Inflation Reduction Act with Dr. Frances Colón - the Senior Director of International Climate Policy for the Center for American Progress

Today's episode features an informed conversation about the Inflation Reduction Act with Dr. Frances Colón, Senior Director of International Climate Policy for the Center for American Progress.

Recorded April 2023

Inflation Reduction Act Overview

·       The Inflation Reduction Act (IRA) (poorly named but our big climate plan!) has $369 billion in funding for climate and clean energy, making it the largest investment for the clean energy transition in U.S. history.

o   (IRA Helps tame rising inflation by lowering the cost of energy, prescription drugs, and health insurance, and by raising the federal revenue required to both pay for these programs and reduce the federal budget deficit.)

·      The IRA aims to build a 21st-century economy by leveraging federal tax dollars to generate $1.7 trillion in investments over the next ten years. 

·       It includes more than 20 new or modified tax incentives and tens of billions of dollars in grant and loan programs to supercharge our transition to a clean energy economy – creating jobs, lowering energy costs for everyday Americans, and tackling climate change by reducing emissions. 

·       The IRA is a strong industrial policy and would finally provide the means for America to take control of our own clean energy future–one that does not rely on imports, but instead fosters a homegrown, robust clean energy manufacturing sector. It directly invests tens of billions of dollars–and encourages billions more in investment–to build out domestic clean energy manufacturing capabilities.

·       The IRA is projected to achieve historic reductions in greenhouse gas emissions, setting the US on course to meet President Biden’s goal of reducing US GHG emissions by 50% by 2030 relative to 2005 levels. It will also achieve historic reductions in local pollutants, improving public health across the country. The US ceased being an international climate leader when President Trump had the US leave the Paris Agreement, and now with President Biden’s return and with a promising plan to fulfill our emission goals, the US can once again become a leader on the international stage.

Family and Household Savings

The massive investments that the IRA makes in energy-efficient infrastructure and technology will lead to significant savings for Americans.

·       Save the average household up to $1,000 per year through reduced energy costs.

·       Tax credits and rebates for energy-efficient appliances which could create savings of at least $350 per year.

·       Savings of up to $2,600 per vehicle per year in reduced maintenance and fuel costs are supported by tax credits for electric vehicles.

Targeted Investment in Low-Income and Disadvantaged Communities

The IRA includes roughly $60 billion in funding to uplift underserved communities and address environmental injustice.

·       Disadvantaged communities and communities of color bear a disproportionate burden from pollution. A person of color is more than three times as likely to be breathing some of the most polluted air in the US than a white person.

·       Of the $60 billion, a Greenhouse Gas Reduction Fund will channel at least $15 billion to environmental justice and disadvantaged communities to increase renewable energy deployment, local jobs, and resilience to extreme weather and climate impacts and to decrease pollution in overburdened communities and there will be $3 billion in Environmental and Climate Justice Block Grants to support pollution reduction and climate resilience in EJ communities.

Jobs

The IRA has started the US clean energy economy, creating thousands of jobs. Some quick numbers of the numbers of jobs already announced and projected for the future:

·       Since the IRA passage, private companies have announced $64 billion in new investments in clean energy.

·       32% of all EV-related jobs announced since 2015 were announced in the 6 months immediately following the passage of the IRA.

·       101,036 new clean energy jobs were announced between August 16, 2022, and January 31, 2023.

·       Opportunity for up to 2.3 million new jobs if IRA investments are complimented by strong federal policy.

·       Tax credits in the IRA increase job quality in the renewable energy sector by incentivizing employers to meet prevailing wage and apprenticeship requirements.

Coastal Resilience

The IRA invests in climate and coastal resilience, as well as fortifies flood infrastructure to mitigate the impact of sea level rise and extreme weather events. This is particularly crucial for coastal communities, including those in Florida, who have already experienced significant damage from hurricanes and are at risk of losing properties and livelihoods due to rising sea levels.

·       The IRA includes $2.6 billion in funding NOAA for coastal restoration. 

·       Additionally, there will be $500 million for grants through the Safeguarding Tomorrow through Ongoing Risk Mitigation (STORM) Act of 2020