US landmark climate bill clears Congress

As expected, the Democrat majority US House of Representatives has approved President Biden’s landmark $430 billion climate bill.

The House voted 220-207 along party lines to pass the measure titled the “Inflation Reduction Act” and send it on to Biden to sign into law. The Senate has previously approved the legislation in another entirely partisan vote, 51-50.

Biden said he would sign the bill in the coming week, then the White House would hold a celebration on 6 September in honour of what he said was historic legislation.

“Today, the American people won. Special interests lost,” Biden said in a Twitter post when it was passed.

The legislation to fight climate change and lower prescription drug prices aims to cut domestic greenhouse gas emissions. It will also allow Medicare to negotiate lower drug prices for the elderly and ensure that corporations and the wealthy pay the taxes they owe. Democrats say it will help combat inflation by reducing the federal deficit.

The bill includes $369 billion in funding for climate and clean energy provisions and, according to analysis from energy think tank Rhodium Group, the could reduce US greenhouse gas emissions by 31-44% below 2005 levels by 2030.

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. As such, investors looking to pour cash into clean energy products can expect at least a decade of federal subsidies through long-term tax credits for wind and solar and new credits for energy storage, biogas and hydrogen. Developers who use US-made equipment or build in poorer areas will have additional support.

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 also 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.

The bill also puts $27 billion towards a ‘green bank’ which is intended as a repository for investments in public-private partnerships that cut emissions, with $8 billion specifically directed to disadvantaged communities. It also contains funding for research, with $2 billion for basic research within national laboratories, including for fusion and high-energy physics infrastructure.

It also sets aside $20 billion for “climate-smart agricultural practices”, such as reducing methane emissions and building up soil carbon. There are grants and credits to support biofuels, including infrastructure for sustainable aviation fuel.

Some $5 billion will also go towards making forests more resilient to wildfire as well as urban tree planting. $2.6 billion will go to funding and grants to protect coastal communities and habitats and $4 billion will go towards addressing the water crisis in the western US, which is currently experiencing severe drought conditions.