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Inflation Reduction Act of 22: What will the bill mean for US carbon emissions?

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The US Senate is set to pass the Cut Inflation Act of 2022, which would include the largest climate spending program in US history. What effect could this have?

Environment August 5, 2022

Cut Inflation Act 2022 provides funding for environmental initiatives

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In an about-face from what appeared to be stalled negotiations last week, the US Senate is expected to pass the largest climate spending package in US history under a bill called Inflation. Reduction Act of 2022. The Senate is expected to begin debate on the legislation on Saturday. Here are some of the things it contains and what it could mean for climate change.

What is the Inflation Reduction Act of 2022?

The Inflation Reduction Act aims to fight inflation through policies that would reduce the cost of energy as well as the federal deficit. According to a draft version of the bill, it is expected to generate about $739 billion in revenue from a new minimum corporate tax. , improving tax enforcement and prescription drug reform. In addition to health care spending, $369 billion is spent on energy and climate change priorities.

What are the most important climate provisions of the bill?

The bill aims to reduce greenhouse gas emissions in two main ways: electrifying things that currently run on fossil fuels and generating more electricity using renewable and clean energy sources.

On the electrification side, the bill currently includes a $4,000 tax credit for used electric vehicles and a $7,500 credit for new electric vehicles, as well as tax credits for low-carbon home renovations, such as installing heat pumps and rooftop solar panels. It also devotes $6 billion to reducing emissions from hard-to-decarbonize industries like cement plants, chemical plants and steel mills. The US Postal Service, the largest source of federal emissions after the US military, is getting $3 billion to buy zero-emission vehicles.

On the power generation side, the bill contains $30 billion in subsidies and establishes tax credits for states and electric utilities to embrace clean energy and energy storage. , which is essential to maintain grid stability with higher levels of intermittent renewable sources. This includes support for hydrogen and carbon capture technologies, as well as new tax credits to keep nuclear power plants running. And it includes $60 billion to support clean energy manufacturing aimed at accelerating production of solar panels, wind turbines, electric vehicles and heat pumps.

The bill also establishes a program to reduce the leakage of methane, a super potent greenhouse gas from natural gas production, by fining companies for every tonne emitted. Beyond reducing emissions, it includes $60 billion in support for environmental justice initiatives, such as improving public transportation in underserved areas. communities and reduce air pollution in ports.

How much would the bill reduce US emissions?

An initial analysis by Rhodium Group, an independent energy think tank, estimates the bill would cut U.S. greenhouse gas emissions 31-44% below 2005 levels by 2030; other modelers have found similar reductions. Without the bill, Rhodium found that the United States was on track to reduce emissions 24-35% below 2005 levels by 2030. Expected reductions are still below the goal Biden administrations of a 50% reduction by 2030, but the gap could be offset by executive action, says Holly Burke of Evergreen Action, a US climate advocacy group.

Why has the bill been controversial among some environmental groups?

While praising the bills’ support for climate priorities, environmental groups have pilloried its concurrent support for the development of new fossil fuels.

A provision of the bill states that approval for renewable energy development on federal lands is contingent on the auctioning of oil and gas leases. The bill also requires the Department of the Interior to sell leases for oil and gas drilling in the Gulf of Mexico and off the coast of Alaska. “The bill is a hostage situation,” says Jean Su of the Center for Biological Diversity, an American environmental group. There are major investments in renewable energy in this bill, but at the same time, there are horrible freebies for fossil fuels.

The bill was negotiated in secret by Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York. Manchin had said he would not support similar legislation, but in a surprise announcement on July 27, he revealed that senators had reached an agreement.

Manchins’ support hinged on the passage of a separate bill intended to speed up the permitting process for new energy projects, including a gas pipeline in West Virginia. Faster permits could be a boon for the construction of renewable energy projects and transmission lines, but Su says it could also help fossil fuel projects and create an environmental review process that excludes communities and threatens wildlife.

Arizona Sen. Kyrsten Sinemas’ announcement Thursday that she would support the bill gives Democrats enough votes to push the bill through a process called fiscal reconciliation, which would allow the bill to pass. adopted with 50 votes. The Senate is expected to begin debate on the bill on Saturday if it passes the Senate parliamentarian’s review.

What are the other parts of the bill to watch on climate?

The bill puts $27 billion into a green bank to invest in public-private partnerships that reduce emissions, including $8 billion specifically targeted to disadvantaged communities. It also contains significant funding for research, with $2 billion for basic research in national laboratories, including fusion and high-energy physics infrastructure.

Other parts of the bill focus on agriculture, which accounted for 11% of U.S. greenhouse gas emissions in 2020. The bill sets aside $20 billion for climate-smart farming practices. climate, such as the reduction of methane emissions and the accumulation of carbon in the soil. There are grants and credits to support biofuels, including infrastructure for more sustainable jet fuel. And $5 billion will go toward making forests more resilient to wildfires as well as planting trees in urban settings. $2.6 billion will go to funding and grants to protect coastal communities and habitats.

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2/ https://www.newscientist.com/article/2332499-what-will-the-inflation-reduction-act-mean-for-us-carbon-emissions/

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