Here’s what’s in the Inflation Reduction Act, the sweeping bill impacting health, climate and taxes
by TheHill.com - 08/12/22 2:11 PM ET
The House on Friday afternoon is expected to approve the Inflation Reduction Act, sending a top Democratic legislative priority to the White House in a significant victory for President Biden.
The includes measures to address energy and climate as well as major changes to the tax code and to health care.
Here’s a look at what is included in the bill:
ENVIRONMENT, ENERGY AND CLIMATE
The bill contains a host of measures that would impact energy, the environment and climate change.
It has many provisions that promote the deployment of clean energy or that are otherwise designed to mitigate climate change, but also contains others that boost fossil fuels — included to secure the support of Sen. Joe Manchin (D-W.Va.).
Nevertheless, models still estimate major climate benefits coming from the legislation. Three widely cited models respectively estimate that the bill will bring U.S. planet-warming emissions 31 to 44 percent, 37 to 41 percent and 42 percent lower than they were in 2005 by 2030.
New incentives for lower-carbon and carbon-free energy.
Tax credits are extended for energy production and investment in technologies including wind, solar and geothermal energies. The investment tax credit also now applies to battery storage and biogas.
Tax credits would be created or extended for additional technologies and energy sources including nuclear energy, hydrogen energy coming from clean sources, biofuels and technology that captures carbon from fossil fuel power plants.
Many of the incentives contain bonuses for companies based on how much they pay their workers and whether they manufacture their steel, iron and other components in the U.S.
Consumers get tax credits to make cleaner energy choices.
Tax credits are extended for residential clean energy expenses including rooftop solar, heat pumps and small wind energy systems. Consumers can get credits for 30 percent of expenditures through 2032, and the credit phases down after that.
Tax credits of up to $7,500 are offered to consumers who buy electric vehicles — but this credit comes with stipulations that may make it difficult for vehicles to actually qualify, including a requirement that some of the minerals used in their batteries come from countries that have free-trade deals with the U.S. Minerals from China, a major supplier, wouldn’t meet that requirement.
A tax credit would be expanded for energy efficiency in commercial buildings.
Some fossil fuel production on public lands would be bolstered.
The future of solar and wind on public lands and wind in public waters would be tied to requirements to hold lease sales that open up new oil and gas production.
The bill reinstates the results of a recent offshore oil and gas lease sale that was struck down on environmental grounds. The Interior Department would be required to hold at least three more offshore oil and gas lease sales by October 2023.
New programs boost investment in climate.
A new program aims to reduce emissions of the planet-warming gas methane from oil and gas by both providing grants and loans to help companies reign in their emissions and levying fees on producers with excess methane emissions.
$27 billion would go to a green bank that would provide more incentives for clean energy technology.
Fossil fuel production on public lands gets more expensive.
Minimum royalties increase for companies to pay the government for oil and gas they extract on public lands and waters. A royalty is added to the extraction of gas that is later burned off or released as waste instead of sold as fuel.
Communities harmed by pollution get relief.
$3 billion would go to environmental justice block grants — community-led programs addressing harms from climate change and pollutants, including $20 million for technical assistance at the community level, through fiscal 2026.
More than $3 billion is allocated to funds for air pollution monitoring in low-income communities. Nearly half of the funds — $117 million — would specifically go to communities in close proximity to industrial pollutants.
An excise tax on imported petroleum and crude oil products to fund the cleanup of industrial disaster sites increases from 9.7 cents to 16.4 cents per barrel. The reinstatement of the tax is projected to raise $11 billion.
The bill permanently extends and increases the Black Lung Disability Trust Fund, a tax on coal production to finance claims from workers with the condition. Black lung, caused by long-term exposure to and inhalation of coal dust, is believed to affect at least 10 percent of coal miners with at least 25 years’ experience, according to a 2018 study by the National Institute for Occupational Safety and Health.
— Rachel Frazin and Zack Budryk
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https://thehill.com/homenews/3597824-heres-whats-in-the-inflation-reduction-act-the-sweeping-bill-impacting-health-climate-and-taxes/
