They really did. The Inflation Reduction Act, essentially a climate change bill with the one hand helping to reform healthcare, through the Senate on Sunday; by all accounts, it will easily pass the House, so it is about to become the law.
This is a very big deal. This action by itself is not enough to avert climate catastrophe. But it’s a big step in the right direction and sets the stage for more action in the years to come. It will promote progress in green technology; its economic benefits will make it easier to pass additional legislation; it gives the United States the credibility it needs to lead a global effort to limit greenhouse gas emissions.
Of course, there are skeptics who want to smear the achievement. Some people on the left rushed over reject the bill as a gift to the fossil fuel industry, seeing it as environmental action. More importantly, Republicans – who are unanimously opposed to the legislation – are shouting the usual things they shout: Big spending! Inflationary!
However, energy and environmental realists are excited about what has been achieved, and serious economists aren’t worried about the effects of inflation.
Start with the environmental aspect. Many of the people I spoke to suggested that President Biden’s environmental agenda, as in his original Build Back Better proposal, must have been heavily applied to the legislation that we actually have. Okay. After all, the Democrats don’t have to make big concessions to win over Senator Joe Manchin? There are no significant gifts to fossil fuel interests, such as aid to a natural gas pipeline?
However, energy analysts believe that any adverse climate impact from these concessions will be affected by the gains from tax credits for clean energy. The REPEAT projectcompiled by Princeton’s ZERO Laboratory, created a side-by-side comparison cuts emissions under the Inflation Reduction Act and the Build version returns better to the previous Home. They estimate that by 2035 the IRA will provide more than 90% of the emissions reductions that the BBB will achieve. After all that legislative drama, Biden’s climate policy remains essentially intact.
How can this be? From the outset, the Biden administration decided that its climate policy would be carrots, no sticks — that it would provide incentives to do the right thing, not punishments for doing the wrong thing. left. This strategy, it is hoped, will prove politically viable in a way that a carbon tax will not. And this hope has been vindicated.
Furthermore, it’s a strategy that seems likely to pay political dividends in the future. One new researchby E. Mark Curtis and Ioana Marinescu, found that “the growth of renewable energy leads to the creation of relatively high-paying jobs, often not located in areas that could be lost to reductions fossil fuel mining. “
So what has the Biden administration lost? Unfortunately, for the most part social spending The BBB that was originally included – child tax credits, universal pre-K and more – has been cut. It is tragic that, despite the enhanced health insurance subsidy – that has helped bring America’s uninsured rate to record low – has been extended. But Democrats have delivered on their climate promises, more or less fully.
What about the reviews from the right? Next to pathetic effort to portray the IRA as a big tax hike for the middle class, Republicans like Mitt Romney are trying to combine the legislation with last year’s US Rescue Plan, which they say has caused inflation to spike.
The climate and the world are changing. What challenges will the future bring, and how should we respond to them?
Never mind whether this statement is true. It’s important to do the math. The Inflation Reduction Act calls for $500 billion less in spending over a decade, compared with the US Rescue Plan’s $1.9 trillion in a year – and will actually deficit reduction. That is why independent analysts see that it will have little effect on inflation.
But if the spending isn’t so huge, how can it have such a big impact? The answer is that right now we are sitting on some kind of vertex. Renewable energy technology has made revolutionary progress and renewable energy has become cheaper in many areas than fossil fuels. A moderate boost from public policy is all it takes to transition to a much greener economy. And the Inflation Reduction Act will deliver that kick.
With all this in mind, though, why is every Republican senator voting against the IRA? They are not all ignorant and innumerable; I’m pretty sure Romney, for example, knows he’s talking nonsense.
Nor can we easily invoke ideological differences. The IRA’s environmental push is largely based on tax credits — and Republicans themselves have used tax credits to achieve social goals, like (much abused) Opportunity Zone Donald Trump’s 2017 tax cut credits.
Almost certainly, what we’re really looking at is defiant politics. Every Republican in the Senate is willing to kill our best chance of avoiding climate catastrophe, simply to deny the Biden administration victory.
The good news is that the law passed despite their defiance. And the world is a more hopeful place than it was a few weeks ago.
