The Inflation Reduction Act- A Brief Overview on its Promise to Combat Climate Change
Hanaã Obeidat
Hearing the words “Inflation Reduction Act” does not necessarily trigger thoughts of environmental legislation nor efforts of reducing the negative impacts of climate change. However, not only does President Biden’s Inflation Reduction Act (“the Act”) combat inflation and lower healthcare costs, it also heavily invests in clean energy. In fact, Congress has never passed such expansive investments in combatting climate change. The Act seeks to delegate funds that will invest in clean energy, allowing the United States to return to its leadership role as a major player in combatting against climate change. After dissecting the Act, it is clear the resources made available to battle against climate change are quite impressive. The Act seeks to fight climate change through tax credits and other incentives. Though new, the law’s efforts seem promising in a national battle against the negative impacts of climate change.
The Act is still new, as it was recently passed in August of 2022. $369 billion is being invested through the Act and aims at a 40% emissions reduction in the United States by 2030. So, how exactly does the Act help achieve such a large emissions reduction? For starters, it will expand accessibility through making clean energy tax credits more obtainable and extends them by a decade. It also increases jobs in the clean energy and clean technology sectors. Perhaps most importantly, it focuses heavily on accessibility to engaging in clean energy use by providing funding to low-income households so that they may engage in energy rebate programs, to which the Act dedicates $9 billion. Overall, the Act purports to make combatting climate change more inclusive and provides more opportunity to individuals and households to engage in eco-friendly practices, such as investing in solar power, when such households may not have had the finances to do so in the past.
On the topic of accessibility, the Act also interacts with issues of environmental justice. This is quite major, as some critics of American environmental legislation argue there has been a heavy lack of legislation supporting victims of environmental justice issues. Communities that are disproportionately impacted by environmental hazards and climate change will receive funding in this bill, as $315.5 million will be invested in air monitoring for disproportionately impacted communities living in areas with heavy air pollution and $3 billion will be invested in community-led efforts to combat against pollution. The Act has the potential to cut social cuts of climate change by up to $1.9 trillion by 2050.
Though the Act seems like a dream for proponents of battling climate change, it does not come without critique. Critics of the Act worry it will undermine the competitive nature of industry in the U.S. through increases of taxes on American manufacturers. Generally, more right-leaning opposition to the law cites worries of an increase, rather than decrease, in overall national inflation as the Act pours more money into the economy. It appears a majority of concerns surrounding the Act are economic in nature. Though economic concerns surrounding the Act are present, its true effects will not become apparent for some time.
This new law has excited many who support the global fight against climate change. The Act’s strong efforts to combat climate change, perhaps shocking to find in a law that aims to reduce inflation, show signs of the Biden Administration’s commitment to a resurgence in its commitment to reduce global emissions in the post-Trump era. The law itself is arguably revolutionary in nature for the clean energy sector, environmental justice, and the like. Though extremely promising, how quickly change may be seen and what positive impacts arise because of the bill will only be seen in due time.