This week, President Joe Biden signed a new, ambitious bill that aims to tackle human-caused global warming in the coming decade.
The Inflation Reduction Act, which the House and the Senate approved on parties earlier in the month, also tackles inflation, the deficit in the federal budget, prescription drug prices subsidizing health insurance and corporate taxes, and other issues. Biden returned from a brief holiday to sign the bill to law, writes Jim Tankersley for the New York Times.
“This bill is the biggest step forward on climate ever,” the president declared during the bill’s signing ceremony.
Indeed, the law is the most significant investment the U.S. has made toward combating climate change, according to CNN‘s Maegan Vazquez and Donald Judd. The law incentivizes companies to create more green energy sources and credits and rebates to encourage people to switch to greener energy sources.
“It’s a landmark achievement,” says Gregory Wetstone, the American Council on Renewable Energy’s chief executive officer, in a letter to Politico‘s Ben Lefebvre, Kelsey Tamborrino, and Josh Siegel. “We haven’t had a policy that was a part of the United States that was focused on driving the shift to renewable energy and tackle our climate crises. Now we’re looking at a plan that’s adequate for the job.”
Concerning climate change, the law’s primary goal is to help the country cut greenhouse gas emissions in the next decade. Biden is determined to reduce emission levels by 50% from the ranks of 2005.
The law offers $260 billion of new and expanded clean-energy tax credits to incentivize utility companies and energy firms to generate more significant amounts of solar and wind hydropower energy. Tax credits are designed to motivate manufacturers to create more renewable energy-related equipment, like solar panel systems or turbines for wind. Jeff Stein, Maxine Joselow, and Rachel Roubein write in The Washington Post that the tax credits are designed to create “new green energy production cheaper for utilities to build than fossil fuel plants.”
It also contains $1.5 billion that will be given to oil and gas companies to reduce their carbon emissions from methane, a greenhouse gas that traps heat in the air. A further $27 billion will be allocated to so-called ” green banks,” which help encourage private and public investment in clean-energy infrastructure and technologies.
Consumers could see the benefits of this Inflation Reduction Act in their wallets, too. It will provide the possibility of $80 billion in new rebates on electronic vehicles and other energy efficiency improvements for homes. In the coming year, individuals and couples can qualify for a $7,500 tax credit when they purchase an electric vehicle for the first time or $4,000 if they purchase a used electric car.
“It’s steering everything toward making more affordable, more accessible [electric vehicles] for the mass market,” says John Helveston, an engineer at George Washington University, to NPR’s Laura Benshoff.
Owners of homes who put in solar panels, heat pumps, and electric induction cooktops or make changes to the insulation in their homes and electrical and wiring are also eligible for credit.
Families that benefit from these incentives will be able to enjoy “lower monthly energy bills, reduced bill volatility and a lessening of disproportionately high energy burdens within disadvantaged communities,” states Jamal Lewis, director of policy partnerships at the non-profit organization that promotes electrification Rewiring America, to the Guardian’s Oliver Milman.
However, the new law makes investments in fossil fuels a move added to win senatorial support, Joe Manchin, reports NPR’s Rebecca Hersher. This is why the bill has been met with criticism from environmentalists. “It feels like what the bill is giving with one hand, it’s taking with the other,” Juan Jhong-Chung, the climate director for the Michigan Environmental Justice Coalition, informs NPR.
The Inflation Reduction Act was passed through Congress without Republican support. During the debate over the legislation, Senator Pat Toomey said it was a “reckless tax-and-spending bill,” according to the WFMZ’s Patrick Cloonan, and expressed doubt about whether the bill will affect reducing inflation. The U.P.’s Wharton School issued a study that, while the bill will reduce the federal government’s deficit and could improve the economy, the statement “would have no meaningful effect on inflation in the near term.”