| By Ari Natter and Jennifer A. Dlouhy President-Elect Donald Trump will be empowered by Republican gains on Capitol Hill to pull back portions of the Democrats' signature climate law he calls "the green new scam." Just don't expect a wholesale repeal of the Inflation Reduction Act. "We are not looking at immediate, drastic, apocalyptic changes overnight," said James Lucier, managing director at research group Capital Alpha Partners. "But there is always a strong likelihood that some parts of the IRA are going to be capped or phased out."  A First Solar manufacturing facility under construction in Trinity, Alabama, on Oct. 4, 2023. Photographer: Liam Kennedy/Bloomberg The law, with hundreds of billions of dollars in subsidies for enterprises that will help the US decarbonize, is driving a wave of investment in red districts. Some GOP lawmakers, loath to give that up, have already said they don't support making significant changes to the law. And although no Republicans voted for the measure two years ago, some of its incentives, such as credits for producing hydrogen and capturing carbon dioxide, are very popular with oil companies and other core GOP constituencies. But Trump's presidency is almost certain to usher in new restrictions, expiration dates and caps that narrow its scope. That could help offset the costs of extending Trump's 2017 tax cuts before they expire next year, a top priority of the president-elect and other Republicans. The IRA "is the doomsday machine for the budget," Scott Bessent, a top Trump economic adviser and potential Treasury Secretary pick, who serves as chief executive at the hedge fund Key Square Group, told CNBC. "I think the priority is going to be turning off the IRA." ClearView Energy Partners said in a note Thursday that top targets for elimination in the law include credits for used and commercial EVs; a fee on methane emissions levied on oil and gas producers; and billions of dollars in authority given to an Energy Department loan program. A clawback of unused funds for federal climate programs is possible, as is "an attempt to claw back obligated-but-undistributed balances," the Washington-based consulting firm said. The success of such efforts is likely contingent on the size of the expected Republican majority in the House. Changes could happen administratively, too. Even without action from Congress, IRA opponents say, the Treasury Department could tighten rules around who can claim tax credits. For instance, strict rules on the sourcing of materials from China and other foreign adversaries, put in place for EV tax credits, could be applied more broadly to other incentives, such as the advanced manufacturing credit for solar panels and other clean-energy technologies. A policy that allows leased electric vehicles to evade those requirements, derided by critics as the "leasing loophole," is almost certainly done for, analysts say. Read the full article on Bloomberg.com. | 
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