Potential Economic Consequences Could Arise if Trump Scrutinizes Inflation Reduction Act
Coastal Louisiana is making a splash by jumping into the offshore wind energy game in the Gulf of Mexico, faced with a controversial stonewall from the Trump Administration. Despite bipartisan support, the Trump Administration is holding back all offshore wind projects in federal waters, seemingly determined to obstruct the growth of renewable energy sources.
President Trump, who denies climate change and prizes fossil fuels, believes this move will reduce energy costs, create more jobs, and meet our increasing energy demands. However, Louisiana sees the wind energy sector as a golden opportunity for job creation and a potential balm for price volatility in their electricity market.
According to Fox Swim, a senior solar researcher for Aurora Solar, the current administration's stance is gamble. "This administration is willing to break the law and norms. It is willing to inflict economic damage on the rest of the country to fulfill its vision. The renewable energy industry must lean hard on state governments," warns Swim in a candid Zoom interview.
The Inflation Reduction Act (IRA), which passed in 2022, has empowered green energy projects across the nation. A claim by Energy Innovation suggests that if the projects were scrapped, consumers could expect higher energy bills ($32 billion by 2035) and a decline in GDP ($190 billion) by the same year. This prediction also includes the loss of hundreds of thousands of jobs.
Trump might not have the power to erase the IRA, but he can slowly but surely dismantle it by delaying or making investments in renewable energy less attractive than those in fossil fuels.
Fossil fuels are not the only concern when examining the Endangerment Finding, the legal and scientific foundation for regulating greenhouse gases that contribute to climate change. Since the U.S. Environmental Protection Agency started overseeing these emissions under the Clean Air Act in 2009, the administration may alter the law to claim that climate is not an issue or revise the IRA to determine which technologies qualify for tax credits.
When polled, 57% of businesses favored keeping the IRA, with a whopping 78% eager to leverage its benefits. In 2025, awareness of the IRA skyrocketed from 51% to a staggering 77%.
Swim reminds us that Joe Biden established the IRA and transformed the U.S. renewable energy market. Trump could just as easily reverse course, shifting the tide away from clean energy. Swim is concerned that corporations may step back from their net-zero goals, a move that could lead to lawsuits, lost customers, and tarnished brands.
Trump's sabotage of offshore wind projects isn't limited to Louisiana. New York State had planned to revamp its largest fossil fuel plant into a renewable energy powerhouse, using offshore wind, battery storage, and geothermal energy. However, Trump's executive order stifled the project, preventing the potential generation of 2.6 gigawatts of electricity and power for 2 million homes.
The Trump administration has gone on a rampage, dismissing over 30 environmental laws established by the previous administration. Caps on power plant emissions, protections for rivers and streams, and pollution rules for cars are just a few examples of regulations being erased. Trump has even referred to the IRA as the "Green New Scam" and withdrawn from the Paris Agreement, an international agreement aimed at limiting global warming.
Are we desensitized to this sort of rhetoric? The administration's strategy defies rationality and prioritizes Trump's personal agenda over the greater good. It seems that Trump is driven by vindictiveness and the need to discredit his predecessors rather than acting in the best interest of the country.
The market can be a powerful force, potentially offering more leverage than the president's agenda. Businesses are increasingly focusing on communities and employees in addition to shareholders, a strategy called the "triple bottom line." Ignoring this can harm a company's reputation, as companies like Cisco, Oracle, and IBM are demonstrating through their leadership in sustainability.
America's energy sector demonstrates the strength of market powers. Coal, once a dominant power source, has greatly diminished, accounting for just 16% of electricity generation today. Renewables, on the other hand, are on the rise, currently contributing 20%. Not a single U.S. utility company plans to construct new coal-fired power plants, including industry giants American Electric Power and Souther Company, who aim to phase out their coal plants altogether.
Swim fears that corporations may rescind their net-zero goals, a risky move that could result in lawsuits, lost customers, and damage to their brands. A list of "backtracking companies" compiled by Earth.org includes Goldman Sachs, Wells Fargo, Citi Bank, Bank of America, Morgan Stanley, JPMorgan, and American Airlines, all of whom have stepped away from industry climate alliances or withdrawn from net-zero initiatives.
Swim emphasizes that Trump's influence will be short-lived, with four years in office, followed by midterm elections. However, the administration's disregard for the economy and the environment could bring about a recession. "There are strong conservative and economic cases for renewables," Swim stressed. "Supporters must inspire legislators to affirm the benefits these policies bring to their states and communities."
If Trump dismantles the IRA, the economic repercussions could be severe. While Trump may be mired in the past, he is no stranger to the political landscape, leaving hope that political gravity will catch up with his actions and safeguard the country's future.
- Despite President Trump's intentions to reduce energy costs and create more jobs by sidelining renewable energy installers, the renewable energy sector in Louisiana, particularly offshore wind projects, is seen as a significant opportunity for job creation and a solution to price volatility in electricity markets.
- The Inflation Reduction Act (IRA) has empowered green energy projects across the nation, and if projects were scrapped, consumers could expect higher energy bills ($32 billion by 2035) and a decline in GDP ($190 billion) by the same year, along with the loss of hundreds of thousands of jobs.
- Fox Swim, a senior solar researcher, warns that the current administration's stance on renewable energy is a gamble, stating that the administration is willing to inflict economic damage to fulfill its vision and that the renewable energy industry must lean hard on state governments.
