Biden’s climate plan is back, and it’s all about building things - The Verge
Dubbed the Inflation Reduction Act, a new bill from Democrats would raise $740 billion in revenue and spend $370 billion of it to fight climate change.
It’s been a long road for the “Build Back Better” plan — but Wednesday night, after over a year of both public and private negotiations, we finally saw a proposal that could actually clear Congress. Renamed the “Inflation Reduction Act,” the new Sen. Manchin-endorsed proposal would raise roughly $740 billion in revenue through a combination of tax increases and price negotiation — and divert $370 billion of that money to fighting climate change. If it makes it through Congress, the bill would be the largest climate spending package in US history — and with alarming heatwaves in progress all around the world, it couldn’t come at a better time.
But while the sheer volume of the package is striking, it’s even more interesting where the money is going. Lowering US emissions will require a lot of physical equipment — for alternate power sources like solar and wind, as well as efficiency equipment like heat pumps. The new proposal lays out an industrial policy for building that equipment, providing new incentives at every phase of the process.
The bill gives $30 billion in tax credits to utilities that develop clean energy sources and another $27 billion in accelerator funds to support deployment of emission-reducing technology. Another $20 billion will be loaned out to support domestic electric car factories, with $10 billion in investment tax credits for factories making wind turbines or solar panels. On the demand side, the bill establishes 10 years of consumer tax credits for homeowners who buy heat pumps, rooftop solar panels, or other equipment that will make their homes more energy efficient.
Put simply: this bill is putting up a lot of money to make sure these technologies get developed, built, and installed. There are direct efforts to cap emissions, too — whether by plugging methane leaks or incentivizing industrial sites to get cleaner — but the bulk of the climate plan rests on this idea of increased production to make the economy greener while helping it grow.
That represents a real political gambit for Democrats, balancing the urgency of climate action against real political pressure from rising energy prices and general economic chaos. Building off the Green New Deal proposals from the 2020 campaigns, Democrats want to put forward a kind of climate action that doesn’t hurt the economy or raise gas prices — and doesn’t cost them votes as a result. But even if the political calculus is right, it’s hard to predict whether the approach will actually succeed in bringing down US emissions and meeting our aggressive climate goals.
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