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August 17, 2022

Summary

›	The Inflation Reduction Act is helping oil and gas hubs chart a clean energy future, while committing billions to environmental justice.
›	The bill is expected to jumpstart the clean energy economy in the U.S. and boost domestic manufacturing by offering more support and certainty for investors.
›	The bill will also make household clean energy and energy efficiency upgrades more affordable.

Quote of the Week:

“[T]here is a real risk of perpetuating the status quo [with] most of that [Inflation Reduction Act] funding going to people who already have the capacity to apply for those grants, like wealthier cities,” said Sneha Ayyagari, Program Manager at the racial and climate equity nonprofit The Greenlining Institute. “We have such a widening racial wealth gap... It’s important to see how we can use this funding as a way to really deliver the economic, environmental and health benefits.”

CLEAN ENERGY

Must Be Equitable

Climate bill prompts oil & gas hubs to chart a clean energy future. The newly-signed Inflation Reduction Act (IRA) is poised to help transform oil & gas hubs across the country as it accelerates the U.S. shift to clean energy. The bill’s incentives and investments in reshoring the U.S. manufacturing sector aim to transform areas like coal-dominant West Virginia into clean energy hubs, the Washington Post writes, as new clean energy manufacturing projects are currently being developed across the state. In long-time oil & gas powerhouses like Louisiana, the Illuminator reports the bill’s provisions are likely to boost clean energy investment and demand from local industry while improving community health and lowering energy costs. (Louisiana Illuminator, Washington Post $)

Climate bill commits billions for environmental justice. The $369 billion IRA includes up to $60 billion in environmental justice investments, including projects that reduce climate pollution in disadvantaged communities, clean up industrial pollution sites, rebates for home electrification, and grants for community-led projects and transportation infrastructure. Advocates say the bill’s success will hinge on how it’s implemented, noting that governments must work closely and proactively with community organizations to ensure the funding goes to the right places. Still, advocates have also criticized provisions that expand fossil fuel drilling and permitting reforms that could expedite fossil fuel projects and pipelines. (Canary Media)

CLEAN ENERGY

Is Replacing Fossil Fuels

The U.S. economy is poised for a clean energy boom. On top of the IRA’s robust clean energy subsidies, the bill also authorizes the Energy Department to lend up to $250 billion to clean energy companies — giving the Department more power to shape the country’s energy transition. These loans and subsidies are designed to jumpstart private investment in key clean energy technologies, which studies say is critical for a complete energy transition. And since clean energy investment is broadly deflationary, the IRA could help strengthen the overall U.S. economy in the medium- to long-term. (Project Syndicate)

Climate bill will grow domestic EV manufacturing. Over the last few years, the auto industry has begun investing in U.S. electric vehicle and battery manufacturing to shore up supply chains and boost production to meet rising demand. Now, the IRA is expected to turbocharge these trends and grow U.S. manufacturing capacity by offering generous EV and battery tax credits for domestic production. While few EVs currently qualify for these credits, analysts say they will ultimately incentivize manufacturers to develop a robust domestic EV supply chain. (Axios)

CLEAN ENERGY

Is A Good Investment

Climate bill expected to spark a renewable gold rush. Experts say the IRA’s generous and long-term clean energy subsidies will give investors more confidence and certainty in the sector, and could help accelerate U.S. clean energy projects. Shares of renewable energy companies have soared since Democrats announced the bill. This policy stability, including support for a wide variety of energy sources, has even prompted utilities to claim they can accelerate their net-zero plans. (Reuters)

CLEAN ENERGY

Is Affordable

Climate bill will make clean energy cheaper. Thanks to a bevy of tax credits and rebates for consumer clean energy technologies like heat pumps, EVs, solar panels, and weatherization, the IRA is expected to make clean energy more affordable for American households. One-fifth of U.S. energy consumption and climate pollution come from homes, so household energy efficiency is a key focus of the bill. And since upfront costs are the main barrier to adoption for many of these measures, the generous incentives could help make clean home investments an easy choice for many Americans. (WIRED)

CLEAN ENERGY

Is Challenging

IRA’s oil & gas giveaways could undermine the energy transition. Despite Biden’s pledge to halt oil & gas leasing, the administration has gone ahead with new leases and the newly-signed IRA further ties clean energy production to expanded oil & gas leasing. Supporters say these provisions were necessary to secure the passage of key clean energy investments, and highlight that fossil fuel producers may not even use these new leases. But frontline communities and other advocates worry that marginalized communities could become sacrifice zones as a result of the trade-offs, and that expanded oil & gas production could threaten U.S. climate goals. (The American Prospect)