Household Efforts Yield 40% Emission Reductions Under IIJA, IRA



A Vanderbilt study emphasizes the significance of household actions in reducing carbon emissions, with data from 2021 showing households account for around a third of U.S. CO2 emissions. The researchers concluded that a small proportion of funds from the Infrastructure Investment and Jobs Act (IIJA) of 2021 and Inflation Reduction Act (IRA) of 2022 directed towards household actions could result in a significant reduction in emissions. The study also urges policymakers to offer significant financial incentives for household actions, invest in localized marketing, simplify processes, prioritize equitable program designs, and target higher-income households that produce more CO2 emissions.

Households’ Significance in Lowering Carbon Emissions

Despite ongoing debate, data from the United States reveals the crucial role households play in reducing carbon emissions. In 2021, approximately one third of U.S. CO2 emissions were attributed to households, with the residential sector and passenger and light-duty vehicles accounting for 19% and 22% respectively.

A recent paper by Vanderbilt researchers underscores the weight of households in U.S. legislation aimed at reducing CO2 emissions.

Congress Leverages Households for Emissions Reduction

The researchers discovered that a small proportion of funds from two substantial environmental laws – the Infrastructure Investment and Jobs Act (IIJA) of 2021 and Inflation Reduction Act (IRA) of 2022 – could result in a significant reduction in emissions.

The study, titled Incentivizing household action: Exploring the behavioral wedge in the 2021 Infrastructure Investment and Jobs Act and the 2022 Inflation Reduction Act, leverages data from the Rapid Energy Policy Evaluation and Analysis Toolkit (REPEAT), concluding that investments in voluntary household actions through IIJA and IRA could represent nearly half of all emissions reductions under these laws.

Households’ Potential in Curbing Carbon Emissions

Efforts by households to increase home energy efficiency and conservation can potentially lead to substantial carbon emissions reductions, the authors argue.

They found that only 12% and 5.7% of climate and energy funds in the IRA and IIJA, respectively, are directed toward household actions. This modest funding, however, could contribute 40% or more of all CO2 reductions in relation to the IRA and IIJA, reflecting the potential effectiveness of household actions against climate change.

Recommendations for Policymakers

The study suggests that policymakers focus on crucial actions, provide substantial financial incentives, invest in localized marketing, and streamline processes where possible. Additionally, the authors emphasize the importance of fair program design to cater to various household behaviors and socioeconomic circumstances.

Addressing Income Disparities and Structural Inequities

For instance, installing a new heat pump is simpler for a homeowner in a single-family home than for a renter in a multi-family dwelling. Further, households with high-socioeconomic status emit significantly more CO2 than their lower-income counterparts. The study recommends that program design of IIJA and IRA should prioritize targeting higher-income households and addressing structural inequities.

In conclusion, the authors argue that the growing focus on household action not only provides a critical path for emissions reduction, but also offers opportunities to enhance efficiency and alleviate the unequal energy burdens of low-income households.

Publication Details

The research appears in the March 2024 volume of Energy Policy. The co-authors include three Vanderbilt faculty members – Mariah D. Caballero of Peabody College, Michael P. Vandenbergh of the Law School, and Jonathan M. Gilligan of the College of Arts and Sciences – and Elodie O. Currier (JD’23).

Tags: climate change, Energy, featured, FutureVU, GHG, Research

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