The Senate just passed a sweeping $369 billion deal on Sunday that will help fund multiple energy projects in order to decarbonize the economy. Despite a period of rising pessimism, the US Congress and President Joe Biden have pulled off the most important climate change pact in American history. The passing of this vote represents a major breakthrough for US climate policy. With $369 billion, the legislation can now use this to turbocharge decarbonisation efforts.
The Chairman of the Senate Finance Committee and the chief author of the bill’s clean energy tax credits, Ron Wyden, believes, ”This package is not nibbling at the edges here in terms of clean energy and really transforming the American economy.”
What is the Inflation Reduction Act?
The Inflation Reduction Act, as it’s called, promises the largest investment in climate action in US history. This could lead to significant emission reductions in the upcoming decades. According to analysts, the IRA will help reduce 41% of US emissions by the year 2030. The United States is the largest emitter historically and the second-largest emitter currently, hence the IRA will definitely improve US global image. The IRA is going a long way in restoring the US’s credibility to emerge as a global leader on climate. This will also help strengthen US legitimacy in climate negotiations internationally when nations convene in November for COP 27.
According to US climate envoy John Kerry, “The United States’ passage of the biggest climate legislation in its history could inspire other countries to take action to avoid falling behind.”
The passing of this bill would be a victory for everyone suffering from the aftermaths of climate change and in danger of losing their homes as conditions worsen. The IRA could help save thousands of lives. According to an analysis by Energy Innovation, this bill could help prevent up to 3,894 deaths per year by 2030 by cutting down air pollution. The bill will also reduce particulate matter emissions that cause respiratory and heart problems when inhaled by humans.
What does the Inflation Reduction Act include?
Congress has directed this fund to rapidly scale up renewable energy production and drive down greenhouse gas emissions. This historic legislation will invest in a variety of efforts such as low-carbon technologies, environmental justice initiatives for disadvantaged communities in the US, and tax credits to promote electric vehicle sales to reduce greenhouse emissions.
The IRA will pour $27 billion into creating a green bank that will help to finance clean energy technology, as well as emission-cutting infrastructure like rooftop solar panels. Billions of dollars will be invested in climate-smart agricultural practices across the US and manufacturing facilities for clean vehicles. Funding will also be provided for consumer programs, such as the use of heat pumps which help regulate home temperatures and improve home energy efficiency overall.
The IRA will direct $1.5 billion in an effort to reduce methane leaks from natural gas production in order to support the US commitment to the Global Methane Pledge. Congress will also be handing out $5 billion in grants to support forest conservation, fire-resilient forests, and urban free planning. The bill will also help fund drought resilience in western states.
What does the Inflation Reduction Act not include?
While the bill focuses heavily on making buildings more energy efficient, it neglects to ensure buildings would remain resilient to withstand climate change extremes. Last year itself, climate events inflicted $152 billion in damages across the country. Flash flooding in California, Montana, and Kentucky and wildfires in Alaska, New Mexico, and California have inflicted damage to property.
Another measure that concerns people in this bill is the IRA’s efforts to include a clean hydrogen tax credit, which will help drive down the cost of hydrogen production. However, scientists have recently found that hydrogen can contribute to global heating as it is prone to leaking. To include hydrogen in combating climate change, will require close monitoring for any leaks which is not possible with the current technology.
This legislation also provides provisions that tether offshore wind leasing to oil and gas extraction which is concerning according to experts at the Center for Biological Diversity’s Brett Hartl, as, “Handcuffing renewable energy development to new oil and gas extraction will fan the flames of climate disasters torching our country.”
Although this $369 billion deal could help reduce carbon pollution and lower electric bills, climate activists believe more should be done. But we can all agree, that as America endures the hottest summer on record for the second consecutive year, the passing of this bill has been a long overdue start towards the efforts to fight climate change.