IRA Climate Impact a Hot Topic

As we mark the one-year anniversary of the Inflation Reduction Act, it appears to be living up to its billing as the most significant piece of climate legislation to become law in the United States. 

The law is driving investments that are already leading to a spike in deployment of clean energy and development of new clean energy technologies. And, if well implemented, the IRA’s clean energy policies could change the face of our energy sector and set the country on a path toward a more decarbonized economy.

That said, the implementation burden on the Department of Treasury and other agencies is unprecedented. While this process will be iterative and lengthy, there will be significant pressure for the Biden administration to move as quickly as possible, requiring equally expedited engagement by taxpayers with a vested interest in the regulatory outcomes. 

The administration knows that industry will have difficulty making investment decisions if the rules are not completed in a timely manner, reducing the effectiveness of the credits in achieving their intended objectives. Treasury has sought public input from groups affected by the clean energy provisions, with the first phase of implementation expected to wrap up in the coming months. 

The FGS Global U.S. Energy & Sustainability and Tax & Financial Services teams are available to help understand the landscape and opportunities at ESTeamDC@fgsglobal.com.

This week we are sharing a fresh view from Capitol Hill from Tricia Engle, who recently joined FGS Global after 26 years working on the Senate floor for the Democratic caucus.

Senate floor procedure can seem like a black box. Understanding the floor process can help formulate a legislative strategy and identify leverage points for a client. Below are a few basics ideas to help understand how the Senate works.

1. Unanimous Consent (UC). Anything can be done in the Senate if all 100 Senators agree. The Senate relies on simple and complex agreements to operate on a daily basis.
   

2. Hotline. An internal caucus communication used to determine if there are any objections to a unanimous consent request.
   

3. Live UC. A Senator makes a unanimous consent request live on the floor.
   

4. Filibuster. Speaking at length, objecting to a request or any dilatory action designed to delay action.
   

5. Wrap Up. Bills passed and nominations confirmed by unanimous consent.
   

6. Cloture. A process to limit debate and force a vote. It takes several days and requires 60 affirmative votes for legislation and a majority vote on most nominations.
   

7. Amendments. Senators may file an unlimited number of amendments to a pending bill, but an amendment must be considered on the floor to be agreed to. This amendment process is complex.
   

8. Managers’ amendment/package. A group of amendments that are acceptable to the committee of jurisdiction. Requires consent to be considered and agreed to.
   

9. Schedule. Usually set at the end of the prior legislative day and can change and votes scheduled at any time.

The conversation around AI is fast-paced, multi-dimensional, nascent and still largely reactive. This is what our Research and Insights team found with a 6-month long look at the online U.S.-based conversation on Twitter and Reddit, as well as editorial sources.

Other insights included:

• The pace of proliferation of Gen AI tools has caught many off guard.

• Journalists and commentators are struggling to keep up with the impacts and implications.

• Media coverage is often reactive to events with AI typically described as a “race” between different large entities.

• Fear-focused coverage often clouds more optimistic takes.

• Apocalyptic visions of “machines taking over” also crowd out more immediate implications around issues such as privacy and bias.

• 205,000 articles have been shared 1.3 million times across these platforms, with an aggregate readership of 2 trillion.

• Conversation themes include:

  • Excitement for the future of AI; 

  • Threats to jobs;

  • Policies, regulation & government; 

  • Concerns for the future of AI; 

  • Advancement of generative AI tools; and 

  • U.S. perspectives on AI globally.

The White House and Congress have both dedicated a fair amount of attention to AI in the last several months, but no consensus has emerged yet on how Washington should broadly regulate the technology. Congress is largely still in an information-gathering mode, often tapping experts from "Big Tech" to offer counsel.

In the short term, AI-policy will be mostly driven by the White House and federal agencies looking at AI under their jurisdictions, as Congress is unlikely to pass comprehensive AI legislation before the next election.

More than a dozen federal agencies are now working on addressing the implications of AI within each of their jurisdictions – with significant activity in health, defense/national security and financial services sectors.