A BRIEF
The United States, the second highest country to spew carbon into the atmosphere has passed the landmark and historic ‘Inflation Reduction Act’ in an endeavor to aim for green and clean energy by the year 2030. This can be termed as a significant step toward Biden’s goal of reducing pollution in half by the year 2050 in accordance with the Paris Climate Agreement. With a party-line vote of 220-207, Congress passed Democrats’ signature climate and healthcare legislation on August 12, 2022.
Social and environmental programs will be accelerated through this law, which is only a camouflage of the wider and pioneering plan. In response, Republicans vehemently opposed the bill, calling it a wasteful liberal daydream that would raise financial implications through taxes and increase family expenditure. In a heated debate among members of the House ending with the final vote, Republicans attacked the bill as a reckless spending spree that failed to address Americans’ financial needs.
ABOUT THE CLIMATE BILL
Democratic lawmakers have been negotiating and discussing the ‘Inflation Reduction Act’ for more than a year, as the bill is officially called. The Inflation Reduction Act is substantive legislation that was signed by President Joe Biden. Former Democratic senator Joe Manchin, who negotiated the current idea behind closed doors with Senate majority leader Chuck Schumer, defeated the bill’s predecessor, the Build Back Better Act, the previous year.
Among the funds included in the law are $369 billion to boost renewable energy sources and reduce greenhouse gas emissions. In comparison to 2005, the goal is to curtail carbon emissions in 8 years by 40%. The success of an energy bill depends on the effectiveness of its policy feedback loops. The initial success of the legislation will encourage further policy reinforcement by creating thousands of jobs and bringing in tax revenue as the bill proposes the revisions. Inflation Reduction Act subsidies for carbon capture will be fully utilized by Big Oil Conglomerates. The measure suggests providing funding, tax credits, and loans for innovations such as solar technology. Consumer initiatives to increase energy efficiency in households will also be encouraged.
The Bill is desirably expected that will reduce emissions from coal and gas-powered power plants and control air pollution in farms, ports, and low-income neighborhoods by enacting emission-reducing machinery. This measure also includes a price of up to $1,500 per tonne for methane emissions, one of the most potent greenhouse gases along with it introduces penalties for fossil fuel companies spewing excessive amounts of methane, which equates to greenhouse gas emissions.
THE DELIBERATIONS
By using the expedited budget reconciliation procedure, Democrats passed the bill through both chambers. Despite negotiations starting again this spring between Senator Chuck Schumer, a Democrat from New York who rejected the bill citing its complexity and extortionate, and Mr. Manchin, they broke down once again a month ago. Senator Kyrsten Sinema, another centrist holdout from Arizona, played a significant role in shaping the bill. In contrast to the majority of her colleagues, she had earlier on many occasions opposed several tax surges. In late 2021, Congress passed a $1.9 trillion program to combat a pandemic-induced economic slowdown despite Republican opposition.
ANALYSIS
According to a survey conducted by Reuters on August 3-4, 2022, 34% of Republicans and 69% of Democrats support legislation regulating medication prices and environmental pollution. In response to the measure, certain corporate entities have reacted differently, resulting in higher taxes for some companies but protecting the fossil fuel industry hand on hand basis. Investors willing to invest in clean energy goods will continue to benefit from federal subsidies in the form of long-term tax credits for wind and solar energy and new credits for energy storage, biogas, and hydrogen. After frequent interruptions in the incentives for low-carbon technology, innovators of clean energy would have the security and an impetus favouring them to take a stance. As part of the measure, Republicans are expecting a proposal to reinstate the Superfund tax on petroleum products and crude oil imported from overseas.
One of Biden’s first executive orders, after he became president, stated that the US is focusing on tightening methane controls for the oil and gas industry, the bill had been long-awaited by the Environment Protection Agency wherein many backlashes were faced by Biden’s government for lagging behind the European regulations. An infrastructure bill recently approved by the Senate includes billions to reclaim orphaned wells and minelands. As a major source of methane emissions from landfills
, food loss and waste are also being focused on by the administration to be included through the enactment of the Bill.
CONCLUSION
The law to reiterate will face major challenges on enactment The new EV tax credit emphasizes manufacturing rather than increasing demand for EVs, since President Biden has prioritized American manufacturing. Furthermore, since a successful implementation is disruptive by nature, existing technologies will scuffle it. For the concept of sustainable renewable energy to be successful to be adopted into practice, close monitoring of the implementation of the Inflation Reduction Act is essential. In accordance with the Paris Agreement, the US has committed to a 50–52% reduction. As a result of this law, the emissions gap between business as usual (BAU) and the Nationally Determined Contribution (NDC) in 2030 could be closed by 50–66%. It must be emphasized, however, that fossil fuels remain a major part of the US economy.
Yet, the Democratic party group believes that President Joe Biden’s comeback victory on sought-after issues will increase their chances of maintaining control of Congress in the midterm elections in November. The repercussions of establishing the law would be another roadblock to be surpassed by the authorities while considering the enactment at the state as the law has paved its way at the federal level.
Written by : Aathira Pillai
Edited by : Swastika Das