At a time when states and countries – including Minnesota – are struggling to cut greenhouse gas emissions at the scale needed to stave off climate catastrophe, the announcement that U.S. Senate Majority Leader Chuck Schumer and Senator Joe Manchin have cut a deal for unprecedented and transformative investment in climate action is just the kind of good news we need.
While not a perfect bill – it contains significant giveaways to certain fossil fuel interests – the Inflation Reduction Act would steer $369 billion toward protecting our future. If passed, it would invest in greening the many sectors – industry, energy, agriculture, and transportation – that are the largest sources of climate pollution. It would deliver cost savings and energy stability to consumers to combat inflation. It would make communities across the nation cleaner, healthier and safer places to live.
Most importantly, this legislation would cut carbon emissions. The bill’s authors and backers estimate that it would lead to a 40% reduction in U.S. emissions by 2030 – as Senator Brian Schatz of Hawaii put it, “The planet is on fire. Emissions reductions are the main thing.” A 40% reduction in emissions isn’t enough to meet our needs or our national commitment to the Paris Climate Agreement goals, but it’s perhaps the biggest step in the right direction our country has ever taken. And it’s very good news for Minnesota.
The emissions picture
In the United States, transportation, electricity, and industry are the largest sectors for emissions, followed by buildings and agriculture. Transportation is a particularly stubborn sector, with the nation’s car-centric (not to mention plane-centric) infrastructure making it difficult to reduce tailpipe emissions. We have an easier path forward with electricity, given the massive decreases in wind and solar prices over the last few decades.
In Minnesota, which is the nation’s fifth-largest agricultural economy, agriculture makes up a bigger part of the picture, though it also includes carbon-capturing forest regrowth. Despite passing what was then the nation’s strongest clean energy requirement in 2007, Minnesota has fallen behind in our emissions reductions goals. The recent construction of the Line 3 tar sands oil pipeline is an example of poor decision-making and part of a pattern of insufficient action to confront this crisis.
While we have technological and economic challenges to overcome to reduce these emissions to zero, the overall framework is no mystery. We need to simultaneously:
- reduce the amount of energy we use
- convert the energy we still need to electricity (or other clean forms of energy) everywhere it can be done
- generate that electricity from zero-emission sources
- eliminate stray emissions sources like methane from fossil fuel extraction, and
- restore natural systems and carbon sinks like forests wherever we can.
It’s a big lift, and for years, the US and Minnesota haven’t had anywhere near the investment needed to make major progress. If Congress votes the right way, that’s about to change.
A really big deal
Minnesota’s U.S. Senator Tina Smith, who has worked persistently for months to make this deal happen, tweeted about the deal, “$370B for climate and energy and 40% emissions reduction by 2030. BFD.” We agree with that assessment, and not just because of the level of investment – how it invests matters.
As the graphs above show, homes generate a lot of emissions from heating and cooling, a problem that’s growing with more extreme weather events from climate change. Because so much of this heating and cooling is powered by fossil fuels, it’s subject to price shocks and is a big driver of inflation. For that reason, the bill invests billions in rebates, tax credits, and grants for Americans to make their homes more energy-efficient and powered by clean energy. In Minnesota, where homes are too often reliant on fluctuating natural gas supplies for heating, this is a move that will mean huge savings for consumers and families.
Efficiency goes hand-in-hand with electrification, and this bill includes billions for technology like heat pumps and other appliances. It also funds zero emission vehicles for entities like the Postal Service, waste and recycling services, and public transit agencies and helps to retrofit US manufacturing plants to produce those vehicles. Like fossil fuels, the costs of these products also impact inflation and scaling up production capacity will help to drive down costs and accelerate the industries we need.
Likewise, the Inflation Reduction Act also bolsters clean electricity generation, ramping up the production of American-made solar panels, wind turbines, storage technology, and future breakthroughs to generate power cleanly and affordably. It also makes changes to permitting procedures to help accelerate new clean energy projects.
Industrial emissions, making up about a quarter of the U.S. greenhouse gas mix, are heavy targets in the bill. Industries like chemicals, petroleum, cement, and steel are major climate offenders, and the bill would use tax credits and cleanup funds to cut these emissions significantly.
The bill includes natural carbon solutions as well, setting aside funds for forests that resist fire and sequester carbon, as well as coastal habitats at risk from rising seas. It also funds climate-smart agriculture and biofuels. Biofuels is a thorny issue – ethanol in particular has not shown itself to be a climate solution – but can also include new low carbon intensity crops developed here in Minnesota that can support healthy soils.
A key aspect of the bill is its investment in environmental justice, bringing benefits to communities of color and low-income communities that continue to suffer the brunt of climate impacts and pollution. The bill includes grants to support equitable transportation and address health impacts due to pollution, and targets clean energy tax credits toward disadvantaged communities.
Not perfect, but a way forward
As many climate justice organizations have pointed out, the Inflation Prevention Act isn’t a perfect bill by any means. Some provisions are generous to fossil fuel companies and other heavily polluting industries and will make their needed transition away from fossil fuels more difficult. Streamlining permitting for natural gas pipelines, for example, is not part of the solution. The bill also opens up additional lands to oil leasing. If this bill passes, these provisions should be reversed and all possible oil and gas left in the ground.
But this bill will get us moving at a time when we can’t afford to stand still. If it passes, it will do what it sets out to do – fight climate change, tackle inflation by cutting energy costs, and reduce the national debt by restructuring a number of federal taxes.
The fact that this bill is so close to becoming a reality is a testament to those who have worked for it. We owe thanks not just to the members of Congress that conferred in back rooms, but to the ordinary people: community members and grassroots organizations who spoke out, who protested, who voted, who made demands for climate action impossible to ignore. Their ideas, hopes, and passion have made this moment possible.
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