National Climate Solutions and the Inflation Reduction Act

This fall, the United States Congress passed The Inflation Reduction Act. The main point of this piece of legislation was to fight climate change but to do so by balancing out any extra cost with a cost savings. In this way, the bill wouldn't cause an increase in the deficit and therefore would help with inflation.   As a result, the bill does several things at once. 

What's the Deal with Electrification? 

Before we plunge into the details of the IRA, we need to understand why a key climate goal is to make sure that as much of our energy use as possible comes from electricity.  Watch this video with McArthur Genus Grant Recipient Saul Griffith. 

There are also some serious health hazards that come from gas - especially gas stoves and furnaces. This article has excellent information - I won't quiz you on it, but life might!

We need to talk about  your gas stove, your health and climate change.

Or you can listen to it.

Reduce GHG Emissions 

Clean Energy Tax Credits: make green energy production cheaper 

Companies will receive tax subsidies for investing in  solar, wind, hydropower and other sources of renewable energy. This even includes companies that are manufacturing a specific part essential to a renewable project, such as wind turbines or solar panels. 

Rebates for Electric Vehicles, Home Energy and More. 

There are many different tax credits and subsidies for green, electrical energy technology:

• • • Tax credits for buying new OR used electric vehicles ( up to $7,500 for  new, $4,000 for used)
    • 30 % tax credit for home solar panels
    • Rebates for heat pumps (super efficient, electrical heating and cooling- check out SCP info/offer)
    • Subsidies for electric induction cooktops (amazing, efficient, chefs-love-these)

If you claimed all the subsidies and tax credits it would be up to $14K in savings, but also $1,800/year savings on energy bill. 

Reward for Cutting Methane Emissions

Oil and gas companies that reduce the methane that comes out of their oil and gas wells would get money to reward them (and help pay for the cost). Since methane traps heat very efficiently in the atmosphere, it is well worth the $1.5 billion in reward money!

Green Bank

Technically called a Clean Energy Accelerator are nonprofit finance institutions that use private and public money to loan to companies that are building clean energy technology and infrastructure. There are already Green Banks in 16 states and they help increase the pace and profitability of converting to renewable energy sources. 

Agriculture, Steel, Ports, etc, 

There is money to help farmers reduce emission by supporting land management practices that sequester or reduce greenhouse gases. Steel and cement plants produce a lot of air pollution and greenhouse gases. The bill includes tax credits for carbon capture and sequestration.

Increase Revenue to Offset Tax Credits/Rebates/Subsidies

Corporations Earning more than $1 Billion/year in Profits

Even though corporations have a 21% tax rate in the US, many of the richest don't pay any federal income tax due to loopholes and credits. Corporations can use existing tax evasion methods, but will have to pay a minimum amount. 

Tax Enforcement

The tax gap is the difference between what people and corporation owe and what they pay.  Increased budget for the IRS will allow them to go after as much as $1.4 trillion in unpaid tax revenue 

Prescription Drug Prices

Medicare will be able to negotiate drug prices. This means that they government won't have to accept whatever price drug companies say their product is worth. Instead they can reduce costs to the government and therefore to Americans.

There is also a $35/month cap on the cost of insulin for patients on Medicare. 

All of this will bring down the federal deficit by $300 billion over 10 years, more than any legislation since 2011

The Down Side

All legislation is a compromise and this was  no different. In order to get enough votes in congress, the bill had to include opening up more federal land to oil and gas development and fails to  shut down fossil fuel power plants. Democrats Got a Climate Bill. Joe Manchin Got Drilling, and More)

More Information

Here is a good graphic showing the spending and savings from the bill. Below shows the projected GHG emission reductions from the bill 

• he Inflation Reduction Act: The policies in the IRA, explained - Vox
• Five Decades in the Making: Why It Took Congress So Long to Act on Climate

• How the New Climate Bill Would Reduce Emissions

Fun video showing how everything requires energy (but also think about the indoor air pollution)