A Glance at the Inflation Reduction Act

By: Mairi Pileggi, EAC Board Member

In coastal west Marin, the climate crisis will dramatically impact our coastal communities with rising sea levels, groundwater intrusion, drought conditions, wildfire, and increased frequency of atmospheric storm events. All of these factors will create challenges of coastal flooding, property and public infrastructure damage, erosion, and changes to beaches, cliffs, wetlands, riparian areas, and destruction of critical habitat areas that provide valuable ecosystem services. For this reason, it is critical that there is statewide and federal action to implement systematic changes to reduce greenhouse gases and adaptation strategies in our communities.

Climate scientists, activists, and politicians agree the Inflation Reduction Act (IRA), the most significant climate bill to date, is a crucial first step to reducing carbon emissions to at least 40% below 2005 levels by 2030. The $740 billion legislation is complex, but from a climate perspective, the overall goals include making the shift to decarbonization an equitable and easier transition and supporting the US clean tech industry. About $375 billion over the next 10 years will be allocated to climate projects. 

A key piece of the legislation will strengthen the Environmental Protection Agency (EPA)’s role in ending our dependence on fossil fuels. Specifically, the IRA defines carbon dioxide as an “air pollutant.” This definition, New York Times reports, “explicitly gives the E.P.A. the authority to regulate greenhouse gases and to use its power to push the adoption of wind, solar and other renewable energy sources.” 

Of interest to individuals are incentives for purchasing electric vehicles (EVs), home electrification, and energy-efficient properties. 

Before the IRA, only specific new EVs and plug-in hybrid electric vehicles qualified for rebates up to $7,500. Now eligible used cars qualify for rebates up to $4,000. Rebates on models from manufacturers who have reached their 200,000 caps, Tesla and GM, for example, have also been extended. Instead of waiting for a tax credit, rebates are now available when you purchase your car. Under the current program, however, additional restrictions on income level and car prices apply. In an effort to boost manufacturing in the US, only “vehicles manufactured in North America and powered by batteries whose materials are sourced from the U.S. or its free trade partners are eligible for rebates,” PBS reports.

The IRA has allocated $61 billion to address climate equity concerns, largely through rebates to low- and moderate-income households. As Rewire America notes, “provisions designated for disadvantaged communities, which include rural communities, Black and Brown communities, low-income communities, native and Tribal communities, and legacy energy communities. For electrification specifically, the IRA provides at least $57 billion to enable disadvantaged communities to electrify their homes and neighborhoods. These efforts will spur the creation of hundreds of thousands of good-paying jobs across every zip code in America, while also directly supporting workforce development.” 

The IRA addresses a myriad of problems from methane leaks in fossil fuel infrastructure to reducing air pollution through incentives for zero-emission school buses, garbage trucks, and US mail trucks, to funding for coastal and marine habitats. Although it also supports fossil fuel industry projects, the IRA is a positive move forward to reduce greenhouse gas emissions and protect the plants and animals that inhabit our planet.