By Nneka Nwogwugwu
Senate Democrats last Sunday passed a sweeping bill, known as the Inflation Reduction Act, that includes hundreds of billions of dollars to fight climate change.
The package calls for major spending to tackle the climate crisis, in addition to extending health care coverage and reducing the deficit. On top of tax credits to provide incentives for electric vehicles and clean energy, the bill aims to expand renewable energy production and fund the development of technologies to remove carbon dioxide from the atmosphere.
While the climate part of the legislation was significantly pared down from the Biden administration’s original ambitions in the Build Back Better Act, experts say that if the bill is enacted, it would be the largest investment to address global warming in U.S. history and that it would reduce the country’s greenhouse gas emissions.
CNBC’s Denise Chow, explained five ways the Inflation Reduction Act could actually fight climate change.
1.It includes huge investments in clean energy
The bill would devote $369 billion over 10 years for electric vehicle and clean energy tax breaks.
The tax credits, which are designed to help pivot industry and consumers to renewable energy systems, include incentives for electric appliances, heat pumps and other technologies to increase energy efficiency in homes.
Consumers would also be eligible for $7,500 tax credits for buying new electric vehicles and $4,000 credits for used electric vehicles.
2. It would keep climate goals within reach
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Climate experts say the bill could reduce U.S. emissions by about 40% below 2005 levels by 2030, an important step toward staving off the worst consequences of global warming.
President Joe Biden had set a goal of reducing greenhouse gas emissions in the country by at least 50% by the end of the decade. A preliminary estimate by the Rhodium Group, an independent research and data firm that tracks such targets, found that Biden’s goal could be achievable with the Inflation Reduction Act and other measures at the federal, state and local levels.
3. It aims to curb methane emissions
While the bill is being hailed as a historic breakthrough, it does include some concessions that resulted from hard-fought negotiations with Sen. Joe Manchin, D-W.Va. Senate Democrats agreed to include new oil drilling leases in the Gulf of Mexico and off Alaska.
Still, the measure would introduce a fee that would penalize fossil fuel companies for excess methane emissions from drilling oil and gas.
4. It emphasizes environmental justice
The climate bill earmarks $60 billion for environmental justice initiatives in disadvantaged communities that are disproportionately affected by climate change. That includes $3 billion in grants to promote clean and accessible transportation and $1 billion for clean buses, garbage trucks and other heavy-duty vehicles.
5. It sends an important message to international partners
Experts agreed that if it is implemented, the Inflation Reduction Act would play an important role in signaling to the global community that the U.S. is serious about doing its part to fight climate change.
The measure not only would help the country catch up to aggressive climate measures introduced in places like the European Union; it could spur other countries to act.
