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What the Inflation Reduction Act Means for Climate

Democrats in the Senate have passed the Inflation Reduction Act, a bill that will invest $369 billion in climate solutions and environmental justice. The bill would put us on a path to 40% emissions reduction by 2030 while restoring U.S. credibility to lead climate action on the global stage.

We knew there would be painful provisions in any bill that could get Sen. Joe Manchin’s support, and the bill contains some troubling giveaways to fossil fuel interests that will cause undue harm to communities in the Gulf and Alaska. As a whole, however, it would be a huge step forward in the fight to preserve a livable planet and is one we need to take while we have the chance. Earthjustice is advocating for the bill’s swift passage in the House because climate cannot wait.

What happened:

  • The bill passed 51-50 in the Senate on Aug. 7, with all Democrats voting in favor and Vice President Kamala Harris casting the tie-breaking vote.
  • Obtaining support from senators Joe Manchin (D.-W.Va.) and Kyrsten Sinema (D-Ariz.) was critical because Democrats control the Senate by one vote.
  • A previous ambitious climate bill, the House-passed Build Back Better Act, sank after Manchin opposed it.

Some notable wins for climate in this bill:

The Inflation Reduction Act would accelerate a clean energy transition that will lower energy costs for people across this country by:

  • Expanding access to clean energy by making clean energy tax credits more accessible and extending them by 10 years. 
  • Creating jobs and increasing our country’s energy security by investing $60 billion in manufacturing solar panels, batteries, and other clean energy technologies in the U.S.
  • Providing funding for low-income families to electrify their homes, including $9 billion in home energy rebate programs.
  • Removing barriers to community solar, an innovative solution to making solar power more accessible and affordable for the average person.

The transportation sector is the largest contributor to U.S. greenhouse gas emissions and spews massive amounts of toxic air pollution into communities across the country. This bill would help transition the sector away from fossil fuels and invest billions in zero-emissions transportation, including:

  • $3 billion for the U.S. Postal Service to electrify its fleet of more than 217,000 vehicles, the largest government fleet in the nation. 
  • $1 billion for clean school and transit buses, garbage trucks, and other heavy-duty vehicles, prioritizing communities overburdened by air pollution.
  • $3 billion to clean up air pollution at ports by installing zero emissions equipment and technology, with much of the funds going to portside communities that are breathing disproportionately high levels of toxic air pollution.
  • Tax credits for electric vehicles.

Communities of color and low-income communities face disproportionate harms from pollution and the climate crisis. Climate solutions must be led by and for these communities. This bill would fund:

  • $315.5 million for air monitoring so that communities know exactly what’s in the air they breathe, with specific funds for schools and those living near polluting industry. 
  • $3 billion for community-led projects in areas experiencing the disproportionate impacts of pollution and climate change. 
  • The reinstatement of the Superfund Tax so that industry—not the public—foots the bill for cleaning up their pollution.

Industrial agriculture fuels the climate crisis – and the climate crisis in turn threatens agriculture. This bill would advance practices that make farming climate-friendly, with:

Some of the best technology for fighting the climate crisis is already available in nature. Oceans and ancient trees store carbon, shelter species facing climate catastrophe, and sustain communities. This bill would provide:

  • $50 million to advance protections for mature and old-growth forests.
  • $2.6 billion in coastal resilience grants to fund projects, including by state and tribal governments, to protect and restore coastal communities and ecosystems.
  • $250 million to implement endangered species recovery plans and address climate change impacts on key habitats.
  • $1 billion to ensure federal agencies can conduct robust environmental and NEPA reviews and public engagement on large projects using federal funds or on federal lands.

What would the Inflation Reduction Act mean for you? It includes tax credits and rebates to help people electrify their homes and vehicles, including:

  • A 30% tax credit for installing residential solar panels.
  • Up to $7,500 for purchasing an electric vehicle.
  • Up to $14,000 for home energy efficiency upgrades, including up to $8,000 to install a heat pump.
  • Making these changes could help families save $1,800 per year on energy bills and make their costs more stable and predictable compared with volatile fossil fuel prices.

The cost of a compromise:

  • The bill includes tax credits for carbon capture and sequestration (CCS) that could extend the life of dirty coal plants, which would make it harder to reach critical targets for clean power while exposing residents to toxic coal pollution.
  • It mandates the federal government to offer up parts of the Gulf of Mexico and Alaska’s Cook Inlet for oil and gas development. It also requires additional oil and gas leasing in order for new wind and solar projects to be approved.
  • There is a side deal to move a separate bill in September for so-called “permitting reform” that could weaken core protections under the National Environmental Policy Act, the federal law that gives communities a voice in what happens to the environment around them.

What happens next:

  • The House is scheduled to vote on the bill on Aug. 12.
  • It would then move to President Joe Biden's desk for signature.
  • We urge the House to act swiftly to pass this meaningful climate legislation.
A 150 kilowatt photovoltaic array at the Food Bank of Northern Nevada, in Reno.

A 150 kilowatt photovoltaic array at the Food Bank of Northern Nevada, in Reno.

Black Rock Solar / CC BY 2.0