President Biden signed the Inflation Reduction Act on Wednesday, codifying into law a major package of climate, health care and tax legislation.

The new law includes the U.S.’ largest ever set of climate-focused investments, allocating nearly $370 billion to areas including renewable energy and industrial decarbonization solutions.

The passage of the Act marks one of the Biden administration’s major accomplishments to date, and a significant step forward on the President’s climate ambitions. Addressing climate change has been a major focus from the start of the administration, beginning with the return of the U.S. to the Paris Agreement on Biden’s first day in office, and the establishment of national interim emissions reduction targets last year.

The administration’s ability to push through some of its key climate proposals had appeared threatened by Congressional inaction, however, until a recent deal announced between and Democratic Senate Majority Leader Chuck Schumer and holdout US Senator Joe Manchin to include the climate provisions in the bill, enabling the legislation to ultimately pass through Congress and find its way to the President’s desk.

President Biden said:

“This bill is the biggest step forward on climate ever — ever — and it’s going to allow us to boldly take additional steps toward meeting all of my climate goals — the ones we set out when we ran.”

Climate and energy focused aspects of the bill 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 for 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 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.

Climate and sustainability-focused organizations, investment and professional services groups welcomed the passage of the law, noting the positive economic and environmental impacts expected from the new climate action.

Anne Kelly, Vice President of Government Affairs at sustainability non-profit Ceres, said:

“Companies and investors know the new law is going to dramatically bolster the U.S. clean energy industry to ensure our nation competes in the global economy of the future, while bringing jobs, cost savings, energy security, public health benefits, and flourishing new industries to communities across the country.”

Rob Fisher, IMPACT and ESG Leader at KPMG US, said:

“The landmark climate provisions in this legislation are another piece of the puzzle for reducing emissions and increasing energy security in the U.S. New partnerships and funding streams will undoubtedly form, and the companies that continue to embed climate considerations into strategy stand to gain a competitive advantage as we transition to a low carbon economy.”

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