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IRA Update: Buildings Projected To Deliver Largest IRA-Related Emissions Reductions

Buildings, accounting for 40% of annual global carbon emissions, offer an enormous opportunity for economy decarbonization. The U.S. Environmental Protection Agency released a new report finding that buildings will likely deliver larger greenhouse gas emissions reductions through 2035 than any other end-use sector. This is especially likely with the programs created via the Inflation Reduction Act (IRA).

The report analyzes green house gas emissions through 2035 over a 2005 baseline while incorporating numerous modeling scenarios, both with the effects of the IRA’s programs and without them. The analysis is to help those understand the impact IRA programs have on green house gas emissions from end uses, as well as the power sector.

According to the U.S. Green Building Council (USGBC), buildings sector emissions are projected to drop by 52–70% by 2035 with the boost from IRA taken into account, or a median projected reduction of 66%. By comparison, industrial emissions are projected to drop by 23–56% under the IRA with a median reduction of 36%, and transportation emissions by 15–35%, or a median of 27%. (Without the IRA, buildings emissions are expected to drop by a median of 45% by 2035, compared with 27% for industrial and 23% for transportation.)

It’s not just a percentage game, either. In actual quantities, building emissions are forecast to drop by more than the transportation or industrial sectors combined, with a projected top range of 1,575 million metric tons of carbon dioxide reduction from buildings versus 897 million metric tons from industry and 663 million metric tons for transportation. Those are significant numbers, given that the U.S. currently emits about 6,000 million metric tons of greenhouse gases per year.

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