Inflation Reduction Act
The Inflation Reduction Act (IRA), signed into law by President Joe Biden in August 2022, is a milestone in the country’s response to the climate crisis. The act is considered the most significant investment in combating climate change in U.S. history.
Key Takeaways From the Act
Here are 10 key takeaways from the Inflation Reduction Act according to Environmental Leader and Euro News Green.
1. Investment in clean energy: The IRA extends existing tax credits and creates new incentives for investment in clean energy technology, including wind and solar power. This investment could more than triple clean energy production in the U.S., enough to power 110 million homes.
2. Tax credits for electric vehicles, solar panels, and more: The bill includes incentives for consumers to invest in green technology. There is a home improvement credit for heat pumps or insulations, and a deduction of 30 percent of the cost of solar panels and battery storage. For those looking to replace their cars with electric vehicles, there will be a $7,500 credit on new EVs and $4,000 for used ones.
3. Billions for communities suffering the most from pollution: The IRA includes $60 billion to help disadvantaged communities to monitor and clean up pollution while building resilience to the consequences of the climate crisis. It also sets the first methane fee to penalize companies emitting amounts of this greenhouse gas.
4. More green jobs will be seen and created: The act encourages the manufacture of clean technology in the U.S. and boosts renewable energy production, likely creating green jobs. Energy Innovation estimates that around 1.5 million new roles in construction, manufacturing, and service could be created by 2030.
5. Not everyone is happy with the Act: There are concerns over what the IRA offers to fossil fuel companies. A group of 350 climate groups signed a letter calling on the U.S. government not to include handouts to the fossil fuel industry or invest in fossil fuel industry scams to reduce emissions.
READ ALSO: How to Apply For the $7,500 IRS Credit Under the Inflation Reduction Act
6. The IRA brings the country closer to meeting U.S. climate goals: The IRA may not fully achieve the Biden administration goal of reducing half of all carbon emissions by 2030, but a Department of Energy analysis estimates that the bill could reduce emissions by about 40 percent in that time frame.
7. Experts say more change is needed: While the IRA is a promising development, more comprehensive action is in need to achieve the Paris Agreement’s two-degree limit for global temperature change. More comprehensive action includes reducing greenhouse gas emissions, promoting clean energy, and transitioning to a low-carbon economy.
8. The IRA includes a focus on research and development: The bill includes funding for research and development of new technology for clean energy and reducing greenhouse gas emissions. This focus on research and development will likely lead to more breakthroughs and innovation in these areas.
9. The IRA supports farmers and foresters in reducing emissions: The act includes incentives for farmers and foresters to reduce emissions by sequestering carbon in soil and planting trees that will reduce the carbon footprint of agriculture and forestry.
10. The IRA includes a carbon border adjustment, which will impose tariffs on imports from countries that do not have their carbon pricing system. That will create an incentive for countries to implement their carbon pricing system and reduce emissions.
Overall, the Inflation Reduction Act is a significant investment in combating climate change in the U.S… It includes investment in clean energy, and tax credits for green technology, and aims to help disadvantaged communities to monitor and clean up pollution while building resilience to the consequences of the climate crisis. The act will likely create green jobs, focus on research and development, and support farmers and foresters in reducing emissions. However, more comprehensive action is needed to achieve the Paris Agreement’s two-degree, limit for global temperature change.