US boosting climate action, Germany and Australia follow.
In a late July surprise action by senators (and the activists tirelessly nudging them), the Inflation Reduction Act puts the US back on track with the Paris Agreement Accords.
The most ambitious boost to climate action in U.S. history, the Inflation Reduction Act (IRA), passed the U.S. Senate on Sunday! Agreed among Democrats, the bill represents a turning point with potential to change the direction on climate action for the whole world. The IRA will create millions of new jobs, reduce energy bills, increase production of renewable energy and cut emissions in the U.S. by around 40% by 2030. So today we celebrate the hundreds of thousands of people who have organised, mobilised and pushed for this for decades, despite enormous and often seemingly insurmountable obstacles.
The $370B surprise bill dropped a goodie bag of climate tech provisions across a mix of direct investment, tax credits, and research funding – putting the US back on track to ~80% of the way to meeting our Paris obligations.
Key highlights include:
- $30B in production tax credits for solar panels, wind turbines, batteries, and critical minerals processing
- $10B investment tax credit to build clean technology manufacturing for electric vehicles, wind turbines, and solar panels
- $27B greenhouse gas reduction fund to accelerate climate technologies
- $500M in the Defense Production Act for heat pumps and critical minerals processing
- $900/ ton methane fee on oil and gas methane leaks ramping to $1,500/ ton by 2026 and $850m for funding methane monitoring and reduction
- $7,500 tax credit for new EVs and $4,000 for used EVs, plus tax credits for commercial EVs, EV charging, biodiesel and renewable diesel, and aviation fuel
- $20B to build new clean vehicle manufacturing facilities and $2B to retool existing auto plants to manufacture clean vehicles
- $3B for electrifying USPS delivery fleet
- $3B for zero-emission equipment and technology at ports
- $1B for zero-emission trucks and buses
? Built Environment
- $9B in consumer home energy rebate programs for home electrification and energy efficient retrofits
- 10 years of consumer residential energy tax credits for heat pumps, rooftop solar, HVAC, and water heaters
- $1B grant program to improve energy efficiency and climate resiliency in affordable housing
- Extension and modification of the Carbon Capture tax credit
- $5.8B for the Advanced Industrial Facilities Deployment Program to reduce emissions from chemical, steel and cement plants
- $5.7B of federal procurement for low-carbon material investments
? Ag & Land Use
- $20B to support climate-smart agriculture practices and conservation
- $5B to support reforestation, conservation, and wildfire prevention
- $2.6B in grants to conserve and restore coastal habitats
? Environmental Justice
- $5B EPA funding to reduce climate pollution
- $6B to invest in community led environmental health projects and support neighborhood equity, safety, and transportation access
We also celebrate the fact that Australia has just passed a bill to ensure the country reduces its greenhouse gas emissions by 43% by 2030, and Germany has approved plans to invest $180 billion in a “Climate and Transformation Fund” to accelerate climate action while making energy supplies environmentally friendly, reliable and affordable.
These are clear signals that a new global energy economy is emerging and unstoppable, but it doesn’t necessarily mean smooth sailing.