Sunday August 9th will remain in the history books as the day the United States Senate passed the largest economic package to date designed to combat climate change, by an “edge of your seat” 51 to 50 vote. The Bill, named The Inflation Reduction Act, faced several obstacles as it was discussed in the Senate - only a few weeks ago it seemed like it would not see daylight. Worries about the economic impact the bill would have echoed through the Senate in the past month, and it was only upon assurance by experts that it would not harm the economy that the opposition acquiesced. The ball will now land on the House of Representatives’ court, where discussions will continue later this week.
The Bill includes USD 369 billion in energy and climate provisions. This historic boost implies a dramatic change in the way Americans will receive their energy - it will decisively shape U.S. climate policy for the remainder of the first half of the century. This movement towards an accelerated green transition stands at odds with the direction Biden’s administration seemed to adopt earlier during the year, as oil and gas production were encouraged in a desperate attempt to relieve Americans from the burden of skyrocketing energy prices.
The overall dimension of the Bill was not as large as the original USD 2.2 trillion bill envisioned a year ago, but it is still the most significant investment in sustainable energy in America’s history. The Inflation Reduction Act is 400% larger than Obama’s American Recovery and Reinvestment Act of 2009. In the midst of the historic vote, Senate Majority Leader Chuck Schumer asserted that the bill “will kickstart the era of affordable clean energy in America. It’s a game changer, it’s a turning point, and it’s been a long time coming.”
Gregory Wetstone, president of the American Council on Renewable Energy, praised it by virtue of being the first bill in U.S. history to be “geared to drive the transition to clean energy and address the climate crisis.” Wetstone’s comment can definitely be justified if we bear in mind that it will not only expand tax credit for low-carbon technologies, but also increase America’s clean energy production by 300%, creating over 550 gigawatts of electricity from sustainable sources. Other areas addressed in the bill include corporate minimum tax, electric car credits and consumer energy perks, including tax reductions for all citizens adding renewable energy to their households.
The Bill is expected to pass in the House of Representatives, where Democrats enjoy a majority. Questions remain as to how it will be implemented, which will be answered in the coming months and years after its final approval.
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