Inflation Reduction Act

The recently proposed Inflation Reduction Act contains tax credits that boost adoption of medium- and heavy-duty electric vehicles.

The US senate is set to pass the Inflation Reduction Act of 2022, which would include the largest climate spending package in US history.

The Senate is set to begin debate on the bill on Saturday if it passes review by the Senate parliamentarian. The bill also requires the Department of the Interior to sell leases for oil and gas drilling in the Gulf of Mexico and off the coast of Alaska. “The bill is a hostage situation,” says Jean Su at the Center for Biological Diversity, a US environmental advocacy group. On the electricity generation side, the bill contains $30 billion in grants and establishes tax credits for states and electric utilities to adopt clean energy and energy storage, which is key for maintaining the stability of the grid with higher levels of intermittent renewable sources. The Senate is expected to begin debate on the legislation on Saturday. Here are some of the things it contains and what it could mean for climate change. The US Postal Service – the largest source of federal emissions second to the US military – gets $3 billion to buy zero-emission vehicles. In addition to spending on health care, $369 billion is marked for energy and climate change priorities.

The Inflation Reduction Act, introduced in the U.S. Senate in late July of 2022, contains $369 billion in investments to boost clean energy and curb…

The bill could head to the Senate floor for a vote as early as this weekend and would require the support of all 50 Senate Democrats to pass under budget reconciliation rules. In an important departure from that system, the new bill would allow developers to sell their tax credits to unrelated third parties for cash. “That creates a positive feedback loop.” But the federal and state agencies involved will “need to design the program rules and programs in a way that’s healthy and sustainable for the market,” he said. As Canary Media’s Jeff St. John recently explained, “This could offer solar projects a potentially more lucrative tax credit value, since the cost of solar projects is declining compared to the value of the electricity they will produce over time.” That will allow manufacturers to “realize the full value” of those credits in a more streamlined way than if they were required to set up the structures for monetizing tax credits that have been developed by the wind and solar industries over the past two decades, he said. Could heat-pump manufacturers and efficiency contractors meet the demand expected to arise in response to a big jolt of federal funding? Another $20 billion would be targeted at reducing emissions in agricultural operations, and rules to limit methane emissions from oil and gas wells and pipelines could not only reduce a major source of global warming emissions but also ease the burden faced by communities facing the health impacts of that pollution. But it would lift the existing cap that limits tax credits for individual automakers’ vehicles once that automaker has sold more than 200,000 EVs — a cap that Tesla and GM have already reached, and Ford and other automakers expect to reach soon. That’s a major change from existing tax credit policy passed by Congress in late 2020, which set the ITC for solar projects on a declining path from 2022 to 2025 and allowed the PTC for wind projects to expire by the end of 2021. This could offer solar projects a potentially more lucrative tax credit value, since the cost of solar projects is declining compared to the value of the electricity they will produce over time. In that light, the new bill’s provisions are an “11th-hour reprieve for climate action and clean energy jobs,” said Heather Zichal, CEO of the American Clean Power Association trade group, in a Wednesday statement. But it does direct tens of billions of dollars toward extending tax credits to the deployment and manufacturing of a long list of technologies, including wind and solar power, batteries, nuclear power, hydrogen production, electric vehicles, heat pumps and emissions-reduction systems.

The Senate is expected to pass the Inflation Reduction Act of 2022 through a budget reconciliation process this weekend.

The climate provisions would also provide consumer tax credits for "home energy efficiency improvements" and for the purchase of clean vehicles. "We remain skeptical and will be reviewing the revised legislation carefully," National Association of Manufacturers President and CEO Jay Timmons said in a statement. In fact, the clean energy tax credits and the expanded premium tax credit will cut taxes for millions of Americans," Treasury Secretary Janet Yellen wrote in a letter to congressional leadership. Once the Senate votes to begin debate on the bill, lawmakers will have the opportunity to offer an unlimited number of amendments, a cumbersome and time-consuming process. Proposed changes to depreciation policies had some Republicans concerned that the IRA would disproportionately hit manufactures. "Subject to the Parliamentarian's review, I'll move forward." Together, the climate and ACA provisions would cost the government roughly $433 billion, and Democrats plan to put at least $300 billion of that toward deficit reduction. So we had no choice," Schumer said during a press conference on Friday. If all Democrats stick together, they'll be able to clear the hefty legislative package by their razor-thin majority and avoid a Republican threat of a filibuster. After reviewing the legislation, Sinema on Thursday evening offered her essential but still conditional support for the bill. I don't think any Republicans are going to support it. I'm not going to support it.

Gov. Wolf thanked President Biden and Congressional Democrats for introducing the Inflation Reduction Act and urged Congress to pass the bill.

“A vote for the Inflation Reduction Act is a vote to lower costs for the American family. As we approach a crucial tipping point for our world, the Inflation Reduction Act will put America on the path to reduce emissions by nearly 40% by 2030 at the same time that it will add clean energy jobs and improve American energy security. “The Inflation Reduction Act will take pressure off of working families and provide more stability for our economy, right now.

The bill would dedicate $369 billion to energy and climate projects, increase tax credits for the purchase of electric vehicles to as much as $7500 ...

"When I look at the bill, it seems to be right in line with the things that Mainers care about. It's easy to get down about climate change, and I think that means we all can agree that that it's time to take some big steps forward," Dempsey said. U.S. Senate to begin debating Inflation Reduction Act. It includes billions to fight climate change