U.S. President Joe Biden hands his pen to U.S. Senator Joe Manchin (D-WV), Senate Majority Leader Chuck Schumer (D-NY) and U.S. House Majority Whip James Clyburn (D-SC) Biden signed “On Reducing Inflation” August 16 2022 Act of 2022 became law during a ceremony in the State Dining Room of the White House in Washington, DC.
Leah Millis | Reuters
The Biden administration signed one this year historical climate and tax agreement It would direct billions of dollars to programs designed to accelerate the nation’s transition to clean energy and combat climate change.
As the U.S. grapples with climate-related disasters this year, from Hurricane Ian in Florida to the Mosquito Fire in California, the Inflation Relief Act, with $369 billion in climate provisions, was a major development to mitigate the effects of climate change across the country. .
Bill, President Joe Biden The law, signed into law in August, is the most aggressive climate investment ever passed by Congress and is expected to reduce the nation’s planet-warming carbon emissions by nearly 40% this decade and move the country toward a net-zero economy by 2050.
The provisions of the IRA have major implications for clean energy and manufacturing companies, climate startups, and consumers in the years to come. As 2022 draws to a close, here’s a look at the key pieces of legislation climate and clean energy advocates will be pursuing in 2023.
Incentives for electric cars
The deal offers a $7,500 federal tax credit to households buying new electric vehicles, as well as a $4,000 used EV credit for vehicles at least two years old. Starting January 1, people making $150,000 or less a year or co-filers are eligible for a $300,000 new car loan, and people making $75,000 or less or $150,000 for a used car loan.
Despite the increase in EV sales in recent years, the transportation sector is still the largest source of greenhouse gas emissions in the country, with the lack of convenient charging stations one of the barriers to expansion. There is the Biden administration seven to the target By 2030, electric vehicles will account for 50% of sales.
The IRA limits EV tax credits to vehicles assembled in North America and is intended to deprive the US of battery materials from China, which accounts for 70% of the global supply of battery cells for cars. An additional $1 billion in the deal will provide funding for zero-emission school buses, heavy-duty trucks and public transit buses.
US President Joe Biden gestures after driving a Hummer EV during a tour of General Motors’ ‘Factory ZERO’ electric vehicle assembly plant in Detroit, Michigan, November 17, 2021.
Jonathan Ernst | Reuters
Stephanie Searle, program director for the nonprofit International Council on Clean Transportation, said the combination of IRA tax credits and public policy will boost EV sales. The agency projects that about 50% or more of the cars, SUVs and pickups sold in 2030 will be electric. For electric trucks and buses, that number will be 40% or more, the group said.
In the coming year, Searle said the agency is overseeing the Environmental Protection Agency’s plans to propose new greenhouse gas emissions standards for heavy-duty trucks beginning in the 2027 model year.
“While the IRA is already promoting electric vehicles, the EPA can and should be bolder in setting ambitious standards for cars and trucks,” Searle said. “This is one of the Biden administration’s last chances for strong climate action this term, and they should make the most of it.”
Targeting methane gas emissions
Some pumps are running while others are idle at the Belridge oil field near McKittrick, California. Oil prices rose on expectations that the Iran nuclear deal, which has stalled Asian trade, and Moscow’s new mobilization campaign will limit global supplies.
Mario Tama | Getty Images
The package imposes a tax on energy producers that exceed a certain level of methane gas emissions. Polluters will pay a fine of $900 per metric ton of methane emissions that exceed the federal limit in 2024, rising to $1,500 per metric ton in 2026.
This is the first time the federal government has imposed a tax on the emission of any greenhouse gas. Global methane emissions are the second largest contributor to climate change after carbon dioxide and come primarily from oil and gas production, landfills, wastewater and livestock.
Methane is the main component of natural gas and is 84 times more potent than carbon dioxide, but it doesn’t stay in the atmosphere as long. Scientists claimed to limit methane necessary to avoid the worst consequences of climate change.
Located on Interstate 5, the Harris Cattle Ranch feedlot is the largest beef producer in California and can produce 150 million pounds of beef annually as viewed on May 31, 2021 near Harris Ranch, California.
