By Yemi Olakitan
The prospect of sea level rise puts many low-lying areas at risk of being uninhabitable by 2100.
The Intergovernmental Panel on Climate Change (IPCC) predicts that catastrophic climate-related disasters will continue to occur until global warming is brought below 2 degrees Celsius, ideally to 1.5. Through climate enactment, we can deal with climate-related crises and live safely.
Currently, the United States (U.S.) is leading the way by putting into effect the Inflation Reduction Act (IRA), one of three laws related to climate change that were passed in the past year to safeguard citizens.
The Inflation Reduction Act (IRA), which was approved by the legislature in August, commits funds to lowering the cost of switching to clean energy sources and creating a supportive environment for green jobs. According to Coral Davenport of the New York Times, $370 billion has been allocated to combating climate change, some of which will be given to consumers as tax credits and rebates to help them save thousands of dollars on energy-efficient appliances, plug-in cars, and renewable electricity for their homes.
According to experts, the IRA is the biggest climate change legislation to ever be passed, with a focus on integrating renewable energy into the nation’s economic and social structure.
The bill aims to cut carbon emissions to 42% as predictions indicate that the nation will reach its net-zero targets. Additionally, it would devote $391 billion on energy security and climate change, paving the door for American energy independence.
The IRA includes investments in areas such as $128 billion for renewable energy, $30 billion for nuclear power, $13 billion for incentives for electric vehicles, $36 billion for home energy, $37 billion for advanced manufacturing, $32 billion for rural economies, and $3 billion in tax breaks for carbon capture installation. Additionally, it allocates funds for underprivileged neighbourhoods, forests, farmers, environmental justice, climate-smart agriculture, and decarbonization.
How might other nations adopt this approach?
A good fiscal strategy is needed to achieve and implement a policy like the IRA. IRA is a fiscal strategy that raises money by raising taxes and using funding from government projects. The paper claims that a 1 percent excise tax on stock buybacks and a minimum tax of 15% on large firms are what fund IRA spending.
The Internal Revenue Service’s (IRS) funds for tax collection, the Superfun fee, the methane fee, and savings from healthcare initiatives are additional sources of IRA spending. The nation will save $237 billion if IRA spending is as anticipated at $500 billion and revenues are as expected at $737 billion over the next ten years.
Developed nations can adopt this policy by increasing taxes on fossil fuel profits and utilising the resulting revenue to lower the price of switching to clean energy and making investments. Similar to developed nations, developing nations can use climate funds as a financial incentive to reduce the cost of businesses converting to green operations.
By creating an atmosphere that encourages private sector investment in clean energy start-ups and giving governmental investments in green technology research and development priority, leaders can combat the climate catastrophe, claims Gate Notes.
The IRA offers a framework for climate resilience that might assist nations in reducing the catastrophic impact and risk of losing people, homes, and communities to adverse effects. From January 1, 2022, to October 11, 2022, 15 weather/climate crisis occurrences cost the United States more than $1 billion, according to a report from the National Centers for Environmental Information. Flooding is a frequent occurrence in Lagos, Nigeria since Victoria Island and Atlantic City are only partially protected by the Lagos Wall, a sea defence.
The IRA’s signing brought attention to how money would be raised through tax breaks and credit relief. On the other hand, accommodations are made for marginalised and at-risk communities that are impacted by emissions. Additionally, adopting and enhancing home energy efficiency results in lower residential energy costs.
It also includes advancements in transportation, aviation, heating, ventilation, air conditioning, and industrialization.
Countries must give sustainable policies top priority if they want a framework for climate resilience. Mechanisms for coping with the effects of climate change as well as proactive measures must be taken into consideration while creating these policies.
By presenting possibilities for transition, the IRA will address the impact of climate change on the United States. This serves as a kind of model for developing nations. Imitating the IRA will help other nations’ efforts and support global pledges to address the climate challenge.