US President Joe Biden hands the pen to US Senator Joe Manchin (D-WV) while Senate Majority Leader Chuck Schumer (D-NY) and US House Majority Representative James Clyburn (D- SC) observes after Biden signed the “Inflation Reduction Policy” Act of 2022″ into law during a ceremony at the State Dining Room of the White House in Washington, August 16, 2022.
Lea Millis | Reuters
The Biden administration this year signed a Historical climate and tax agreement will channel billions of dollars into programs designed to accelerate the country’s clean energy transition and combat climate change.
As the United States grapples this year with climate-related disasters from Hurricane Ian in Florida to the Mosquito Fire in California, the Inflation Reduction Act signed into law in August is an important development to reduce mitigating the effects of climate change across the country.
The bill is the most aggressive climate investment ever made by Congress and is expected to cut about 40% of the country’s planetary carbon emissions this decade and move the country forward. zero economy by 2050.
The provisions of the IRA have important implications for clean energy and manufacturing businesses, climate startups and consumers in the years to come. As 2022 draws to a close, here’s a look back at key elements of legislation that climate and clean energy advocates will oversee in 2023.
Deals for electric cars
The deal offers up to $7,500 in federal tax credits for households buying new electric vehicles, as well as up to $4,000 in used EV credits for vehicles that are at least two years old. five years old. Starting January 1, those earning $150,000 a year or less, or $300,000 for joint filers, will be eligible for the new car credit, while those earning $75,000 dollars or less, or $150,000 for joint filers, qualify for the used car credit.
Despite a surge in electric vehicle sales in recent years, the transportation sector remains the country’s largest source of greenhouse gas emissions, with the lack of convenient charging stations being one of the barriers to entry. expansion. The Biden administration has set goals 50% of electric vehicle sales by 2030.
The IRA limits EV tax credits to vehicles assembled in North America and aims to remove U.S. battery material from China, which accounts for 70% of the global battery supply for vehicles. An additional billion dollars in the deal will provide funding for zero-emission school buses, heavy-duty trucks and public transit buses.
U.S. President Joe Biden gestures after driving a Hummer EV during a tour at General Motors’ electric vehicle assembly plant ‘Factory ZERO’ in Detroit, Michigan, November 17, 2021.
Jonathan Ernst | Reuters
The combination of the IRA tax credit and state policy will boost electric vehicle sales, said Stephanie Searle, program director at the International Council on Clean Transportation, a nonprofit. The agency predicts that about 50% or more of passenger cars, SUVs and pickups sold by 2030 will be electric. The group says for electric trucks and buses the figure will be 40% or higher.
Over the next year, Searle said the agency is overseeing the Environmental Protection Agency’s plans to propose new greenhouse gas emissions standards for heavy vehicles starting in the 2027 model year.
“With the IRA promoting electric vehicles, the EPA can and should boldly set ambitious standards for cars and trucks,” says Searle. “This is one of the Biden administration’s last opportunities to act aggressively on climate this term, and they should make good use of it.”
Towards methane emissions
Some pumps work while others do not in the Belridge oil field near McKittrick, California. Oil prices rose at the start of the Asian session as prospects for the Iran nuclear deal stalled and Moscow’s new fundraising campaign would limit global supply.
Mario Tama | beautiful pictures
This package imposes taxes on energy producers that exceed a certain level of methane emissions. Polluters must pay a $900 fine for every ton of methane emitted in 2024 that exceeds the federal limit, increasing to $1,500 per ton in 2026.
This is the first time the federal government has imposed a fee on the emission of any greenhouse gas. Global methane emissions are the second-biggest cause of climate change after carbon dioxide and come mainly from oil and gas extraction, landfills, sewage, and livestock farming.
Methane is a major component of natural gas and is 84 times more potent than carbon dioxide, but does not persist for long in the atmosphere. Scientists argued that limiting methane is necessary to avoid the worst consequences of climate change.
The Harris Cattle Farm facility, located along Interstate 5, is the largest beef production facility in California and can produce 150 million pounds of beef annually as seen on May 31. May 2021, near Harris Ranch, California.
