Financial Executives Concerned About Slow IRA Implementation

The Biden administration’s massive energy and climate programs bring big benefits to the economy — but implementation needs to be accelerated, an energy finance industry executive said Wednesday.

“I don’t think it was implemented quickly enough,” George Bilicic, managing director of asset management firm Lazard, told POLITICO’s Energy Summit, although he acknowledged the difficulty in implementing important legislation that would require new regulations to guide its implementation. , such as the Inflation Reduction Act.

Energy Secretary Jennifer Granholm later acknowledged that the real-world impact of Biden’s massive spending initiatives has been slower than some would like.

“We may have made some breakthroughs, but we haven’t had a large number of ribbon cuttings yet,” said Granholm, who, like other members of Biden’s cabinet, has crisscrossed the country to promote projects funded by Biden’s programs. “Because it takes a while to build the real factories.”

The administration is facing pressure to distribute hundreds of billions of dollars before the November elections – or else risk the return of former President Donald Trump, who has promised to roll back many of the programs and incentives. According to POLITICO analysis, spending in April totaled less than 17 percent of the $1.1 billion that Biden’s climate, infrastructure, technology and pandemic relief laws provided for direct investments in health-related needs. climate and energy.

The Treasury Department has released a series of guidelines since the passage of the climate law that lay out the rules for implementing another big part of that agenda — the Inflation Reduction Act’s clean energy tax credits. But questions surrounding many of the provisions remain.

On the one hand, industry and environmental groups are closely monitoring the final rules regarding the tax credit for clean hydrogen production. Climate activists have expressed concerns that hydrogen production could worsen rather than alleviate greenhouse gas pollution if tax rules are too flexible.

Bilicic cited hydrogen on Wednesday as an area where rules need to be clarified so that capital can start flowing. He also flagged concerns among investors that a shift in power in Washington could lead to the repeal of parts of the climate law under a future administration.

“If it looked like it was going to go away, I would freeze things,” he said. “When we were waiting for the approval of the IRA, things were frozen because people didn’t know the basis for investing and then it was approved and then people invested. And so that would be one of the problems.”

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Sam Mar, senior advisor for philanthropy Arnold Ventures, told the POLITICO audience that the fact that the IRA passed with only Democratic votes was a trap for the law, which the party passed through a legislative maneuver known as budget reconciliation. This makes “a riskier situation” for rollback efforts.

Mar also pointed out problems with licensing and construction of large infrastructure projects that pose a challenge.

“We have all this money that is ready to flow and that can’t flow because we can’t build things fast enough in this country,” Mar said, which could leave investors “with a bag of money.”

Brian Dabbs contributed to this report.