Biggest Climate Bill Ever Signed into Law; It’s a Game Changer With some Compromises Wrapped Inside the Inflation Reduction Act

On August 16^th President Biden signed the landmark Inflation Reduction Act into law after passage by a vote of 51-50 in the Senate where all Democrats voted for the bill and all Republicans against. Only the presence and tie-breaking vote of Vice President Harris allowed the bill to pass. The new law is a combination of climate action subsidies or  ‘carrots’ and  health care provisions to lower costs for citizens and the government that are paid for by closing tax loopholes, better IRS enforcement, lower drug costs, and minimum taxes on huge corporations.  A generous round of thanks are due to President Biden and Senate Leader Schumer who never gave up the fight for this legislation, Senator Joe Manchin who finally decided on the compromises he could live with, and the rest of the Democratic caucus and climate staffers in the US Senate. This was a remarkable achievement in an evenly divided Senate. It would be considered a landmark achievement even in a Senate less evenly divided.

As I watched the ceremony, my mind wandered back to 2009, which was the last time that a climate bill passed any house of Congress. Thirteen years ago the House of Representatives passed the Waxman-Markey bill, more formally known as the American Clean Energy and Security Act which was a cap and trade approach to limiting greenhouse gases in the US. Cap and trade is a regulatory approach to lowering emissions based on a “stick” or limit on emissions from various sectors of the economy. Though at the time there were some Republicans like John McCain who favored action on climate change, the bill was never brought to the Senate floor because of overwhelming opposition and the filibuster rule requiring 60 votes to debate most bills.

Who would have thought then that more than a decade would pass before Congress tried and succeeded in passing another climate bill? Not me. I thought it might be just a few years before Congress regrouped and started to face what was then, and even more so now, an existential crisis for the world and all life on the planet. In the intervening years since 2009, global average CO2 in the atmosphere has gone from 388 ppm to 416 ppm in 2021, and nine out of ten of the hottest years on the planet since record keeping began have occurred in the last ten years.  The official climate change website of the US government reports, that, “Averaged across land and ocean, the 2021 surface temperature was 1.51 °F  warmer than the twentieth-century average of 57.0 °F and 1.87 ˚F (1.04 ˚C) warmer than the pre-industrial period (1880-1900). “ We’re getting dangerously close to the 2.7 degree Fahrenheit (1.5 degree Celsius) temperature change that climate scientists have warned could trigger horrific climate consequences to Earth’s ecosystems and people.

The ocean has absorbed 90% of the extra heat generated by burning fossil fuels and other human activities. So, it is not surprising that the ocean is warming rapidly and physically expanding which has accelerated sea level rise. Heat trapped in the upper 500 meters of the ocean has been increasingly steadily since the 1990s. The five hottest years for average ocean temperatures since 1955 have occurred since 2015.  Destructive marine heatwaves have hammered regional ecosystems like the Great Barrier Reef in 2002 and 2014-2017, the kelp forests of the US West coast in recent years and coral reefs around the world.

Since the last climate bill failed in 2009, the entire Earth has warmed faster and faster with more disturbing consequences: coral bleaching events, fisheries disappearing and others moving toward colder poles, increased strength and frequency of hurricanes, tornadoes, floods, droughts and fires all predicted by climate scientists for a long time. Finally, any vestige of Republican Congressional support for action on climate change has withered, and President Trump took several executive actions that made faster climate change more likely, not less likely.

But some good things have happened since the last climate bill failed in 2009: the price of renewable electricity dropped by 90% because of innovation; and renewables entered the mainstream utility market. Then there was about 2,000 megawatts of solar in the US; last year alone 24,000 megawatts were installed. In 2009, there were 25,000 megawatts of wind power; last year alone 17,000 megawatts were installed. In 2009, the plug in electric vehicle market barely existed and hybrids were pretty rare. But in the second quarter of 2022, car manufacturers sold about 173,000 plug-ins in the US, accounting for a 5% share of the market and growing quickly.

