On August 16, 2022 President Biden signed “The Inflation Reduction Act,” – the latest iteration of what was once known as “Build Back Better.” This will be the largest climate spending package ever.
To pay for these costs, and other expenditures in the bill, (primarily focused on healthcare and prescription drug reforms) the package is projected to raise $739 billion of revenue in four ways:
- Prescription drug pricing reforms – projected to raise $288 billion.
- Implementing a 15% Minimum Corporate Tax – projected to raise $313 billion.
- Targeted closing of a carried interest tax loophole – projected to raise $14 billion.
- Expanded IRS tax enforcement – projected to raise $124 billion.
Below is a summary highlighting what is included in the package. It also targets clean energy and climate spending in five major areas with related expenditures as follows:
American Energy Security and Domestic Manufacturing offering funding, programs, and incentives to accelerate the transition to a clean energy economy and will likely drive significant deployment of new clean electricity resources.
EXPENDITURES:
- $2 billion for National Labs to accelerate breakthrough energy research.
- $500 million in the Defense Production Act for heat pumps and critical minerals processing.
- Up to $20 billion in loans to build new clean vehicle manufacturing facilities across the country.
- $10 billion investment tax credit to build clean technology manufacturing facilities for technologies like electric vehicles, wind turbines and solar panels.
- $2 billion in grants to retool existing auto manufacturing facilities to manufacture clean vehicles. Production tax credits to accelerate U.S. manufacturing of solar panels, wind turbines, batteries, and critical minerals processing, estimated to invest $30 billion.
Decarbonize the Economy by changing the trajectory of greenhouse gas emissions in the US, and positioning it to become a global leader in the fight against climate change. This bill also creates more certainty for investments in clean energy production and low-carbon materials, and the act reduces the risks and costs of decarbonization. It unleashes the private sector to drive a dramatic reduction of US greenhouse gas emissions.
EXPENDITURES:
- $27 billion clean energy technology accelerator to support deployment of technologies to reduce emissions, especially in disadvantaged communities.
- Over $9 billion for Federal procurement of American-made clean technologies to create a stable market for clean products, including $3 billion for the U.S. Postal Service to purchase zero-emission vehicles.
- Tax credits for clean sources of electricity and energy storage and roughly $30 billion in targeted grant and loan programs for states and electric utilities to accelerate the transition to clean electricity.
- Grants and Tax Credits to Reduce Emissions from Industrial manufacturing – including almost $6 billion for a new Advanced Industrial Facilities Deployment Program to reduce emissions from energy intensive industrial and manufacturing facilities like chemical and cement plants.
- Advanced Industrial Facilities Deployment Program to reduce emissions from the largest industrial emitters like chemical, steel, and cement plants.
- A Methane Emissions Reduction Program to reduce the leaks from the production and distribution of natural gas.
- Tax credits and grants for clean fuels and clean commercial vehicles to reduce emissions from all parts of the transportation sector.
Farmers, Forestland Owners, and Resilient Rural Communities will be provided with financial assistance grants for projects that support underserved and small-acreage forest landowner participation in emerging private markets for climate mitigation and forest resilience.
EXPENDITURES:
- $2.6 billion in grants to conserve and restore coastal habitats and protect communities that depend on those habitats.
- $5 billion in grants to support healthy, fire resilient forests, forest conservation and urban tree planting.
- Tax credits and grants to support the domestic production of biofuels, and to build the infrastructure needed for sustainable aviation fuel and other biofuels. More than $20 billion to support climate-smart agriculture practices.
Invest in Communities and Environmental Justice to rebuild and restore units of the National Wildlife Refuge System and partnering State Wildlife Management Areas that have been affected by adverse weather events. The investment prioritizes projects that promote coastal resilience and climate adaptation, address invasive species threats, and provide for additional data collection needed to support successful natural resource resilience.
EXPENDITURES:
- The Environmental and Climate Justice Block Grants, funded at $3 billion, invest in community-led projects in disadvantage communities and community capacity building center.
- $1 billion for clean heavy-duty vehicles, like school and transit buses and garbage trucks.
- The Neighborhood Access and Equity Grants, funded at $3 billion, support neighborhood equity, safety, and affordable transportation access.
- Grants to Reduce Air Pollution at Ports, funded at $3 billion, support the purchase and installation of zero-emission equipment and technology.
Lower Consumer Energy Costs is available to U.S. households aiming to transition to cleaner energy consumption. Making these opportunities known to consumers and leveraging them to transform the country’s energy landscape will be critical to tackling climate change. Taking advantage of these credits will also yield significant cost savings for millions of Americans; create new high-paying jobs; and ensure a more secure and stable economy and environment.
EXPENDITURES:
- $1 billion grant program to make affordable housing more energy efficient.
- 10 years of consumer tax credits to make homes energy efficient and run on clean energy, making heat pumps, rooftop solar, electric HVAC and water heaters more affordable.
- $9 billion in consumer home energy rebate programs.
- $4,000 consumer tax credit for lower/middle income individuals to buy used electric vehicles, and up to $7,500 tax credit to buy new electric vehicles.
In summary, the Inflation Reduction Act of 2022 will make a historic down payment on deficit reduction to fight inflation, it lowers energy costs, increases cleaner production, invest in domestic energy production and manufacturing, and reduce carbon emissions by roughly 40 percent by 2030. Also, the act will finally allow Medicare to negotiate for prescription drug prices and extend the expanded Affordable Care Act program for three years through 2025.
Want to know more? Check out the Conservative National Network (CEN) for the latest news. (https://conservativeenergynetwork.org/).
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