August 7, 2022

Climate provisions part of Senate-passed Inflation Reduction Act

Bill Moree

The U.S. Capitol building, in 2022.

The U.S. Senate passed a $430 billion package aimed at addressing rising inflation rates, making prescription drugs more affordable and combating climate change on Sunday on a party-line vote, with Vice President Kamala Harris breaking the tie.

Democrats voted for the bill, while Republicans voted in opposition.

U.S. Sen. Ben Ray Luján, a New Mexico Democrat, said in a statement on Sunday that the Inflation Reduction Act “will be the most transformative action that Congress has ever taken to tackle the climate crisis.”

The package includes provisions to encourage domestic manufacturing of solar panels and other renewable energy components and to make it easier for people to retrofit their homes to be more energy efficient and to move away from fossil fuels. For example, it includes a new rebate program that is similar to what U.S. Sen. Martin Heinrich, a New Mexico Democrat, proposed in his Zero-Emission Home Act. This allows for rebates when people purchase and install electric appliances and equipment for their homes.

“These electric technologies from heat pumps for home heating to induction stovetops and condensing clothes dryers have already leapfrogged their fossil fuel-powered alternatives in terms of both efficiency and performance,” Heinrich said in a statement following the passage. “They can create major health benefits by replacing dirty fossil furnaces and gas stoves that are burning dangerous compounds into the indoor air in our homes. That means less children with asthma and less seniors with breathing problems that many of us don’t even realize are being caused by the appliances in our homes.”

He said the rebates will also help families save money on their energy bills because electric technologies are more efficient than their fossil fuel alternatives.

“This is particularly important at a time when so many Americans have been experiencing the pinch from inflation at the gas pump and in their gas and utility bills. We have moved mountains in the last year, and we are on the verge of getting something very deeply meaningful to the President’s desk,” he said.

The package must now go to the U.S. House of Representatives for passage before it heads to the president’s desk.

It also includes some provisions like extending the time period for carbon capture and sequestration projects to begin construction to be eligible for the “45Q” tax credits. These tax credits are based on the amount of carbon captured and either placed in deep underground reservoirs or sold for use in areas like enhanced oil recovery. Luján sponsored the legislation to expand and modernize the 45Q tax credits.

Additionally, it includes provisions to support the development of hydrogen power for transportation, electricity and industrial use.

Both carbon capture and hydrogen have controversial projects in New Mexico related to the closure of coal-fired power plants.

The package also includes $5 billion to try to prevent catastrophic wildfires like the western states, including New Mexico, have been experiencing in part due to climate change and to protect forest health. It also includes $4 billion to address drought in the western United States and $250 million for wildlife recovery and habitat restoration in both national and state wildlife refuges.

Like Luján, President Joe Biden said that the package makes the largest investment ever in combating climate change.

“It addresses the climate crisis and strengthens our energy security, creating jobs manufacturing solar panels, wind turbines, and electric vehicles in America with American workers.  It lowers families’ energy costs by hundreds of dollars each year,” he said in a statement.

Republicans say that the bill will not do what it is intended to do—address inflation. Instead, they argue that it will increase public spending.

The bill now heads to the U.S. House for approval.