What’s in the Historical Inflation Relief Act?

What's in the Historical Inflation Relief Act?
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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

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

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

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

The Inflation Relief Act could push workers toward the climate industry

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