The rest of the world has changed, too. Several world climate meetings have focused intensely on climate action; and there are now transparent promises (called nationally determined commitments) from most countries for specific actions to reduce emissions. These include conserving natural areas like forests and mangroves that soak up carbon dioxide, though there are no international enforcement mechanisms to hold countries to their promises.  Developed countries have promised to help poor countries make transitions to lower emissions and finance adaptation to climate change.  Large marine protected areas (MPAs) have been set aside that can help make marine life inside more resilient to climate change impacts. Marine Conservation Institute’s Blue Park and Blue Spark programs are incentivizing high quality MPAs around the world that will provide that resilience to marine life.

With that context in mind, what’s in the new Inflation Reduction Act for climate and our ocean? First, the law is projected to help reduce US greenhouse gas emissions by 40% (compared to 2005 levels) by 2030 which will help get us to net zero emissions in later decades. Almost all the climate provisions are ‘carrots’ with subsidies to generate renewable energy, adopt lower emission technologies for industry and transportation, and more climate friendly practices for farms.  Almost all of the regulatory ‘sticks’ are gone other than a tax on methane emissions from oil and gas operations. Methane is about 25 times more potent than CO2 at trapping heat in the atmosphere and the concentrations of methane in the air have doubled in the last two centuries.  Second thing to note is that the amount of money for the climate subsidies is very large –approximately $360 billion. We’ve gotten inured to big spending bills, but this is one third of a trillion dollars.  By contrast, the American Recovery and Reinvestment Act, the Obama era legislation that pulled the entire economy and country out of the 2007-08 recession was only about twice as large at $800 billion. So this law contains a lot of clean energy, energy saving, climate adaptation money.

The law contains money for a host of climate fighting actions and climate change adaptation. According to EarthJustice, provisions that will impact households include tax credits and rebates to help people electrify their homes and vehicles:

• A 30% tax credit for installing residential solar panels.
• Up to $7,500 for purchasing a new electric vehicle and $4,000 for a used EV.
• Up to $14,000 for home energy efficiency upgrades, including up to $8,000 to install a heat pump.
• Making these changes could help families save $1,800 per year on energy bills and make their costs more stable and predictable compared with volatile fossil fuel prices.

For industry and farmers, the benefits include:

• Expanding access to renewable energy by making clean energy tax credits more accessible and extending them by 10 years.
• Creating jobs and increasing our country’s energy security by investing $60 billion in manufacturing solar panels, batteries, and other clean energy technologies in the U.S.
• Removing barriers to community solar, an innovative solution to making solar power more accessible and affordable for the average person.
• $3 billion for the U.S. Postal Service to electrify its fleet of more than 217,000 vehicles, the largest government fleet in the nation.
• $1 billion for clean school and transit buses, garbage trucks, and other heavy-duty vehicles, prioritizing communities overburdened by air pollution.
• $3 billion to clean up air pollution at ports by installing zero emissions equipment and technology, with much of the funds going to portside communities that are breathing disproportionately high levels of toxic air pollution.
• More than $20 billion to help farmers and ranchers shift to sustainable practices like crop rotation and cover crops.

For the oceans and coasts, this bill will help put the US on a path to reduce emissions and begin to slow climate change.  The law also includes $2.6 billion of spending for local coastal communities to fight climate change by preserving and restoring coastal ecosystems like marshes and sea grasses and other adaptation strategies. Will this be enough to stop and reverse global warming and will oceans stop warming and coral reefs stop bleaching from this legislation alone? The answer is clearly “No”.  But since 2009, the US has dug itself a very deep hole on climate change; and this is the first major bill to start filling in that hole. Any reduction in the speed of global climate change inevitably helps the ocean and its marine life. The other big step here is that for the first time in the US, a major climate law recognizes that the ocean can be part of the solution to climate change, not just a victim. Allocating money for ocean and coastal habitat conservation and restoration for carbon sequestering systems like marshes, sea grass meadows and mangroves means that our ocean and coasts will help to lock up excess carbon for hundreds or thousands of years. Surely, that is a step to celebrate.