Rose George | beautiful pictures
Robert Kleinberg, a researcher at Columbia University’s Center for Global Energy Policy, said the methane emitted by the oil and gas industry each year would be worth about $2 billion if it were used to generate electricity. or house heating.
“Reducing methane emissions is the fastest way to control climate change,” said Kleinberg. Congress recognized this when it passed the IRA. “The methane charge is a draconian tax on methane emitted by the oil and gas industry from 2024 onwards.”
In addition to the methane IRA provision, this year’s Biden Department of the Interior proposed rules to limit methane leaks from drilling operationswhich it says will generate $39.8 million a year in royalties for the United States and prevent billions of cubic feet of gas from being wasted through venting, burning and leaks.
Promote clean energy production
The bill provides $60 billion for clean energy production, including $30 billion in manufacturing tax credits to accelerate domestic production of solar panels, wind turbines, batteries and key mineral processing, and a $10 billion investment tax credit for manufacturing facilities that are building electric vehicles and clean energy technology.
There is also $27 billion available for a green bank called the Greenhouse Emissions Reduction Fund, which will provide funding to deploy clean energy across the country, but especially in overcrowded communities. And the bill has a hydrogen production tax credit, providing hydrogen producers with a credit based on the climate properties of their production methods.
Solar panels are installed on a solar farm at the University of California, Merced, in Merced, California, August 17, 2022.
Nathan Frandino | Reuters
Emily Kent, US director for zero-carbon fuels at the Clean Air Task Force, a global climate nonprofit, said the bill’s support for low-emissions hydrogen is exceptional. It is notable because it can solve areas such as heavy transportation and heavy industry, which are difficult problems. to decarbonize.
“US climate policy has taken an important step towards zero-carbon fuels in the United States and globally this year,” Kent said. “We look forward to seeing the impact of these policies materialize as the hydrogen tax credit, coupled with the hydrogen-centric program, accelerates the creation of a global market for zero-carbon fuels.”
The clean energy production provisions in the IRA will also have important implications for climate startups and the large venture capital firms that back them. Carmichael Roberts, head of investment at Breakthrough Energy Ventures, says climate initiatives under IRAs will give private investors more confidence in the climate space and could even lead to the establishment of up to 1,000 companies.
“Everybody wants to be a part of this,” Roberts told CNBC after passing the bill in August. Even before the measure was passed, “there was a big wave around climate,” he said.
Invest in communities burdened by pollution
The Act invests more than $60 billion to address the unequal impacts of pollution and climate change on low-income communities and communities of color. This funding includes grants for zero-emissions technology and vehicles, and will help clean up Superfund sites, improve air quality monitoring, and provide funds for initiatives. community-led through Climate and Environmental Justice block grants.
Smoke billows over the Oakland-San Francisco Bay Bridge in San Francisco, California, U.S., on Wednesday, September 9, 2020. Strong, dry winds are sweeping Northern California for a third day, increasing the risk Wildfires in the area have been ravaged by heat waves, peculiar thunder storms and dangerously poor air quality due to the fires.
Bloomberg | Bloomberg | beautiful pictures
The study was published in the journal Environmental Science and Technology Letters establish that communities of color are systematically exposed to higher levels of air pollution than white communities due to federal housing discrimination. Black Americans are also 75% more likely to live near hazardous waste facilities than white Americans, and three times more likely to die from exposure to pollutants. based on Clean Air Task Force.
Biden signed an executive order after taking office that prioritizes environmental justice and helps reduce pollution in marginalized communities. The administration established the Justice40 Initiative to bring 40% of the benefits of federal investments in climate change and clean energy to disadvantaged communities.
More recently, the EPA in September established an office focused on assisting and transferring IRA grants to these communities.
cut emissions ag
The deal includes $20 billion for programs to cut emissions from the agricultural sector, which accounts for more than 10% of U.S. emissions, according to EPA estimates.
the president has commitment to reduce emissions The agricultural sector is halved by 2030. The IRA funds conservation agriculture activities that directly improve soil carbon, as well as projects that help protect forests that are susceptible to wildfire.
Farmer Roger Hadley harvests corn from his field in his John Deere compound in this aerial photo in Woodburn, Indiana.
Bangguan | Reuters
