President Joe Biden will soon sign America’s first big climate legislation, making good on his pledge to reduce the nation’s fossil fuel emissions and allocate hundreds of billions of dollars to the battle against global warming.
The House approved the Inflation Reduction Act of Representatives on Friday with a vote of 220-207. Republicans did not support the bill.
The legislation was approved by all 50 Democrats in the Senate on Sunday following a protracted debate that lasted days. Vice President Kamala Harris cast the tie-breaking vote in the Senate. Republicans did not support the bill in the Senate, as they did not in the House. The bill will now go before Biden, who is anticipated to sign it into law as soon as possible.
Democrats’ overall spending and tax plan meet several top concerns, including raising the minimum wage and cutting the debt. However, the majority of the funds will address the climate crisis. This comprises around $370 billion in investment, including tax credits to encourage the use of electric vehicles and clean energy, as well as financial incentives for businesses to increase their renewable energy production and invest in carbon dioxide abatement technologies.
A significant improvement over last year, when Biden’s planned $2 trillion Build Back Better Act, which included more than $500 billion in climate change money, was approved by the House but failed in the Senate, the bill’s passage this year is a victory for the battle against climate change. According to experts, even the scaled-back Inflation Reduction Act is a significant achievement that has the potential to cut the country’s greenhouse gas emissions by 40% by the end of the decade. The law, according to Biden, is “the biggest investment ever made in addressing the existential crisis of climate change.”
How does the Inflation Reduction Act encourage the use of clean, renewable energy?
Tax credits are the key driving force behind the Inflation Reduction Act, which the administration thinks would assist in shifting the nation’s economy and consumers away from fossil fuels and toward renewable energy. The law extends a number of renewable energy tax incentives that are currently in place. Additionally, it develops fresh incentives for spending money on clean energy technology.
This includes billions of dollars for investments and incentives to encourage industrial companies to use clean energy in their manufacturing and production to lower US carbon emissions. These funds will also increase electrical power production through wind and solar energy.
The measure provides tax credits to encourage people to purchase and use heat pumps, electric appliances, and other energy-efficient home technologies. Tax credits are also included for solar panels, battery storage, and electric vehicles. This includes establishing a $4,000 credit for used electric vehicles and extending a $7,500 tax credit for purchasing a new electric vehicle. The purchase of electric vehicles for commercial use is also eligible for credits.
According to climate experts, the plan may lower US emissions in 2030 by approximately 40% below 2005 levels. This would be a big step toward preventing the worst effects of global warming.
Before becoming president, Biden pledged to cut greenhouse gas emissions in the nation by at least 50% by 2030. The Paris Agreement’s larger objectives, which include keeping global warming below 1.5 degrees Celsius to prevent irreversible effects on ecosystems and human health, include that target.
The Inflation Reduction Act allocates $60 billion to aid Americans who have suffered the most from the pollution caused by fossil fuels. This entails supporting initiatives to reduce pollution while simultaneously fostering resilience in areas most impacted by the effects of climate change, such as communities devastated by wildfires, damage from more powerful storms and hurricanes, and sea level rise.
The bill also imposes fines on businesses that release too much methane.
What impact will the bill have on the economy, if any?
According to the Biden administration, the Inflation Reduction Act will generate green jobs since it promotes the manufacturing of clean technology in the US and will increase the usage of renewable energy.