A surprise deal announced Wednesday night between US Senator Joe Manchin and Democratic Senate Majority Leader Chuck Schumer may unlock nearly $370 billion in investment on renewable energy, energy security and climate-focused initiatives, that had appeared threatened by political deadlock.
The deal to add climate provisions to the proposed “Inflation Reduction Act of 2022,” which also includes deficit reduction, corporate tax and pharmaceutical price reduction measures, gives the bill the support of the 50 senate Democrats, clearing a major hurdle for the legislation.
In a statement announcing the agreement, Schumer said:
“By a wide margin, this legislation will be the greatest pro-climate legislation that has ever been passed by Congress. This legislation fights the climate crisis with the urgency the situation demands and puts the U.S. on a path to roughly 40% emissions reductions by 2030, all while creating new good-paying jobs in the near and long-term.”
Climate and energy focused aspects of the proposed legislation include measures to lower the cost of renewable energy solutions for consumers, promote the development of domestic clean energy manufacturing capacity, support climate solutions to decarbonize industry, and invest in climate resilience and mitigation initiatives in disadvantaged communities.
Key allocations include over $60 billion to accelerate domestic manufacturing of clean energy and transportation technologies through production and investment tax credits, loans and grants, $9 billion in consumer home energy rebate programs to electrify home appliances and for energy efficient retrofits, consumer tax credits or solutions such as rooftop solar, HVAC and heat pumps aimed at making homes energy efficient and run on clean energy, $30 billion in grant and loan programs for states and electric utilities to transition to clean energy, and a $27 billion clean energy technology accelerator to support deployment of technologies to reduce emissions.
The package also includes over $60 billion for “Environmental criteria consider how a company performs as a steward of nature. justice priorities,” aimed at driving investments into disadvantaged communities. Additionally, the bill targets billions in climate solutions-focused investments targeting farmers and forestland owners, including over $20 billion for climate-smart agriculture practices, in addition to tax credits to support biofuels production and to develop sustainable aviation fuel infrastructure.
The deal marks a major boost for President Biden’s climate agenda, which had appeared stalled in the legislative process. Last week, the president indicated that he may declare climate change an emergency, which would enable the use of executive powers to bypass Congress and force certain climate-related measures.
In a statement following the announcement of the deal, Biden said:
“We will improve our energy security and tackle the climate crisis – by providing tax credits and investments for energy projects. This will create thousands of new jobs and help lower energy costs in the future.”
The post Last Minute US Senate Deal Set to Unlock $370 Billion for Climate Action appeared first on ESG Today.