Clean Energy Insights

A climate-ish bill passed — now what?

6 minute read

As featured in the Hill

The Inflation Reduction Act, which recently passed in the Senate, was years in the making. Not just the last two years, or since the Waxman-Markey bill failed to pass the Senate in 2009. This bill has been waiting for its day in the sun since 1965 when President Lyndon Johnson’s science advisers first informed our government about the catastrophic risks of climate change.

Finally, Democratic holdouts Sen. Joe Manchin (D-W.Va.) and Sen. Kyrsten Sinema (D-Ariz.) agreed to a whittled-down package — from what was originally a $6-trillion budget reconciliation package to $2 trillion and ultimately $369 billion — which the Senate passed on Sunday.

This bill, if it passes the House this week, will be the largest clean energy and climate investment our government has ever made. And that is a huge win and an important milestone — not just in America, but for the signal that it sends around the world.

This bill was by no means assured. Just days before a deal was struck between Manchin and Senate Majority Leader Chuck Schumer (D-N.Y.), it seemed like Manchin had killed the possibility of climate action completely. If a deal was not struck, and Democrats lost congressional seats in the midterms, it would have meant that we missed the last best chance we had to stave off the climate crisis.

However, it’s also a moment for reflection with many unanswered and frustrating questions: Why did it take over 50 years for our federal government to direct a tiny smidgen of our tax dollars to ameliorate the worst crisis humanity has ever faced? (At only $37 billion a year for climate compared to $800 billion a year for the Pentagon.) How did one or two Democratic senators hold up action for so long? Why is Exxon Mobil CEO Darren Woods reportedly “happy that oil and gas feature prominently in the bill” as drafted by the Senate? Why did this historic deal fail to deliver on environmental justice and protect frontline communities?

Most importantly: Where do we go from here?

The wins

It is estimated that the bill will reduce carbon emissions by 42 percent by 2030, just shy of the 50 percent goal set by President Biden. It will also create 9 million new jobs while cutting costs. Win, win, win.

The biggest win? Momentum. This bill is a shot in the arm for the clean energy industry whose declining costs are exponential, not linear. The sooner we invest in the sector, the faster the costs come down, the faster adoption rates increase, accelerating the death knell of the fossil fuel industry. The bill does just that in three critical areas, among others: clean energy, building electrification and electric transport.

Here are a few particularly neat provisions of the bill:

  • The solar investment tax credit was increased to 30 percent and extended through 2032 (The bill also includes the ability to sell tax credits if you can’t use them yourself and allows direct payments in lieu of tax credits for non-tax paying entities including nonprofits and municipalities.)
  • Additional tax credit benefits for low-income communities, tribal lands, brownfields and places with high fossil fuel employment
  • Incentives for solar developers to use domestic materials and pay prevailing wages
  • Rebates and tax credits for electric heat pumps, efficiency retrofits and electric vehicles
  • Investments to increase domestic clean energy manufacturing
  • Increased funding explicitly to support the Environmental Protection Agency (EPA) in regulating greenhouse gas emissions

The losses

Manchin is notably the largest recipient of fossil fuel money in the Senate and personally vested in the coal industry. So, while it’s infuriating and depressing, it’s not surprising that the fossil fuel lobby’s man on the inside apparently got them what they wanted.

Among the more egregious concessions, the bill requires the Department of the Interior to offer 60 million acres for oil and gas leasing in federal waters in the year prior to any offshore wind developments and 2 million acres on federal lands in order to permit wind or solar projects.

Yes, you read that right. The fossil fuel industry is holding our government hostage. In order to invest in the energy technology of today, we have to continue to pay off the energy barons of the past. It’s unconscionable. Not to mention the side deal Manchin secured to expedite approval of dirty energy projects like the Mountain Valley pipeline in West Virginia.

These fossil fuel concessions, which The New Republic’s Kate Aronoff described as “a deal with the devil,”  are fundamentally a stab in the back of the climate justice movement that helped elect Biden and a Democratic majority in Congress.

In an eloquent, heartbreaking essay, New York Lawyers for the Public Interest’s Anthony Rogers-Wright describes the failures of this legislation to deliver on climate justice noting, “too many historically white-led ‘environmental’ organizations acted prematurely rhapsodic and released statements … of ‘victory’ before speaking to environmental justice communities … who will be most and directly impacted by the fossil fuel, false solutions, increased mining, and other extractive provisions.”

So, where do we go from here?

Despite the deeply flawed process and outcome, the bill has sent an important signal to the nations and financial markets of the world. The United States is done sitting on the sidelines. We’re not going to let this defining chapter in the climate fight be waged without us.

The climate movement should celebrate its successes, but also learn from its mistakes. We must build more inclusive coalitions that raise up the voices of the most vulnerable among us — while continuing to fight every oil and gas permit, pipeline and investment. We must push Biden to use executive authority to get us the rest of the way to our emissions goals. And we must use the investment dollars from this bill to build equitable clean energy solutions in our communities. If we’re successful, history will look back at this moment as a pivotal first step toward creating a more sustainable and just future.

Andreas Karelas is the author of “Climate Courage: How Tackling Climate Change Can Build Community, Transform the Economy, and Bridge the Political Divide in America.” He is also the founder and executive director of RE-volv, a nonprofit climate justice organization that helps fellow nonprofits across the country go solar. Follow him on Twitter: @AndreasKarelas

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