Senate bill passage hailed as 'milestone' for climate fight. Here's what you need to know.

·6 min read

Following decades of disappointment, environmental activists celebrated Sunday's narrow vote in the U.S. Senate for the nation's biggest investment, by far, in the fight against climate change.

Should the the Inflation Reduction Act pass the House, possibly later this week, and receive President Joe Biden's signature as expected, it would devote $369 billion toward efforts to reduce the country's greenhouse gas emissions and mitigate climate change.

Multiple scientific models show it should cut U.S. greenhouse gas emissions by about 40% by 2030, leaving the nation within striking distance of national and international goals to reduce emissions 50% by that year.

“If it (passes)... it will mark a true milestone in the United States," said Daniel Swain, a climate scientist at the University of California, Los Angeles. "It will be the first legislation in history that will clearly and tangibly reduce carbon emissions at a national scale.”

Senate Majority Leader Chuck Schumer, D-N.Y.,  celebrates after the Inflation Reduction Act passed the Senate on Sunday.
Senate Majority Leader Chuck Schumer, D-N.Y., celebrates after the Inflation Reduction Act passed the Senate on Sunday.

It’s a pivotal moment, added Mary Anne Hitt, a longtime climate activist who spent decades fighting to close coal-fired power plants and whose thoughts turned to her daughter.

“I just want to run and tell her that we’re one step closer to doing what we need to do to ensure she has a safe future,” said Hitt, now senior director at Climate Imperative, a climate change nonprofit.

Heather Zichal, CEO of the American Clean Power Association, called the bill's tens of billions of dollars in renewable energy investment “a generational opportunity for clean energy after years of uncertainty and delay.”

The bill's focus on expanding the U.S. domestic manufacturing base will be unprecedented, she added. “This is the vote heard around the world. It puts America on a path to creating 550,000 new clean energy jobs while reducing economy-wide emissions 40% by 2030.”

What does the bill do?

Experts say the bill could transform the American transportation and power sectors, which are the nation's largest contributors of greenhouse gases, at 27% and 25% respectively, according to the Environmental Protection Agency.

Tens of billions of dollars would go toward supporting renewable energy development, lowering the costs of electric vehicles, building out public charging stations, weatherizing homes, plugging leaks of greenhouse gases from pipelines and wells, lowering emissions from the agricultural sector, and supporting communities near polluting industries.

A more detailed summary highlights billion-dollar line items:

  • More than $60 billion to support U.S. clean energy manufacturing, including $30 billion in incentives for wind, solar and battery production. It also includes $10 billion in tax credits for the construction of facilities that make electric cars and renewable energy technologies and $2 billion in grants to “retool” existing car factories for electric vehicles.

  • Another $60 billion to invest in low-income communities that bear a disproportionate burden of pollution, including money to reduce pollution from factories and ports and purchase cleaner public transportation vehicles.

  • $30 billion in grants and loans to states and electric utilities to help them transition to cleaner forms of electricity.

  • $27 billion for a clean energy technology accelerator to “support deployment of technologies to reduce emissions, especially in disadvantaged communities.”

  • More than $20 billion in investments to support agricultural practices that reduce emissions.

Many of these activities require no action by the average American family, experts say, as industries, companies, and governments use the incentives to boost the use of renewables behind the scenes.

But the bill does come laden with tens of billions of dollars in consumer rebates and tax incentives on newer technologies.

It would continue a $7,500 tax credit for purchasers of new electric vehicles, with no manufacturer caps, and create a $4,000 tax credit to purchase a used electric vehicle. It also restores a tax deduction for home solar panel installation up to 30% of project costs, continuing through 2032.

In addition, the bill provides about $9 billion in tax incentives and rebates for owners to make their homes more energy-efficient. That includes 10 years of funding to help offset the costs of installing insulation, electric stoves and water heaters, efficient HVAC technologies like heat pumps, electric panel upgrades, and other home improvements.

The bill will “enable major efficiency and electrification upgrades in millions of homes and buildings to save energy and improve comfort and health, especially for low- and moderate-income households,” the American Council for an Energy-Efficient Economy wrote in a statement.

George and Sarah Ann Panitsidis are building a home in Spencerport that will be heated with Geothermal energy.
George and Sarah Ann Panitsidis are building a home in Spencerport that will be heated with Geothermal energy.

What about the oil and gas leases?

A provision in the Inflation Reduction Act requires that three canceled oil and gas lease sales in the Gulf of Mexico and Alaska's Cook Inlet be reinstated. In addition, permits for solar and wind projects on federal lands and water would be allowed only if lease sales for oil and gas drilling are also held.

While this compromise sweetened the deal for oil- and gas-producing states – while angering many environmentalists – it still wouldn't significantly affect the positive climate effects of the act, according to an analysis by Energy Innovation, a climate policy research firm.

For every additional ton of greenhouse gas emissions caused by the oil and gas leases, at least 24 tons of emissions would be avoided by the act's other provisions, it estimates.

Where would this leave U.S. on climate goals?

Even before the bill's passage, U.S. greenhouse gas emissions were already declining. Researchers say the bill will accelerate that trend, but they caution that to what extent depends on further action.

Without the bill, models predict emissions would have fallen fall 24% below 2005 levels within the next eight years.

That's partly a result of already-scheduled retirements of coal-fired power plants, an increase in the use of natural gas, the rapid fall in prices for wind and solar energy and the increasing adoption of electric vehicles by American drivers.

With the bill, the U.S. would reduce emission by 31% to  44% from 2005 levels, according to various estimates. The estimates depend in large part on how much U.S. emissions increase in the next eight years, which in turn depend on future fossil fuel prices, economic growth and technology costs.

Ultimately, the U.S. must get to 50% to achieve international climate goals of keeping global warming to no more than 2.7 degrees Fahrenheit.

Some experts say that would likely require President Joe Biden and states to make use of executive actions and stronger regulations. That would balance out the new bill's suite of carrot-like incentives with regulatory sticks.

There also may be a "flywheel effect," with small technological gains building on one another over time to create a self-sustaining momentum. Just as government investment in oil and gas allowed for the fossil fuel booms of the 20th century, and investment in wind and solar made possible the rapid drop in price in the past two decades, the millions for investment and research in the climate bill could launch the U.S. into a new, cleaner and wealthier era.

This article originally appeared on USA TODAY: Senate bill on climate change sets U.S. on path to meet emissions goal