The Promise and the Potential of the Inflation Reduction Act

The Largest Federal Investment in Climate Action, Ever

by Joel Porter

Last weekend the U.S. Senate passed the Inflation Reduction Act (IRA), which includes provisions aimed at slashing greenhouse gas emissions and improving the climate resilience of our communities. The road to get here was certainly bumpy, and the bill is far from perfect. Still, if the bill passes the House of Representatives as expected, it will mark the largest federal investment to tackle climate change in this country’s history. 

CleanAIRE NC is cautiously optimistic about the IRA’s long-term significance for our climate. So what would the bill actually do?

The bill will pay for its climate investments through several key revenue provisions, such as strengthening IRS tax enforcement to ensure tax-dodging entities will now pay their fair share. In the long-run, when combined with the bill’s policies aimed at reducing energy bills and other common household costs, that revenue should help reduce the deficit and combat inflation.

When it comes to the climate, the bill has several provisions that can benefit North Carolina’s efforts to reduce emissions. For example, extending and enhancing subsidies for wind and solar will offer clean energy producers some certainty in an otherwise politically-fraught time. New subsidies for advanced technologies and manufacturing will encourage research and development to innovate new ways to clean up our grid, and importantly, our industrial and transportation sectors.

Several provisions will help at the household and community levels as well. The income-based subsidies for new and used electric vehicles offer important incentives that can help our state meet our EV transportation goals. And most importantly, the bill includes many provisions aimed at benefiting “disadvantaged communities,” offering programs to improve energy efficiency for our state’s most vulnerable populations, create new clean energy jobs, and protect the health of our people and environment.

Like all policies, the proof is in the pudding (as they say), and implementation of the bill must be seamless. But until the other half of Congress decides to finally step up and help tackle Climate Change, we’ll take what we can get from the Feds.

In the meantime, CleanAIRE NC will continue to pursue state-level solutions such as the Regional Greenhouse Gas Initiative that can cut our carbon emissions and promote economic growth alongside a strong North Carolina Carbon Plan. We’re also working closely with stakeholder groups on the state’s Clean Transportation Plan, and encouraging Gov. Cooper to support the adoption of the Advanced Clean Trucks Rule to bring necessary health, climate, and economic benefits to North Carolinians and solidify our state’s status as a leader in clean transportation.

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For more information about the Inflation Reduction Act, we recommend the following resources:

Bipartisan Policy Center: “Inflation Reduction Act Summary: Energy and Climate Provisions”

JDSUPRA Blog by attorney’s from McDermott Will & Emery: “What the Inflation Reduction Act of 2022 Means for Renewable Energy Developers, Investors and Manufacturers”

Rocky Mountain Institute: “How the New Climate Bill Promises to Cut Inflation, Upgrade the Economy, and Slash Emissions”

Brookings Institute: “The Climate Bill’s Oil and Gas Provisions are a Worthwhile Tradeoff”

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