It's been one year since President Biden passed his administration's Inflation Reduction Act. The bill's original objectives were to create 9 million U.S. jobs and reduce carbon emissions by over 40 percent by 2030. Experts continue to ponder whether the act's goals are feasible and how much it will benefit the U.S. economy.

The Inflation Reduction Act's 10-year plan is "about expectations that, yes, you are going to get tax credit subsidies if you go in the right direction," Columbia Business School Climate Economist Gernot Wagner tells Yahoo Finance, later stating: "You're only at the beginning and it's at the beginning of the global clean energy race.

Wagner comments on trends in wide-scale adoption of EVs and other clean energy technology to match interests in sustainable lifestyles.

This post was written by Luke Carberry Mogan.

Video Transcript

[AUDIO OUT] AKIKO FUJITA: President Biden out in Wisconsin today, touting his economic vision on the eve of the Inflation Reduction Act's one year anniversary.

JOE BIDEN: Since I took office the private sector has announced more than $3 billion in investments, not million, billion, in investments for wind energy manufacturing in America.

And by the way, it's cheaper, cheaper, cheaper than fossil fuels, cheaper than fossil fuels.

Folks, as I've said for a long time, for a long time, when I think climate, I think jobs.

Not a joke.

When I think climate, I think jobs.

AKIKO FUJITA: That bill marked the largest climate investment in US history and promised to create jobs and lower healthcare costs.

Joining us now is Professor Gernot Wagner, a climate economist at the Columbia Business School.

Good to talk to you today.

I guess, there's two ways to really measure the impact.

One is the economic one.

The other is, what does it actually mean for climate and trying to curb those emissions?

So let's start with the economic picture.

The president out there touting that.

How would you grade year one of the IRA?

GERNOT WAGNER: Well, we are at the very beginning, right?

So too early to assign a grade in many ways.

But we just heard it, right?

$3 billion, which sounds like a lot, billion with a B.

Frankly, we are talking about hundreds of billions of dollars total over 10 years in clean energy investment.

And yes, the emphasis is on clean, right?

So all of this is good news.

SEANA SMITH: When will we start seeing more of an impact then?

I know you're saying that this is obviously a 10-year plan.

But is this something when we talk about more job creation, more investment, more of an impact on climate here in the US, is that a year or two out?

GERNOT WAGNER: Yes is the short answer, right?

So yes, it's a 10-year law.

And in many ways, this is sort of Econ 101 if you will.

But it's about expectations, right?

It's about expectations that, yes, you are going to get tax credits subsidies if you go in the right direction.

There's a 10-year runway.

And frankly, a lot of the hope here is that we are subsidizing the learning by doing early on, climbing the learning curve, sliding down the cost curve.

And then this is a runaway train.

And yes, it runs on clean electricity.

AKIKO FUJITA: Part of the president's pitch has not necessarily been to those who have been really on board with aggressive investments into climate, whether that's climate tech, whether that's in the EV space.

It is about getting those who may have been a little more skeptical on board through incentives.

How has he fared on that front?

When you think about, at least, on a political scale, getting conservative states, especially on board with these incentives, what have we seen on that front?

GERNOT WAGNER: I think that's exactly the right way to look at this.

And there are two, frankly.

I sound like a cheerleader now, but, yes, great news, because, basically, most of the investments are in Republican states, right?

That's where the land is.

That's where the solar and the wind is being built.

That's where the manufacturing is being built.

So, yes, right, we might hear from frankly Republicans in DC.

Basically, all of them voted against it.

They are perfectly happy showing up to the opening ceremony of the plant in their district.

So politically, this is a very smart play.

And again, it's pointing in the right direction.

We are only at the beginning.

But it's the beginning of this global clean energy race.

AKIKO FUJITA: So how is that likely to shift the footprint that we're seeing?

I mean, you were in year one, you could argue it hasn't really been even a year when you consider when the incentive started to take shape.

But we were talking about EVs earlier, how manufacturing and the priorities to onshore have shifted, when you look at other spaces, too.

What's been most noticeable for you?

And what does that ultimately mean 10 years down the line when you look at that manufacturing footprint?

GERNOT WAGNER: I mean, the key bit here.

So when we talk climate we often talk tipping points, sort of the negative tipping points once.

Once this climate train runs away, once the glaciers melt, there is no turning back.

In this case, it's tipping points, it's positive tipping points, right, in the sense that if your neighbor gets the solar panels and the heat pump and the induction stove, you realize pretty quickly that that is fundamentally a better technology.

It's not about saving the planet so much as, yeah, induction stoves are just better.

They are newer.

They are they're more modern.

They're a step in the right direction on all those dimensions.

And we see these positive socioeconomic, to use a nerdy term, tipping points.

Once you go in that direction, there is no turning back.

And at the beginning of this, but we see some of this already, right?

EVs are better cars than the internal combustion engine.

So it takes a bit.

It takes a bit more.

It takes subsidies to push us, nudge us in this right direction.

But once we are going, we are going, right?

You're not going to go back.

AKIKO FUJITA: Isn't costs still such a big issue?

I mean, you talk about that the benefits of this technology, and sure, those who have made the shift to induction stoves and EVs, you know, certainly helping bring down emissions in the long term.

But cost is still a big hurdle.

Has the IRA done enough to make this more affordable?

GERNOT WAGNER: No, it hasn't, not yet, frankly, because most of those clean energy tax credits and rebates and so on are not even on the books yet.

I mean, we talk about it.

And yes, they are in the law.

But, for example, the rules have not been written yet for you to get the tax credit, the rebate, when you purchase your induction stove, your heat pump, upgrade your electric system, weatherproof, weatherize, insulate your home.

And the exciting thing, frankly, is that a lot of those investments are already happening, even though the money, frankly, isn't even flowing yet from this law.

Again, this is sort of this tipping point, the expectations, that, wait, that's the way to do it.

That's the thing to do if you want to insulate yourself against the foul smell from the Canadian wildfires, yes, fossil fueled wildfires, you better insulate your home, you get better windows, and so on.

And those investments aren't even subsidized yet through the Inflation Reduction Act.

It's coming.

The law has been passed.

But, yes, of course, it takes those subsidies in addition to the excitement, the expectations.

AKIKO FUJITA: Gernot Wagner, professor at the Columbia Business School, it's good to talk to you today.

Appreciate the time.