Senate Passes Inflation Reduction Act—with a Side of Climate

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After a bit of “will they, won’t they,” the U.S. Senate passed the Inflation Reduction Act (IRA). It now heads to the House where it’s expected to pass as well, and then it’s on to the President’s desk for his J. Biden Hancock. 

The Senate vote was far from a blow-out. After a 50-50 tie, VP Kamala Harris cast the deciding vote. Speaker Pelosi has said she’ll be encouraging House Democrats to vote for the bill as-is.

While the bill’s title is focused on inflation, the funding in the bill is mostly targeted at energy and climate investments, with $369 billion of the total $430 billion in those categories. It contains incentives and tax credits related to emissions-free energy, electric vehicles, nuclear power, clean hydrogen, and more. Goals of the bill’s measure include:

  • Lowering the cost of renewable energy solutions for consumers

  • Promoting the development of domestic clean energy manufacturing capacity

  • Supporting climate solutions to decarbonize industry

  • Investing in climate resilience and mitigation initiatives in disadvantaged communities

  • Easing inflation and decreasing the federal deficit

Some highlight line items from the bill include: 

  • $5 billion for the Environmental Protection Agency for reducing climate pollution

  • $6 billion toward community-led environmental health initiatives

  • $80 billion for the IRS to pursue those who dodge what they owe

  • $60 billion to accelerate domestic manufacturing of clean energy and transportation technologies

  • $9 billion in consumer home energy rebate programs

  • $27 billion to accelerate clean energy tech development

Unlike many climate-related bills, the tax incentives in the IRA will be in the tax code for 10 years, with no need to vote to extend them every couple of years. 

While hiding it behind the veil of inflation might not be what activists wanted for one of the largest legislative climate initiatives, it seems they’ll take it. 

Climate Tech VC founder Kim Zou said of the bill, “There’s benefits across the climate capital landscape, and that in and of itself is beneficial because of the intersectional nature of climate tech.” 

Watch the House of Representatives for a vote, which is expected today (Friday, August 12).