October 6, 2022

What the Deflation Act Does—and Doesn’t—For the Climate

What the Deflation Act Does—and Doesn’t—For the Climate

President Biden is expected to sign it soon Inflation Law It became law and is the most important US investment to date in the fight against climate change. Along with tax reform measures and efforts to reduce health care costs, the bill provides $370 billion for decarbonization.

It is the first major environmental legislation passed since 1990 and the first to focus on climate change. Michael GerrardEnvironmental lawyer at the Columbia School of Climate Sabin Center on Climate Change Law. Gerard and other experts from around the climate school have discussed the expected impacts of the bill and what else is needed to meet US climate goals under the Paris Agreement.

On the positive side

The bill will pay for the bill’s $370 billion investment in the low-carbon economy Save on prescription drugs and increasing taxes on large companies, Among other measures. This includes $60 billion to develop renewable energy infrastructure such as solar panels and wind turbines. NPR reports. It also provides tax incentives for nuclear power generation, electric vehicles and energy efficiency.

Columbia University: “It provides incentives to transition to renewable energy.” Steve Cohen said Fox Weather. “This is a process that is already underway and will speed up the process.”

this Rhodium group It notes that these measures will help people save on energy costs and increase the country’s energy security by reducing reliance on imported fossil fuels and exposure to their fluctuating prices.

The Deflation Act makes the United States’ targets under the Paris Agreement available. The country pledged to reduce its greenhouse gas emissions by 50-52% below 2005 levels by 2030. According to the Rhodium Group, with the measures included in the IRA, the US could achieve a 44% reduction compared to the maximum. 35 percent under current policy.

The graph shows the reduction of greenhouse gas emissions

The Rhodium Group calculated how much the deflation rule could reduce US greenhouse gas emissions (orange) compared to current policy (blue). Source: Rhodium Group

Tax credits may also help technologies such as carbon capture, clean hydrogen and other clean fuels advance to more impactful levels, Rhodium noted.

Problematic compromises

In order to get the unanimous support of the 50 Senate Democrats — including Joe Manchin of West Virginia — he has received. Significant financial support From the fossil fuel industry – concessions had to be made.

“The bill is full of compromises,” Gerrard said. Most troubling are the requirements for more federal land and water auctions for fossil fuel extraction.

like the cried It explains: “The compromise bill would reinstate the old auctions that the Biden administration tried to repeal and would force the administration to hold several new auctions in the coming years. The law also requires the government to auction off millions of acres of oil and gas leases before it can auction off farmland for wind and solar farms.

However, experts, including Gerrard, are hesitant to call this a major victory for fossil fuel companies. “Only a fraction of these auctions lead to actual mining and drilling,” he explained. “Overall, the environmental benefits of this bill far outweigh the costs.”

Land points aren’t everything. Gerrard said that while the bill includes many rewards for climate-friendly choices, it removes some penalties for emitters.

The bill includes an unprecedented cap on methane emissions, as well as ways to get out. “Much more significant penalties for carbon emissions from power plants were eliminated in the first place by Senator Manchin.” he explained. “The Supreme Court also made it more difficult to regulate these publications. “So coal plants will continue to decline, but not as fast as we need.”

More is needed

Although the deflation law would move the U.S. toward meeting Biden’s 2030 emissions reduction goals, Gerrard said “more is needed.”

Achieving the 2030 goal, and especially the 2050 goal of net zero emissions, will require significant technological advances. The IRA and CHIPS Act, which President Biden signed into law on Aug. 9, will greatly expedite the needed investigation, Gerrard said. EPA must still use its existing authority under the Clean Air Act and other laws. State and local governments must act. “The private sector must move forward.”

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