By Susan Stephenson, Executive Director
The Inflation Reduction Act (IRA), the most sweeping clean energy and climate legislation in history, was signed into law by President Biden on August 16th, 2022!
The new law will put the nation on the path to cut greenhouse gas emissions up to 44% by 2030, while saving thousands of lives, creating millions of good paying clean energy jobs, investing in environmental justice, and reducing energy bills for working families across the country.
With approximately $370 billion in energy and climate investments, this is the single biggest U.S. investment aimed at tackling climate change. It includes:
- Clean energy tax credits for wind and solar, electric vehicles, efficiency upgrades, and heat pumps
- More than $60 billion for environmental justice priorities
- Up to $60 billion for domestic clean energy manufacturing
- $27 billion to speed the development of emissions reductions technologies, especially in disadvantaged communities
- A fee on methane pollution from oil and gas facilities and infrastructure, starting at $900 per ton
This is a historic victory that is the result of years of work by climate activists including Interfaith Power & Light supporters who have advocated, organized, protested, prayed, preached, met with policymakers, signed petitions, written letters, and more for months and years to get Congress to act on climate. Thank you: this victory is yours!
Unfortunately, however, during negotiations, provisions were added that could facilitate fossil fuel expansion, drilling, nuclear power, hydrogen power, and other false solutions that disproportionately harm frontline and historically disenfranchised communities. It is unacceptable for disadvantaged and vulnerable communities to bear the brunt of pollution. We have a moral obligation to advocate for climate justice and IPL will redouble our efforts to secure benefits, not burdens, for frontline communities in this energy transition.
Interfaith Power & Light is also concerned about a proposed deal to include drastic permitting changes in must-pass legislation Congress will take up this fall. We will work to address those troubling provisions, oppose any weakening of our environmental review process, and advocate for bold executive action from the Biden Administration so that the U.S. can meet our climate goals.
Analysis of the bill by independent research groups Rhodium, Energy Innovation and REPEAT, have found that on balance the investments in clean energy in the IRA outweigh the promotion of fossil fuel energy by 24:1 – that is 24 tons of carbon emissions will be reduced for every 1 ton added. That’s why projections show this bill leading to 44% reduction in greenhouse gas emissions by 2030, which is about two-thirds of the reductions we need to reach our goal of at least a 50% cut by 2030. That will give us a fighting chance to hold global warming to 1.5 degrees Celsius and avoid catastrophic climate impacts.
Here’s a detailed look at the climate, clean energy, and environmental justice provisions that are in the bill:
Investments and Programs
- Over $160 billion in estimated value for new and expanded clean electricity tax credits will incentivize the transition to a cleaner power supply, driven by wind, solar, and batteries. This is further bolstered by about $25 billion in loans, grants, and other forms of financial assistance to build a cleaner grid and power sector across the country.
- An estimated $43 billion in production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, clean hydrogen, and critical minerals processing. Plus, $10 billion in investment tax credits to build clean technology manufacturing facilities, like facilities that make electric vehicles, wind turbines, and solar panels. Billions in loans and grants to build new clean vehicle manufacturing facilities and retool existing auto manufacturing facilities to manufacture clean vehicles across the country
- More than $8 billion for clean fuel production, from biofuels to sustainable aviation fuel.
- Over $40 billion in tax credits to clean up America’s buildings – from commercial high-rises to residential homes and multifamily houses. This is driven even further with more than $10 billion in grants, loans, and other forms of financial assistance to build cleaner buildings and cleanup the buildings we already have.
- $2 billion for National Labs to accelerate breakthrough energy research.
Tax credits for consumers and communities
- Two new clean vehicle tax credits – one for new vehicles and one for used – will bring down the upfront cost of clean vehicles and are estimated to provide about $10 billion in benefit to Americans.
- A revamped energy efficiency tax credit will help cover the upfront cost of energy efficiency and electrification upgrades around the house, estimated to provide more than $12 billion in benefits.
- An expanded tax credit will bring down the cost of putting solar on your roof and a battery backup system in your house, estimated to provide more than $22 billion in value.
- $9 billion in new federal funding for state-run home efficiency programs, with an emphasis on helping low- and moderate-income households
- A new $1 billion funding stream focused on bolstering resilience, and energy and water efficiency for affordable housing
- $27 billion in landmark funding for Green Banks across the country will deploy massive amounts of clean building technologies, distributed clean electricity, and clean vehicle infrastructure across the country with an emphasis on disadvantaged communities.
- Two new environmental justice block grants that will provide funding to reconnect communities, including $3 billion for Environmental and Climate Justice Block Grants and $3 billion for Neighborhood Access and Equity Grants, to help address the disproportionate environmental and public health harms related to pollution and climate change.
- $1.5 billion investment nationwide to plant trees, establish community and urban forests, and expand green spaces in cities, which combats climate change and provides significant community benefits by increasing recreation opportunities, cooling cities, lowering electric bills, and reducing heat-related death and illness.
- $1 billion for clean buses, garbage trucks, and transit buses that can be deployed across the state, with an emphasis on deploying these vehicles in disadvantaged communities.
- Reinstating the Superfund tax, so that Superfund sites have a guaranteed source of funding, paid for by the companies responsible for the pollution, that raises an estimated $11 billion over the next 10 years.
- $3 billion for grants to reduce pollution at ports, to combat poor air quality in nearby communities, as well as targeted funding for the vehicles moving goods
- $2.6 billion to conserve, restore, and protect marine and coastal habitats, including funding for marine mammals and fisheries stock assessments.
This is a historic moment in our movement for a safe climate and climate justice. As Senator Ed Markey (D-MA) pointed out, 12 years ago, the last time we had major climate legislation before the Senate, we could not get it done. We could not even get a vote. What has changed in the past 12 years? All of you have organized and built this movement into a powerhouse. And you’ve helped people understand that acting on climate is a moral imperative. Because of you, we have a real chance now to secure a safe climate for generations to come. Let this victory sustain you for the struggle ahead.
The Inflation Reduction Act is a huge step – but only a step– toward a safe climate and climate justice. In the months ahead we will be pushing the Biden administration to achieve greater emissions and pollution reduction through more aggressive administrative actions, such as stronger vehicle fuel economy standards and power plant rules. We anticipate having some updates and actions to share in the coming weeks.
Thank you for keeping the faith: your dedication and support over the years made this historic moment possible!