Washington, D.C.--At a Senate Finance Committee hearing on the green energy tax incentives included in the Inflation Reduction Act (IRA), Ranking Member Mike Crapo (R-Idaho) noted that while members have long expressed bipartisan interest in reforming America’s energy tax laws, congressional Democrats pursued the partisan IRA, which has taken America down a dangerous, fiscally irresponsible path, providing ever-ballooning subsidies, antagonizing allies and rewarding the very industries that are reliant on China.
On the skyrocketing costs of the IRA’s green energy provisions:
“The IRA’s costs keep rocketing upwards by hundreds of billions of dollars. For example, Penn Wharton’s Budget Model originally estimated the climate and energy provisions in the IRA would cost nearly $385 billion.
“After new implementation details emerged, Penn Wharton revised the model, estimating the climate and energy provisions would actually cost over $1 trillion.
“Spending on clean cars and trucks alone is now estimated to cost $393 billion over ten years--more than the original estimate for the entirety of the IRA’s energy and climate-related provisions.
On policies that reward China:
“While many U.S. companies and American consumers are at a disadvantage under the new green energy regime, there is one clear winner: China, where economies of scale, supply chains and first-mover advantages ensure that for the foreseeable future, most of America’s green energy growth will be originating from the one place the IRA claims it should not.
“When it comes to producing batteries for electric vehicles, China controls more than 60 percent of the battery cathode and separator production, more than 70 percent of battery electrolyte and battery cell production and lithium and cobalt refining, and more than 80 percent of battery anode production.
“The New York Times recently reported, ‘Despite billions in Western investment, China is so far ahead--mining rare minerals, training engineers and building huge factories--that the rest of the world may take decades to catch up. Even by 2030, China will make more than twice as many batteries as every other country combined.’
“China’s production dominance is also on display in the solar industry, which as the Washington Post recently noted ‘dominates the market for the wafers and polysilicon used in them, controlling some 95 percent of the supply.’
“Instead of increasing U.S. dependence on China and further encouraging manufacturing overseas, my Republican colleagues and I support a common sense ‘all of the above’ approach to America’s energy needs.”