Effective Spending of $1 Trillion Investment Critical for U.S. Climate Goals

A new commentary published in *Nature* underscores that the success of the recent $1 trillion investment by the U.S. federal government to combat climate change through the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) largely hinges on the spending strategies of state and local governments. The authors argue that local jurisdictions, responsible for implementing much of the legislation, must embrace a mindset of experimentation and evaluation.

Gordon McCord, an associate teaching professor at the UC San Diego School of Global Policy and Strategy and coauthor of the paper, remarked, "This is a once-in-a-generation opportunity to reshape our energy landscape. By committing to learning what works through experimentation and evaluation, state and local governments can lead the way in achieving the U.S.'s climate goals under the Paris Agreement."

The monumental investments aim to fast-track the nation’s transition to a low-carbon economy by establishing policies that encourage consumers and businesses to increase their use of renewable energy, promote electric vehicles, and adopt other sustainable practices. The authors point out examples such as state programs overseeing rebates for energy efficiency and the electrification of homes and appliances through the $4.3 billion Home Owner Managing Energy Savings (HOMES) Program and the $4.5 billion High-Efficiency Electric Home Rebate Program. Furthermore, they highlight the critical role of building codes and land-use policies, which fall under the authority of thousands of local governments nationwide.

To be effective, these policies should be approached as experiments that integrate evaluation from the outset. Teevrat Garg, an associate professor of economics at the School of Global Policy and Strategy and coauthor of the paper, stated, "There is a lot of learning that needs to be done in terms of understanding what works and what doesn't to change people's behavior in ways necessary for decarbonization. Decarbonization is a complex and ongoing process that partially hinges on our ability to design policies and incentives that enable broad-based and cost-effective participation from all sectors of society."

The commentary highlights the necessity for collaboration with researchers to assess program outcomes, engage in rigorous independent analysis, and harmonize data collection across jurisdictions. The authors are part of the JPAL North America working group focusing on the economics of decarbonization, which has begun offering training to state and local government agencies on designing and implementing field experiments to evaluate the cost-effectiveness of various climate policies.

San Diego County has been selected as one of the initial jurisdictions for this initiative. The researchers are partnering with the county's Office of Evaluation, Performance and Analytics (OEPA) to develop impact evaluations. McCord expressed enthusiasm, stating, "We are very excited to support OEPA in measuring the cost-effectiveness of climate actions and to help San Diego County show other jurisdictions by example how impact evaluations are key to continuously improving climate policies in the coming decades."