day, the aftermath for Biden, and how Harris’s future is up in the air. Part 4 covers the fate of Biden’s signature legislation, the Inflation Reduction Act.

President Joe Biden‘s landmark climate law, legislation meant to shape his legacy, has been significantly undone and revamped by the President Donald Trump and Republicans, just one year after Biden’s exit from politics.

The Inflation Reduction Act, signed in August 2022, was deemed Biden’s signature climate law, providing hundreds of billions of dollars for tax credits and programs to bolster the clean energy sector. 

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“This bill would be the most significant legislation in history to tackle the climate crisis and improve our energy security right away,” Biden said in 2022. “And it’ll give us a tool to meet the climate goals that are set — that we’ve agreed to — by cutting emissions and accelerating clean energy. A huge step forward.” 

Environmental activists hailed it as the largest climate spending bill on record.

But now, seven months into the Trump administration, Republicans have been able to claw back much of that spending through the One Big Beautiful Bill Act.

The legislation, passed by Republicans and signed by Trump on July 4, advances the administration’s goal of shifting the country to focus on fossil fuels rather than clean energy.

Specifically, it repeals more than $500 billion worth of IRA clean energy tax credits over the next decade. It also cuts billions in spending from clean energy programs under the law. Those revenues will partially offset the tax cuts and new spending on immigration enforcement and defense included in the GOP megabill.

Most notably, the bill eliminates credits of up to $7,500 for the purchase of electric vehicles. The IRA incentives for EVs were meant to usher in a new era of clean transportation and, when combined with new regulations on vehicle emissions, shift the U.S. away from gas-powered cars. Trump derided those rules throughout the presidential campaign, and his administration is working to undo them.

The bill also phases out tax credits for investment in and production of clean energy that were seen as critical to boosting the wind and solar power industries. It retains the credits for nuclear and geothermal power, though, in line with the administration’s support for those sources of baseload power — that is, energy that does not vary with the wind or sunshine.

Overall, the OBBBA is a major step away from the Biden climate agenda and toward Trump’s goal of ending what he has termed the “green new scam.” The legislation also includes provisions to increase domestic oil and gas development by mandating lease sales on federal lands and waters. 

Still, it fell short of being the wholesale repeal of the law, as sought by some conservative Republicans.

Jack Andreasen Cavanaugh, a Global Fellow at the Carbon Management Research Initiative for Columbia University, said the OBBBA is a moderate approach, rather than a full repeal of all tax credits.

“I don’t view it as a total, wholesale destruction of President Biden’s climate policy instituted through the IRA, but it certainly has made deployment of energy more difficult in a time where we need energy as fast as we can build it,” Cavanaugh said.

“Realistically, what this does is it just creates massive uncertainty in the market, which makes it really difficult to make capital investments and projects,” he added.

Some tax credits are still available for technologies such as advanced nuclear, geothermal energy, energy storage, clean hydrogen, and carbon capture, said Brad Townsend, Vice President for Policy and Outreach at the Center for Climate and Energy Solutions.

The law also expanded incentives for clean fuel production, a boon to the agricultural industry.

It’s also worth noting that, while the IRA was touted by Biden and climate activists as a climate measure, it was not solely and straightforwardly focused on building wind turbines, solar panels, and other renewable energy sources. Reflecting the influence of centrist Democrat Sen. Joe Manchin (WV), the bill also included numerous provisions that were instead meant to ensure that energy is produced in the U.S., rather than China, and even included some pro-drilling aspects.

“It still had all those other things of an all-of-the-above strategy,” said Frank Maisano, a senior principal at energy law firm Bracewell. “The most amazing thing about the derailing we’re seeing by the Trump administration because of the word ‘climate’ is that they’ve derailed much of the stuff that it’s going to help us meet our power demand.” 

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Maisano said undoing the IRA’s clean energy incentives was a selling point for Trump and Republicans because “they just don’t care about energy transition, and they just don’t care about climate change.” 

He said that the changes could undermine energy production in the near term, as they will prevent some wind turbines and solar panels from coming online, while any boost to nuclear power wouldn’t result in new plants being built for years.

Brandon Dalling, a partner at King & Spalding, said that energy companies capable of adapting to the new tax credits will thrive.

“The adaptable are the ones who will come out ahead,” Dalling said. He said companies are asking questions like, “how do we adapt to the new environment? How do we adapt to political volatility? How do we adapt to the financial volatility?” 

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However, the reality is that the rest of the world is still moving full speed ahead, if not accelerating, investment in renewable energy, Townsend said.

“The notion that the U.S. could unilaterally dismantle or destroy these markets and the broader march towards decarbonization is a fallacy. It’s simply not the case that the US can unilaterally direct the world away from reducing emissions and addressing the climate crisis,” he said.

He noted that the electric vehicle market is an example of the OBBBA completely ceding the sector to China, which is leading the world in producing cheap and cutting-edge cars.

“Ultimately, what we’ve done is not necessarily slowed the, you know, the global economic transition. We have just sidelined ourselves from being able to compete for any of the spoils,” he said.

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Townsend said, “It’s too soon to say, to say with any certainty what the long-term legacy of the IRA will be.” He indicated that the key lesson is that “highly partisan approaches” to areas requiring durable policy are generally not effective.