Is the Inflation Reduction Act a Hidden Green New Deal?
TL/DR –
The Inflation Reduction Act (IRA) passed by the Biden Administration in 2022 made unprecedented investments in clean energy and climate health, setting aside $369 billion for climate investments and incentivizing citizens to adopt renewable energy measures. The bill was predicted to bring $3 trillion into renewable energy, create 170,000 new jobs and increase sales of electric vehicles, as well as making clean energy more affordable for disadvantaged communities. However, the act allegedly permitted the fossil fuel industry to expand, with the agreement to sell a $200 million lease for oil and gas companies to develop land in the Gulf of Mexico, and many argue that legislation to discourage oil and gas development is needed.
Exploring the Climate Impact of the Inflation Reduction Act
The Inflation Reduction Act (IRA), passed by the Biden Administration in 2022, marked a significant investment in clean energy and climate health. With $369 billion earmarked for climate investments, the IRA aimed to spur the adoption of renewable energy. It increased tax benefits for homeowners installing solar panels and battery storage equipment and offered substantial funding to clean energy enterprises. The Act was expected to inject $3 trillion into the renewable energy sector, create 170,000 new industry jobs, and boost the sale of electric vehicles.
Climate experts predicted that greenhouse gas emissions in the US could drop about 40% below 2005 levels by 2030 due to the IRA’s clean energy funding. They projected an average of 46 to 79 gigawatts of carbon-free energy would be added to the US electrical grid annually. The Act sought to make clean energy more affordable for disadvantaged communities and lower-income households by enhancing tax benefits, facilitating the establishment of clean energy in their communities. This could help mitigate harmful air pollution and reduce their carbon footprints.
However, the IRA also enabled the fossil fuel industry to expand. The bill was only sanctioned by the U.S. Senate after the Biden Administration agreed to a $200 million lease sale for oil and gas companies to develop a large tract in the Gulf of Mexico. A recent USA Today article noted that the bill prohibits leasing of federal lands for renewable energy unless there has been substantial leasing for oil and gas in the previous year. Despite advancements in clean energy, the continued burning of fossil fuels and its environmental impacts persist without specific legislation to curb oil and gas development.
Currently, fossil fuel development and usage in the US are at record highs, while only 32 gigawatts of carbon-free energy have been added to the grid annually due to project delays, supply issues, and local resistance. Supporters of the IRA argue that securing energy security through fossil fuels is necessary as the clean energy industry is still scaling. Critics, however, say discouraging oil and gas development could have expedited the growth of clean energy. The IRA is primarily an economic bill with secondary environmental considerations. Despite criticism from environmentalists, it remains the largest climate bill ever passed in U.S. history.
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