The most comprehensive climate bill ever passed in the United States, the Inflation Reduction Act (IRA), became law last month. It will not only bring great opportunities to the doorsteps of Americans all around the country, but it will also assist promote essential climate action.
The new legislation includes numerous laws designed to combat the climate problem, enhance air quality, and ensure that all communities may make use of sustainable energy in their homes and neighbourhoods. For the environment and for humanity, the passage of this national legislation is a watershed moment. It is the first piece of legislation to prioritise the needs of underserved populations while also reducing greenhouse gas emissions by nearly 1 billion metric tonnes by 2030.
Communities with low incomes and communities of colour have long borne the brunt of the poor health effects of pollution. Up to 3,900 premature deaths and up to 100,000 asthma attacks per year could be avoided by 2030 as a result of the bill’s provisions on the widespread deployment of sustainable energy during the following decade.
One important part of the package that will spur sustainable energy generation is tax credits. Available for the next decade, they will help local economies, create good jobs, lessen air and water pollution, and lower energy bills for households. Recent studies estimate that tax credits for the power industry provided by the IRA might reduce electricity costs by as much as $278 billion, saving the typical American family $220 per year.
These credits are different from their predecessors in that they are paid directly to non-taxpaying entities like states, tribes, municipal utilities, and rural electric cooperatives. This gives these organisations more leeway to drive clean energy projects in their communities without having to engage in convoluted financing structures. This is crucial because it allows for more of the federal funding to be spent on “steel in the ground” in areas where it is most desperately needed.
New, high-paying employment will be created, and we’ll be able to invest in the next generation of workers thanks to the five-fold increase in tax benefits for projects that adhere to prevailing wage and apprenticeship regulations. It is expected that the IRA will generate about 1 million new jobs by 2030. Low-income towns, communities that have suffered environmental injustice in the past, and communities that stand to lose jobs or money as a result of the energy transition are all given bonuses to encourage them to invest in clean energy projects.
Grants can be used for anything from lowering pollution in low-income and communities of colour to expanding public transportation and reuniting neighbourhoods split apart by freeway construction. This gives communities a powerful voice in crafting solutions to environmental justice issues. Additionally, a $27 billion clean energy technology accelerator, sometimes known as a “green bank,” will invest in state and local financial institutions to speed up the rollout of clean technologies and attract private sector funding, with special attention paid to projects in low-income areas.
Households can take advantage of new tax credits and rebates for clean energy technologies and energy efficiency upgrades (such as heat pumps, electric vehicles, solar panels, electric ovens, induction stoves, and more) that will help them save money while contributing to the community efforts to combat climate change and pollution. More than 200 municipalities have committed to achieving 100% renewable energy by a certain date, and these residential incentives will be crucial in getting people to take action at the household level to achieve this. Consumers who take advantage of discounts on heat pumps, water heaters, electric vehicles, and solar panels can save as much as $1,800 annually.
The question then becomes how local governments may best utilise these federal programmes to further equity. There are several active technical support initiatives that communities can take advantage of rather than trying to figure things out on their own. In order to better understand the difficulties, needs, and goals of marginalised groups, they can arrange listening sessions.
By having these discussions, the local government will be able to develop a workable strategy that gives top priority to initiatives that have the support of the community. Also, cities that are new to these initiatives might gain insight from those who have been successfully allocating funds to climate and energy projects in economically depressed areas.
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The IRA is expected to make it possible for the United States to achieve its goal of halving emissions by 2030. Economic, health, and climate benefits for all people, particularly the most vulnerable, are now closer than they have been in years thanks to this new law. We can jumpstart a better tomorrow by seizing the present moment and making the most of the plethora of fresh options now available to us.
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