Green tax credits from last year’s climate law are likely to be far more popular than anticipated, potentially reducing carbon emissions—but also increasing costs to U.S. taxpayers, according to an emerging consensus of government and private-sector forecasters. …

But the tax-credit boom could undermine another administration talking point about the law: The claim that it will reduce long-run budget deficits. The Goldman and Brookings analyses contend that the tax credits could cost American taxpayers three times as much as the $271 billion forecast when Congress passed the law. The OMB figure points in the same direction, though its estimates about revenue from tougher tax enforcement—which are larger than congressional projections—turn the law from deficit-increasing to deficit-reducing.

“It’s extraordinarily more expensive than was forecast,” said Donald Schneider, a former House GOP aide who is now deputy head of U.S. policy at Piper Sandler. “This puts a huge target on the back of these credits.”