Congress passed the biggest climate package in US history. For you, it means cheap energy, clean air, and jobs.
- Congress passed the Inflation Reduction Act on Friday, sending it to President Joe Biden to sign into law.
- The bill includes a $369 billion climate package that Sen. Chuck Schumer and Joe Manchin agreed to.
Congress just passed the most significant climate bill in US history, paving the way for cheaper energy and a more livable planet.
On Friday, the House approved the Inflation Reduction Act, clearing the bill's last obstacle in Congress and sending it to President Joe Biden's desk for him to sign into law. The plan doles out about $369 billion for climate programs, aiming to expand renewable energy such as solar, wind, and cleaner fuels, while making it less expensive to buy electric vehicles and home appliances.
The act is more than a year and a half in the making. In its final weeks, it wasn't clear if its climate plan would survive, as Democratic holdouts Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona prevented the party unity required to get the package through Congress. But Democrats quickly united to pass the bill after Manchin and Majority Leader Chuck Schumer struck a surprise deal on July 27.
Experts say the new climate plan also promises savings, health boons, and higher quality of living for everyday people across the US.
"This isn't about the sky, or the polar bears," Jonathan Foley, executive director of Project Drawdown, a climate nonprofit, told Insider, adding, "This is about you and your pocketbook, your jobs, the air your kids breathe, the town you live in, our national security."
Here are five ways the new climate-change package could make your life better:
Lower energy bills
The new climate plan includes about $30 billion in loans and grants for states and electric utilities to adopt more renewable energy, plus more than $60 billion in tax credits for manufacturers of solar panels, wind turbines, batteries for electric vehicles, energy storage, and other technology, according to a summary from Senate Democrats.
Solar and wind already generated cheaper electricity than fossil fuels, even before oil and gas prices soared this year. Yet they still only account for about 20% of US energy use. The Inflation Reduction Act could speed up a shift away from fossil fuels and also make it less expensive to hook up your home with electric.
A total of $9 billion in home energy rebates goes to helping Americans insulate their homes and replace stoves, furnaces, water heaters, and other appliances with electric alternatives. Homeowners can deduct up to 30% of installation costs from their taxes. A similar deduction for solar is guaranteed for homeowners and expanded to residential battery storage.
"This is really about delivering lower energy bills for everyday Americans," Leah Stokes, an environment and energy politics professor at University of California, Santa Barbara, said in a press briefing on July 28. She noted that high oil and gas prices are a major driver of inflation that ripples across every industry, from transportation to manufacturing to agriculture.
"When fossil fuels go up, other goods and services go up," Stokes said.
The average household could save $1,800 on their energy bill each year by installing a modern electric heat pump and rooftop solar and buying an electric vehicle, according to an analysis by Rewiring America, a think tank that promotes electrification.
Cheaper electric vehicles
The bill extends an existing $7,500 tax credit for new EVs — offered as a discount at the point of sale — and offers up to $4,000 for used EVs and plug-in hybrids.
It also lifts the cap on the number of tax breaks automakers can offer, benefiting companies like Tesla, General Motors, and Toyota that already hit the limit, as long as the vehicle is assembled in the US.
"Once people own an electric car, they're going to laugh every time they drive by a gas station, when they see $5 a gallon," Foley said, adding, "I think this will help us reach a tipping point, where five to 10 years from now you won't see gas cars sold anymore, or very few."
There are some caveats, like your income, the vehicle's price tag, and where its parts are made.
If you earn $150,000 or more a year, or $300,000 in joint family income, you won't qualify for the new car tax credit. There's a limit on the price of the car, too. Bigger vehicles, such as SUVs and pickup trucks, must cost less than $80,000, and smaller cars less than $55,000, to qualify for the credit.
For used cars, the income limit is $75,000 for single tax filers and $150,000 for joint filers. The sticker price must be $25,000 or below.
The bill also requires vehicle batteries to be made with 40% of minerals extracted or processed in countries the US has a free trade agreement with, or recycled in North America. But supply chains for those minerals don't exist yet, E&E News reported. The majority of lithium, cobalt, nickel, and other minerals used in EV batteries come from China, Russia, and the Democratic Republic of Congo, although analysts told E&E News they hope the mandate spurs a made-in-America market.
Cleaner air to breathe
With fewer gas-guzzling cars on the road, and fewer industrial sites powered by fossil fuels, air would be cleaner and safer to breathe.
"These sorts of climate measures could also reduce particulate matter or ozone smog, as kind of a side benefit that would directly, immediately improve health," Scot Miller, an assistant professor of environmental health and engineering at Johns Hopkins, told Insider.
That drop in air pollution could prevent up to 3,900 premature deaths and 100,000 asthma attacks by 2030, according to an analysis by the policy-research firm Energy Innovation LLC.
The American Lung Association pointed to those clean air and health gains in a statement on July 28, urging Congress to "move swiftly" and "without delay" to pass the new bill into law.
The bill also includes provisions to fund cleanup of dangerous pollution sites, which are disproportionately concentrated in low-income communities of color.
The investment is "probably not enough, but it's more than we've ever spent before," Foley said.
Jobs, jobs, jobs
By investing about $60 billion in manufacturing — everything from heat pumps to wind turbines — this climate plan could help keep clean-energy companies in the US, securing "good paying, and hopefully union, jobs," Stokes said.
It's not just manufacturing. Renewable-energy infrastructure needs to be installed and maintained. The bill funds new electricity-transmission lines, offshore wind projects, housing retrofits, renewable-energy projects in rural areas, and repurposing or replacing defunct energy infrastructure.
All that work requires workers. The new climate plan would create up to 1.5 million jobs by 2030, according to the Energy Innovation analysis.
The bill also focuses on communities historically associated with oil, gas, and coal extraction, by providing a tax incentive for companies that create renewable-energy jobs in those places.
Protection from extreme weather
Climate change is making droughts, floods, wildfires, and heat waves more severe and more frequent. These weather events cause serious damage to human property and infrastructure and cost lives.
The bill provides funding for communities to mitigate the health effects of extreme heat, to prevent and respond to wildfires, and to prepare for coastal climate impacts like severe hurricanes and flooding from sea-level rise. It now includes billions of dollars to fight droughts, a request Sinema made before giving her approval, according to The New York Times.
The bill also gives the National Oceanic and Atmospheric Administration (NOAA) a funding boost for forecasting and research.
While the new funds would help communities adapt to extreme events, the bill could also help prevent weather from getting even more extreme. If the world cuts emissions enough to keep global warming below 2 degrees Celsius, that could prevent a significant acceleration in the severity and coverage area of extreme weather.
"I think everyone I work with in the emissions community is sort of holding their breath and hoping that this [bill] goes through," Miller said.
This story has been updated with new information. It was originally published on August 3, 2022.
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