New Federal Legislation a Big Win for Reducing Greenhouse Gas Emissions
By SCCF Environmental Policy Staff
On Aug. 16, President Biden signed into law a bill that is being heralded as a landmark piece of climate legislation. The Inflation Reduction Act is a massive reconciliation bill that aims to decrease inflation, boost government revenue, curb greenhouse gas emissions, and help transition the country to renewable energy sources. The bill is expected to reduce the deficit by over $300 billion, mainly through mandating a 15% minimum corporate tax, reforming prescription drug pricing, adding additional enforcement capabilities at the IRS, and a 1% stock buyback fee. The Act attempts to take on many massive issues facing the United States, so it is appropriate that it represents the largest effort to date on the part of the U.S. government to address climate change.
The central environmental claim tied to the passage of the Inflation Reduction Act is that it will massively reduce the United States’ greenhouse gas emissions. The act mainly aims to help curb emissions by providing provisions that are beneficial to both corporations and individuals looking to decrease their carbon footprint and help the transition to renewables. It does this through funding for grant programs, tax credits, and other incentives that make it easier for businesses and homeowners to adopt energy efficient and clean energy technologies that decrease their own carbon usage. Some of the provisions extend versions of pre-existing tax credits that incentivize choices like adopting renewable energy sources including solar, and purchasing electric vehicles. For example, the Residential Clean Energy Credit will allow homeowners who install solar options in their home for heating, electricity generation, and other purposes over the next decade to claim 30% of the associated costs as a tax credit. For businesses, the Inflation Reduction Act provides subsidies and investments in companies that will increase production of windmills and solar panels and invests $60 billion in the creation of domestic jobs within the energy sector.
The bill is not without its concessions to the fossil fuel industry, including rekindling the sale of four previously stalled oil leases in Alaska and the Gulf of Mexico. Leases for wind and solar options on public lands are tied to offering gas and oil leases first. However, even with the granting of additional leases, several groups have modeled the potential of the bill to cut greenhouse gases, and their results suggest the Act’s provisions would help the United States reduce emissions on the order of 40% by 2030. The current administration’s goal is a 50% reduction by 2030, and this legislation helps the U.S. continue to make progress towards that target.
This bill is a great start to responding to the atmospheric changes we are witnessing, and will hopefully set the U.S. on a path to reduce emissions and counteract some of the current climate emergency. More actions will be necessary, but for now, we can celebrate a win that will hopefully be the first of many.
Stay tuned for further analysis on the Inflation Reduction Act and what it could mean for Floridians.