The latest Inflation Reduction Act could potentially reduce America's carbon emission 40% lower than 2005 levels by the end of the decade, according to scientists.
The Inflation Reduction Act, signed by President Joe Biden on August 16, 2022, is acknowledged to be the federal government's biggest financial commitment toward climate change action. The legislation is allocating nearly $400 billion to decrease carbon emissions to 40% lower than 2005 levels by 2030. The fund will direct to clean energy initiatives such as electric vehicles, tax credits, and tax breaks for energy companies that produce green energy. The latest act differs significantly from previous government climate plans. It is not only the increased emphasis on encouraging vital decarbonization technology, but also the explicit push to invest in communities that are yet not equipped enough to fight climate change.
What is the expected impact of the bill?
The United States' transition to renewable energy is currently in motion and the financial support from the bill will help hasten it.
- The $370 billion investment in a low-carbon economy will be incentivized through various measures including prescription drug savings and a 15% minimum tax on large firms making $1 billion or more. It will help consumers save money on energy, while also improving the country's energy supplies by lowering dependence on expensive, imported fossil fuels.
- The bill includes $60 billion for expanding renewable energy infrastructures such as solar panels and wind turbines. Further, tax breaks for nuclear power, electric vehicles, and energy efficiency.
- The Inflation Reduction Act will aid the nation in its continued transition to sustainable energy by offering incentives for energy-efficient home appliances and tax credits for electric cars and rooftop solar to the people.
- The goal set to achieve is 2,300 grid-scale battery facilities, 950 million solar panels, 120,000 wind turbines, and other large-scale renewable energy generators by 2030.
- Additionally, funds are also allocated for the preservation of forests, wetlands, and the habitats of threatened and endangered animals.
Although the Inflation Reduction Act will help the United States get closer to achieving Biden's 2030 carbon reduction targets, will the proposal effectively control the troubles caused by the intense price surges? Economic assessments indicate that it may take some time as the legislation does not specifically address some of the major causes of price hikes, including gas prices, rent, and food, among other things. Nonetheless, the law has its positive sides such as lowered prescription medications cost, extending health insurance subsidies, and decreased energy prices. It may also reduce the country’s budget deficit marginally, potentially lowering inflation by 2030.
Like any other legislation, the Inflation Reduction Act is not without flaws. The plan is a far more condensed version of what was originally proposed. Parts of the measure are antithetical to climate goals, specifically boosting oil and gas lease sales on public lands and waters.
But at the end of the day, the bill deserves applause— the bill is imperative for the U.S. to timely advance toward its goal of achieving net-zero emissions by 2050.
"This bill is far from perfect. It's a compromise. But it's often how progress is made," said Joe Biden, 46th and current president of the United States. "My message to Congress is this— this is the strongest bill you can pass.”