3. A divided government is more likely, leaving IRA mostly intact

Our Research analysts’ base case for November is that Democrats win the House and Republicans win the Senate, resulting in a divided government regardless of which party takes the presidency. If President Biden is re-elected, the IRA and other recently passed green laws would be protected from legislative or administrative changes. However, if Donald Trump is elected, there could be administrative changes that would not rely on a divided Congress.

Rules and regulations for implementing IRA provisions on carbon capture, nuclear energy and hydrogen could be the least affected under a divided government scenario with a Republican president, as those may be seen as popular with Republican constituencies.

However, implementation of provisions related to electric vehicles and bonus incentives could be the most likely to be limited through administrative changes.

In the coming months, the Biden administration may work to speed up implementation of all IRA provisions.

While the Republicans could reverse the final rules, the process for doing so is cumbersome and time consuming. Overall, our Research analysts believe a divided government would leave much of the IRA and other recent green legislation intact, limiting impact to the margins.