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In order to keep his commitment to reducing the nation’s use of fossil fuels and commit hundreds of billions of dollars to the battle against climate change, President Joe Biden is about to sign the nation’s first big climate bill.
The House approved the Inflation Reduction Act of Representatives by a vote of 220-207 on Friday. Republicans did not support the legislation.
After a protracted Senate debate on Sunday, during which all 50 Democrats voted in favor of the measure, the House voted on it a few days later. During the Senate vote, Vice President Kamala Harris broke the tie. Republicans in the Senate did not support the bill as they did in the House. As soon as Biden receives the legislation, he is anticipated to sign it into law without delay.
Democrats’ broad-reaching aims, such as expanding access to health care and decreasing the budget, are addressed by the comprehensive spending and tax package. The climate catastrophe will, however, be addressed with the majority of the funds. This comprises around $370 billion in investment, including tax credits to support the use of electric vehicles and clean energy, as well as incentives for businesses to increase the production of renewable energy and support carbon dioxide abatement technologies.
The passing of the package is a victory for the battle against climate change and a notable improvement from last year when the House passed Biden’s planned $2 trillion Build Back Better Act, which included more than $500 billion in climate change money, but the Senate rejected it. By the decade’s end, experts predict that the Inflation Reduction Act will have reduced greenhouse gas emissions by 40% even as it has been scaled back. As the “biggest investment ever in tackling the existential catastrophe of climate change,” Biden referred to the law.
What specific ways will the Inflation Reduction Act encourage the use of clean energy?
Tax credits, which the administration thinks will aid in the country’s industry and a consumer shift away from fossil fuels and toward renewable energy, are the primary driving force behind the Inflation Reduction Act. The bill is extending several tax benefits for renewable energy. The investment in renewable energy technology is also given fresh incentives.
To minimize US carbon emissions, billions of dollars will be utilized to increase the generation of electrical power using wind and solar energy, as well as to provide investment and incentives for industrial businesses to employ clean energy in their manufacturing and production.
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In order to encourage consumers to purchase and use heat pumps, electric appliances, and other energy-efficient home technologies, the measure contains tax benefits. Tax breaks for consumers to purchase solar panels, battery storage, and electric vehicles are also included. This includes establishing a $4,000 credit for used electric vehicle purchases and extending a $7,500 tax credit for the purchase of a new electric vehicle. In addition, tax credits are available for buying electric cars for business use.
By 2030, the plan, according to climate experts, could bring US emissions down by 40% from 2005 levels. By doing so, we would take a big step toward preventing the worst effects of climate change.
Previously, Biden had set a target of at least a 50% reduction in greenhouse gas emissions by 2030 for the nation. This target is a subset of the larger objectives outlined by the Paris Agreement, which aims to limit global warming to 1.5 degrees Celsius in order to prevent irreversible effects on ecosystems and human health.
The Inflation Reduction Act allocates $60 billion for the assistance of Americans who have experienced the harshest effects of fossil fuel pollution. This entails supporting initiatives to reduce pollution while simultaneously fostering resilience in areas most impacted by the effects of climate change, such as sea level rise, damage from stronger storms and hurricanes, and areas devastated by wildfires.
Companies that produce too much methane will also be fined under the legislation.
What estimated economic impact would the bill have?
The Biden administration asserts that the Inflation Reduction Act would provide green jobs since it promotes the development of clean technology in the US and will increase renewable energy production.