In a move which could yet prove pivotal in the battle against climate change, the US Senate has approved the Inflation Reduction Act, allocating $369bn to reducing greenhouse gas emissions and investing in renewable energy sources.
The potential significance is such that, according to experts, US emissions could be cut by about 40% by 2030, compared with 2005 levels.
The final Senate vote was 51-50, with every Democrat supporting the bill while all 50 of their Republican colleagues opposed the legislation.
With the Senate evenly divided on the bill’s passage, Vice-President Kamala Harris cast the tie-breaking vote.
“The Senate is making history,” said Senate Majority Leader Chuck Schumer, who added that the legislation contains “the boldest clean energy package in American history” to fight climate change while reducing consumer costs for energy and some medicines.
“This is a massive turning point,” said Leah Stokes, a climate policy expert at the University of California, Santa Barbara.
“This bill includes so much, it comprises nearly $370bn in climate and clean energy investments. That’s truly historic. Overall, the IRA is a huge opportunity to tackle the climate crisis.”
The bulk of the bill is composed of tax credits aimed at unleashing a boom in clean energy deployment, along with payments to keep ageing nuclear facilities and other sources of low-carbon energy online.
A new system of fees will be imposed to stem leaks of methane, a potent greenhouse gas, from oil and gas drilling operations. The vast fleet of trucks used by the US Postal Service would go electric.
Consumers will be able to access a rebate of up to $7,500 for a new electric vehicle, or up to $4,000 for a used car, along with up to $8,000 to install a modern electric heat pump that can both heat and cool buildings.
Further rebates are also on offer, such as $1,600 to insulate and seal a house to make it more energy efficient.
Democrats have promised the bill will lower healthcare costs for millions of Americans by allowing Medicare to negotiate prescription drug prices and capping Medicare recipients’ out-of-pocket prescription drug prices at $2,000 a year.
Those who receive health insurance coverage through the Affordable Care Act marketplace are also expected to see lower premium costs.