George Rose | Getty Images
Robert Kleinberg, a researcher at Columbia University’s Center for Global Energy Policy, said the methane emitted by the oil and gas industry each year would be worth about $2 billion if it were instead used to generate electricity or heat homes.
“Reducing methane emissions is the fastest way to mitigate climate change. Congress recognized that in passing the IRA,” Kleinberg said. “The methane fee is a tough tax on methane emitted by the oil and gas industry in 2024 and beyond.”
In addition to the IRA’s methane provision, the Biden Interior Department this year proposed regulations to prevent methane leaks during drillingIt would earn the U.S. $39.8 million a year in royalties and prevent billions of cubic feet of gas from being wasted through venting, flaring and leaks, he said.
Increasing clean energy production
The bill provides $60 billion for clean energy production, including $30 billion in production tax credits to spur domestic production of solar panels, wind turbines, batteries and processing of critical minerals, and $10 billion in investment tax credits for EV and cleaning manufacturing businesses. holds energy technology.
There’s also $27 billion going toward a green bank called the Greenhouse Gas Reduction Fund, which will provide funding for clean energy deployments across the country, especially in high-burden communities. The bill includes a hydrogen production tax credit, which provides hydrogen producers with a credit based on the climate characteristics of their production methods.
Solar panels are installed at the solar farm at the University of California, Merced, on August 17, 2022, in Merced.
Nathan Frandino | Reuters
Emily Kent, U.S. director of zero-carbon fuels at the Clean Air Working Group, a global climate nonprofit, said the bill’s support for low-emissions hydrogen is particularly notable because it could reach hard-to-reach sectors like heavy transportation and heavy industry. to decarbonize
“U.S. climate policy took a big step this year toward zero-carbon fuels in the U.S. and globally,” Kent said. “We look forward to seeing the effects of these policies, along with the hydrogen tax credit, hydrogen hubs program, accelerating progress toward creating a global market for zero-carbon fuels.”
The clean energy generation provisions in the IRA will also have larger implications for startups in the climate space and the large venture capital firms that support them. Carmichael Roberts, head of investment at Breakthrough Energy Ventures, said climate initiatives under the IRA would give private investors more confidence in the climate space and could even lead to the creation of up to 1,000 companies.
“Everybody wants to be a part of it,” Roberts said told CNBC after the passage of the bill in August. Even before the measure passed, “there was already a huge buzz around climate,” he said.
Investing in pollution-burdened communities
The legislation invests more than $60 billion to address the disproportionate impacts of pollution and climate change on low-income communities and communities of color. The funding includes grants for zero-emission technology and vehicles, and will help clean up Superfund sites, improve air quality monitoring capacity, and fund community-led initiatives through Environmental and Climate Justice block grants.
Smoke hangs over the Oakland-San Francisco Bay Bridge in San Francisco, California, US, Wednesday, September. 9, 2020. Strong, dry winds have lashed Northern California for a third day, raising the risk of wildfires in a region battered by heat waves, freak thunderstorms and dangerously poor air quality from wildfires.
Bloomberg | Bloomberg | Getty Images
The research was published in the journal Environmental Science and Technology Letters found communities of color are systematically exposed to higher levels of air pollution than white communities due to redlining, a practice of federal housing discrimination. Black Americans are 75% more likely than white Americans to live near hazardous waste facilities and are three times more likely to die from exposure to pollutants. according to Clean Air Task Force.
After taking office, Biden signed an executive order aimed at prioritizing environmental justice and helping reduce pollution in isolated communities. The administration established the Justice40 Initiative to deliver 40% of the benefits of federal investments in climate change and clean energy to disadvantaged communities.
Most recently, in September, the EPA opened an office focused on supporting and delivering grant money from the IRA to these communities.
Reducing Ag emissions
The agreement includes $20 billion for programs to reduce emissions from the agricultural sector, which accounts for more than 10% of US emissions, according to EPA estimates.
There is a president pledged to reduce emissions By 2030, from the agricultural industry to half. The IRA directly funds agricultural conservation practices that improve soil carbon, as well as grants for projects that help protect wildfire-prone forests.
Farmer Roger Hadley harvests corn from his fields in a John Deere combine in this aerial photo taken over Woodburn, Indiana.
Bing Guan | Reuters
Leave a Comment