In order to keep his promise to reduce the nation’s fossil fuel emissions while spending hundreds of billions of dollars to combat climate change, President Joe Biden is about to sign America’s first significant climate legislation.
The House approved the Inflation Reduction Act of Representatives on Friday by a vote of 220-207. Republicans did not support the bill in any way.
The legislation was approved by all 50 Democrats in the Senate on Sunday following a protracted debate that lasted several days. Vice President Kamala Harris cast the Senate tie-breaking vote. Republicans did not vote in favor of the bill in the Senate as they did in the House. The proposal will now go before Biden, who is anticipated to sign it into law as soon as possible.
Democrats’ broad spending and tax plan meet a number of their top concerns, including expanding access to health care and decreasing the debt. However, the majority of the funding will address the climate crisis. This comprises around $370 billion in investment, which includes tax credits to encourage the use of electric vehicles and clean energy, as well as incentives for businesses to increase the production of renewable energy and support carbon dioxide abatement technologies.
The passing of the bill represents a victory for the battle against climate change and a notable improvement from last year, when Biden’s planned $2 trillion Build Back Better Act, which included more than $500 billion in climate change financing, was approved by the House but failed in the Senate. According to experts, the scaled-back Inflation Reduction Act is still a highly significant measure that has the ability to cut the country’s greenhouse gas emissions by 40% by the end of the decade. Biden referred to the legislation as the “biggest investment ever in tackling the existential problem of climate change.”
How will the Inflation Reduction Act encourage the use of clean, renewable energy?
Tax credits are the key driving force behind the Inflation Reduction Act, which the administration thinks will assist in shifting the nation’s industry and consumers away from fossil fuels and toward renewable energy. The measure extends a number of renewable energy tax benefits that are currently in place. It also develops fresh incentives for spending money on renewable energy technology.
Along with providing investment and incentives for industrial enterprises to employ clean energy in their manufacturing and production to reduce US carbon emissions, this includes billions of dollars that will be used to increase the generation of electrical power via wind and solar.
The law provides tax incentives to encourage customers to purchase and use heat pumps, electric appliances, and other technology to improve household energy efficiency. Tax incentives are also included for consumers to purchase solar panels, batteries, and electric vehicles. This includes establishing a $4,000 credit for used electric vehicles and extending a $7,500 tax credit on purchasing a new electric vehicle. Credits are also available for buying electric cars for business use.
According to climate experts, the plan may lower US emissions by nearly 40% below 2005 levels by 2030. This would be an important step in preventing the worst effects of global warming.
By 2030, Biden wanted to cut greenhouse gas emissions in the nation by at least 50%. The Paris Agreement’s more general objectives, which aim to keep global warming below 1.5 degrees Celsius to prevent irreversible effects on ecosystems and human health, include that target.
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The Inflation Reduction Act dedicates $60 billion to aid Americans who have endured the worst effects of fossil fuel pollution. This entails supporting initiatives to reduce pollution while fostering resilience in areas most impacted by the effects of climate change, such as sea level rise, damage from stronger storms and hurricanes, and communities threatened by wildfires.
Companies that generate too much methane are also penalized under the legislation.
How is the law anticipated to impact the economy?
The Biden administration claims that the Inflation Reduction Act will generate green jobs since it promotes the creation of clean technology in the US and will increase the output of renewable energy.
