Sen. Joe Manchin (D-WV) leaves the U.S. Capitol after a vote, on Capitol Hill in Washington, Feb. 9, 2022.
Tom Brenner | Reuters
Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., unveiled a long-awaited reconciliation package Wednesday that would invest hundreds of billions of dollars to fight climate change and advance clean energy programs.
The 725-page law, called the “Inflation Reduction Act of 2022,” provides $369 billion for climate and clean energy supplies, the most aggressive climate investment ever made by Congress. The bill’s climate provisions (summarized here) would cut the country’s carbon emissions by about 40% by 2030, according to a summary of the deal.
The sudden announcement of the deal came less than two weeks after Manchin, a key centrist who holds the 50-50 vote in the Senate, said he would not support any climate provision until he had a better understanding of the July inflation figures. .
If approved and signed, the act would include funding for the following:
Manufacturing clean energy products, including a $10 billion investment tax credit in manufacturing facilities for things like electric vehicles, wind turbines and solar panels, and $30 billion in tax credits additional to production to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical products. mineral processing. It would also include up to $20 billion in loans to build new clean vehicle manufacturing facilities in the U.S. and $2 billion to renovate existing auto plants to make clean vehicles.
Reducing emissions, including $20 billion for the agricultural sector and $3 billion to reduce air pollution in ports. It also includes unspecified funding for a program to reduce methane emissions, which are often produced as a byproduct of oil and gas production and are more than 80 times more potent than carbon dioxide at warming the atmosphere. In addition, the law allocates $9 billion to the federal government to buy clean American-made technologies, including $3 billion for the US Postal Service to buy zero-emission vehicles.
Research and development, including a $27 billion Clean Energy Technology Accelerator to support the deployment of emissions-reducing technologies and $2 billion for innovative energy research in government laboratories.
Preserve and support natural resources, including $5 billion in grants to support healthy forests, forest conservation, and urban tree planting, and $2.6 billion in grants to conserve and restore coastal habitats.
Support for states, including about $30 billion in grant and loan programs for states and electric utilities to advance the clean energy transition.
Environmental justice initiatives, totaling more than $60 billion to address the disparate effects of pollution on low-income communities and communities of color.
For individuals, a $7,500 tax credit to purchase new electric vehicles and a $4,000 credit to purchase a new one. Both credits would only be available to low- and middle-income consumers.
“I support a plan that will advance realistic energy and climate policy that lowers prices today and invests strategically for the long game,” Manchin said in a statement Wednesday. “This legislation ensures that the market takes the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition underway in our country.”
The Senate must vote on the bill next week, after which it will go to the Democratic-controlled House of Representatives.
President Joe Biden said Wednesday that tax credits and investments for energy projects in the deal would create thousands of new jobs and help lower energy costs, urging the Senate to move the legislation forward as soon as possible .
The president has pledged to reduce US greenhouse gas emissions by 50% to 52% from 2005 levels by 2030 and reach net zero emissions by mid-century. Without a reconciliation bill, the country is on track to miss that goal, according to a recent analysis by independent research firm Rhodium Group.
“This is the action the American people have been waiting for,” the president said in a statement Wednesday. “This addresses today’s issues — high health care costs and general inflation — as well as investments in our energy security for the future.”