A US government bill that promises to slash the nation’s emissions by 40 per cent has won the crucial support of centrist Democrat Senator and former coal company owner Joe Manchin, in a political breakthrough that could signal a shift in momentum in climate action, both in America and globally.
West Virginia senator Manchin and senate majority leader Chuck Schumer on Thursday agreed to a reconciliation bill including $369 billion in investments to decarbonise the US economy, slash electricity bills, boost electric vehicle uptake and drive energy efficient housing.
The Inflation Reduction Act paves the way – largely through a change in wording – for major tax credits to fast-track massive new solar and wind energy development and sets aside $US30 billion for states and utilities to help the transition to renewable electricity.
The stock market celebrated the news, lighting a fire under clean energy stocks, including those proposing new storage technologies.
At the household level, the legislation includes a tax credit worth up to $US7,500 for new electric cars and a $9 billion scheme to electrify low-income households and make them more energy efficient.
According to the Rocky Mountain Institute, credits for clean electricity sources — ramping up use of more wind and solar over the coming decade years — will save US households up to $5 billion within two years by providing cheaper power.
RMI Utility Transition Hub says the package also includes $60 billion of environmental justice investments and financing and nearly all tax credits include a bonus for economic development in low-income or disadvantaged communities.
On emissions, the bill aims to cut US emissions by 40%, which RMI says will give America “a fighting chance” to meet its 50-52% Paris Agreement target.
The bill also makes strong investments to monitor and reduce methane leaks and to establish a clean hydrogen industry.
And while the bill still has to make it through the senate, Manchin’s support – by no means guaranteed from a man who has made millions from the fossil fuel industry – was critical, because it will need all 50 Democratic votes to pass.
“This breakthrough is incredible news and gives us much needed hope,” said Johanna Chao Kreilick, president of the Union of Concerned Scientists.
“With communities reeling from extreme heat, record drought and wildfires right now, this announcement is more than welcome news. It’s a relief. Science and justice must be at the forefront of the transition to clean energy.
“Now let’s get legislation passed as soon as possible and signed into law.”
On the down-side, the deal with Manchin ensures that the bill does not rule out new fossil fuel projects.
“They wanted more energy, I want more energy, we’re going to be producing more energy,” Manchin said in interviews following news of the landmark deal.
“There’s an agreement that we’re going to be drilling and doing more than we can to bring more energy to the market that reduces prices,” he said.
“[It’s] a great opportunity,” he said on CNN on Sunday morning. “It’s not a Democrat bill, it’s not a Republican bill, it’s definitely not a ‘green’ bill, it’s a red, white and blue bill.”
The hope is that Senate will vote to approve the bill before they go on summer recess at the end of this week.
