The Inflation Reduction Act (IRA) bill passed the Senate August 7, 2022 by a vote of 51-50 (VP Harris broke the tie) and the House on August 12 by a vote of 220-207. It was signed into law by President Biden. IRA contains about $400 billion in subsidies and incentives for clean energy, clean cars and clean buildings. (Elders Climate Action has prepared a spreadsheet with details on incentives.) It is estimated that a household could realize up to $14,000 in payments for subsidies including solar panels, heat pumps and electric cars. A new electric car would have a $7000 rebate and a used electric car, a $4000 rebate. For a short video with full explanation of how these subsidies and rebates would work for you, click here. This video is courtesy of Elders Climate Action.
Ironically, incentives in the bill have spurred development of renewable energy in red states represented by members of Congress that voted against the bill. David Wallace-Wells analyzes the relative benefits of the bill to red states versus blue states. (Reading this article will require a New York Times subscription). Despite benefits to red states, a senator from one, Louisiana, has dismissed the bill and the science attributing heat waves to climate change: ““I don’t think anybody really knows,” said Senator John Kennedy, Republican of Louisiana. He maintained that the Inflation Reduction Act had not helped the climate or the country, but instead had been “incredibly inflationary.” (Source: New York Times, July 27, 2023)
While the bill includes a number of incentives for clean energy and electric cars, there is concern among environmentalists that some of the provisions will encourage further fossil fuel development. Some provisions expedite oil leases on public lands and require that such leases have priority over other uses. “But energy analysts and many of the country’s biggest environmental groups said that any additional emissions from fossil fuel leasing would be dwarfed by the clean-energy provisions in the bill.” Congresswoman Pramila Jayapal (D – WA) commented on the bill: “Does it have a couple of bad provisions? Yes,” she said. But, Ms. Jayapal added, “I think at the end of the day we’re going to look at this and say that it’s a big step forward.” https://www.nytimes.com/2022/07/30/climate/manchin-climate-deal.html
For a listing of the reactions of environmental groups, click here. There are quotes from the Natural Resources Defense Council, Rocky Mountain Institute, Center for Biological Diversity, and some solar industry groups, all indicating support with some reservations. The Sunrise Movement supports the bill, with a caveat: “this bill isn’t the Green New Deal. It gives way too many concessions to fossil fuel executives and treats communities as sacrifices to the industry. It’s clear we haven’t yet broken the political power of the fossil fuel lobby.” (email message, August 8)
In the faith community, Interfaith Power and Light indicated its support (email message, August 8). The Unitarian-Universalists for Social Justice in Washington DC also endorsed the bill. (email message, August 8) For a statement of Quaker support of the bill, with some major criticisms, click here.
Bill McKibben of 350.org has indicated his support (email message, August 8). Climate Reality Project, founded by Al Gore, endorsed it with some reservations (email message, August 8). McKibben also noted that there was a temporary victory when Congress passed a continuing resolution without a pipeline mandate in late September. As McKibben told Amy Goodman in a recent interview: The defeat of Manchin’s pipeline deal is a grassroots victory. “Organizers did a tremendous job in the environmental justice movement of taking this and making it an issue. As you know, all environmental victories are temporary. This one may be more temporary than most. There’s already news today that Manchin and the Republicans are going to try and bring it back, attaching it in December to the Defense Authorization Act or other bill.”
The Sierra Club urged its passage, also with some reservations.
A numerical analysis, from Energy Innovation, a climate and energy think tank, indicates “that for every ton of emissions generated by the new fossil fuel provisions, the other provisions in the bill will help avoid 24 tons of emissions.” The Repeat Project estimates that the Inflation Reduction Act would deliver more than 90 percent of the emissions reductions that Build Back Better would have achieved. Their analysis indicates that the bill would reduce emissions by 41% in 2030, somewhat short of the US commitment under the Paris Agreement:
For an in-depth analysis of some of the issues with oil, gas and climate provisions of the bill by the Western Environmental Law Center, click here.
By the way, how does “inflation reduction” relate to climate change? For a good analysis of how costs of everything increase because droughts, floods, heat waves, etc., take a look at this Axios article.
The Rhodium Group also has analyzed the act along with possible executive actions that would not require Congressional approval, and estimates that the U.S. could in fact achieve a 50% reduction in emissions by 2030. That would meet the U.S. goals for the Paris Agreement. There is a caveat, however: executive actions can be challenged and delayed in court.
There are too many detailed provisions in the act to describe here; fortunately Elders Climate Action has prepared a spreadsheet with details including incentives for households.