Why the Inflation Reduction is good for your wallet and the planet
The United States just made the largest investment in combatting climate change in history with the passage of the Inflation Reduction Act. This bill will help reduce America’s carbon emissions and accelerate the country’s transition toward a greener future, all while saving consumers money. There’s a lot to digest in this bill, so we’re going to break it down for you!
Investment into Climate Change
Nearly $400 billion over 10 years of government spending will go towards fighting climate change and reducing the nation’s carbon emissions. One major provision in the bill is dedicated to providing federal tax incentives for electric vehicles. This tax incentive will offer consumers up to $7,500 in savings for new electric vehicles mostly manufactured in America and up to $4,000 in savings for used electric vehicles. There will also be new income qualifications proposed in the bill that will ensure that the credits go to those who need them most, not wealthy EV buyers.
Beyond EVs, this bill would also invest in the development of clean energy initiatives such as clean hydrogen, more advanced nuclear power plants, and carbon capture technologies. Consumers will also receive additional tax credits and rebates if they improve their home’s energy efficiency, such as heat pumps and electric stoves. These investments could save American’s from $1,500 to $2,000 on their energy bills.
This bill will also pour $60 billion into disadvantaged communities dealing with climate change. Additionally, $27 billion will be put towards building a green bank, which will focus on developing green energy projects in low-income communities. This will be great for not only fighting climate change, but also working to minimize the harms of environmental racism.
Investment into Fossil Fuels
However, not everything in this bill will benefit the environment. In an effort to compromise with the fossil fuel-friendly Senator Joe Manchin, the bill will simultaneously provide leases for oil and gas pipeline projects in the Gulf of Mexico and in Alaska. However, the bill will also fine oil and gas companies for their methane emissions, which will encourage the reduction of harmful greenhouse gases.
What’s Not in the Bill
It is important to remember that this bill is essentially the remnants of the proposed “Build Back Better” platform, which failed to pass in the Senate last year. Last year’s reconciliation bill lacked the vast majority of proposed climate and energy legislation that would push the nation closer to the 2030 goals set by the Biden administration. A lot is still missing from the Inflation Reduction Act, such as child tax credits, paid family leave, and Medicare expansion. Beyond the cuts in the social safety net, multiple climate policies that were in that bill have also been left out in the IRA bill. Electric bike tax credits, the Civilian Climate Corps, and lead remediation have all been cut entirely from the bill. Additionally, the overall climate spending has decreased from nearly $600 billion to less than $400 billion. These compromises are disappointing, but they could appear in future legislation.
The Future of Climate Policy
The IRA bill may be rather modest in scope, falling just short of Biden’s goals of 50% reduction of carbon emissions by 2030. However, this is just the beginning of the United States’ efforts to combat climate change and demonstrates how effective climate legislation can be. This bill could reduce our carbon emissions by 40% below 2005 levels by the end of 2030. As the 2022 midterm elections arrive this November, it is important to elect Representatives and Senators who support policies that combat climate-change. 2030 may seem far, but we have a lot of work to do to ensure that we not only meet our goals, but surpass them, paving the way for a brighter future for the next generation. Both local and national elections will be vital, to maintaining and accelerating the progress we have made. We can do more, and we must do more.