Updated: Nov 21, 2022
By Jair Argueta
When you think of an Inflation Reduction Act you might think of lowering the prices of commodities and making it easier for people to afford necessities but, that is not what the Inflation Reduction Act is about, it is actually about helping carbon emissions t go down. I might see why it could be called the Inflation Reduction Act as it could help prices go down in the future as climate change is helping the prices of commodities and necessities go up since food is harder to grow because of the climate.
The Inflation Reduction Act has been claimed to be able to help decrease climate change, which was signed by President Biden on August 16, 2022. This has been the largest investment into climate change by the government and it is said to be able to reduce emissions by 40% by the year 2030. Biden says that he would project that the U.S would become a net-zero emission country by the year 2050. Although you won't see the price decrease immediately or in the coming weeks it will be more noticeable in the coming years.
The main purpose of this act is to make companies become more environmentally conscious as they will be incentivized to. As the funding for the incentives and the cutting emission is around $370 billion. By the end of the decade it will save around $30 billion to $80 billion, this estimation was made by Princeton University. This investment could save the U.S around $2 trillion per year from climate change as we've seen it as a more likely cause for natural disasters to occur.
Although we won't see results in a while, for prices going down at least we’ll know that the price of prescriptions will be cheaper. “It will also include more stable health care for many and it will also be available for more, seeing as it will be accessible for families of 4 earning $159,000. As of before it was $106,000 with Obamacare”, according to Vox. As they wanted people to not spend more than 8.5% of their income on medicare. Medicare was only able to address the cost of 10 drugs at a time whilst now it has been increased to 20 drugs.
In conclusion, the Inflation Reduction is not so much as to decrease inflation right now in the present but instead reducing the inflation that may be cause in the future as a way to combat climate change. In a way to reduce the amount of money that will be spent on transitioning to more eco-friendly products/power sources and to incentivize companies to transition to being more environmentally friendly.