Sen. Joe Manchin of West Virginia and Senate Majority Leader Chuck Schumer of New York introduced a reconciliation plan on Wednesday that would commit hundreds of billions of dollars to the fight against global warming and the advancement of clean energy initiatives.
The “Inflation Reduction Act of 2022,” a 725-page piece of legislation, allocates $369 billion for climate and clean energy policies, making it the most aggressive climate investment ever made by Congress. A summary of the agreement states that the climate elements in the bill will reduce the nation’s carbon emissions by about 40% by 2030.
The sudden announcement of the agreement came less than two weeks after Manchin, a major centrist who controls the outcome of a 50-50 Senate vote, declared that he would not support any climate-related legislation until he had a better knowledge of the inflation rates for July.
If approved and signed into law, the legislation would fund the following programs:
The clean energy industry (and more specifically manufacturing), including a $30 billion additional production tax credit to speed up domestic manufacturing of solar panels, wind turbines, batteries, and crucial minerals processing, as well as a $10 billion investment tax credit to manufacturing facilities for things like wind turbines, solar panels and electric vehicles. Additionally, it would include $2 billion for the renovation of current auto factories to produce clean vehicles and up to $20 billion in loans to develop new clean vehicle manufacturing facilities around the United States.
Research and Development costs, including $2 billion for ground-breaking energy research in government labs and a $27 billion clean energy technology accelerator to support the adoption of solutions that reduce emissions.
Reducing emissions, including $3 billion for port air pollution reduction and $20 billion for the agricultural sector. Additionally, it contains undefined financing for a programme to cut methane emissions, which are more than 80 times more potent than carbon dioxide at warming the environment and are frequently created as a byproduct of oil and gas production. Additionally, the legislation allots $9 billion for the federal government to purchase clean technology developed in the United States, $3 billion of which will go toward the purchase of zero-emission cars by the U.S. Postal Service.
Protecting and promoting natural resources, including $2.6 billion in grants to protect and restore coastal ecosystems, $5 billion in funding to support urban tree planting, forest conservation and healthy forests.
Support for the states, including $30 billion in grant and loan programmes for the electric companies and the states to expedite the switch to sustainable energy.
More than $60 billion has been spent on environmental justice efforts to address the disparate impacts of pollution on low-income and communities of colour.
Individuals will receive a $7,500 tax credit for purchasing new electric vehicles, as well as a $4,000 credit for purchasing used automobiles. Only consumers with low and moderate incomes would be allowed to use both credits.
“I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game,” on Wednesday, Manchin released a statement. “This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country.”
This legislation is set to be debated in the Senate next week after which it will be introduced in the House of Representatives, which is controlled by Democrats.
President Joe Biden urged the Senate to proceed on the legislation as quickly as possible on Wednesday, saying that the tax credits and investments in energy projects in the accord will create thousands of new jobs that would help to cut energy costs.
In order to achieve net-zero emissions by the middle of the century, the president has promised to reduce U.S. greenhouse gas emissions by between 50 and 52 percent from 2005 levels by 2030. According to a new estimate by the unbiased research firm Rhodium Group, without a reconciliation package, the nation is on course to fall short of that objective.
“This is the action the American people have been waiting for,” according to a statement issued by the president on Wednesday. “This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future.”
