Schumer-Manchin Reconciliation Bill: Climate Change Provisions

Sen. Joe Manchin (D-WV) leaves the U.S. Capitol following a vote, on Capitol Hill in Washington, February 9, 2022.

Tom Brenner | Reuters

Senate Majority Leader Chuck Schumer, DN.Y., and Sen. Joe Manchin, DW.V., unveiled a long-awaited reconciliation package on Wednesday that would invest hundreds of billions of dollars to fight climate change and advancing clean energy programs.

The 725-page bill, called “Inflation Reduction Act of 2022“, provides $369 billion for climate and clean energy provisions, the most aggressive climate investment ever by Congress. The bill’s climate provisions (summary here) would reduce the country’s carbon emissions by about 40% by 2030, according to a summary of the agreement.

The abrupt announcement of the deal came less than two weeks after Manchin, a key centrist who holds the Senate swing vote 50-50, said he would not support any climate provisions until he had a better understanding of the inflation figures for July. .

If passed and signed into law, the law will include funding for the following:

Manufacture of clean energy products, including a $10 billion investment tax credit for manufacturing facilities for things like electric vehicles, wind turbines and solar panels, and $30 billion for production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical mineral processing. It would also include up to $20 billion in loans to build new clean vehicle manufacturing facilities across the United States and $2 billion to revamp existing auto plants to manufacture clean vehicles.

Reduction of emissions, including $20 billion for the agricultural sector and $3 billion to reduce air pollution in ports. It also includes unspecified funding for a program to reduce emissions of methane, which is often produced as a by-product of oil and gas production, and is more than 80 times more potent than carbon dioxide at warming the planet. ‘atmosphere. In addition, the law allocates $9 billion to the federal government to purchase clean technology made in the United States, including $3 billion to the United States Postal Service to purchase zero-emission vehicles.

Research and developmentincluding a $27 billion clean energy technology accelerator to support the deployment of technologies that reduce emissions and $2 billion for cutting-edge energy research in government labs.

Preserve and support natural resourcesincluding $5 billion in grants to support healthy forests, forest conservation and urban tree planting, and $2.6 billion in grants to conserve and restore coastal habitats.

Support to States, including approximately $30 billion in grant and loan programs for states and electric utilities to advance the clean energy transition.

Environmental Justice Initiatives, amounting to more than $60 billion to address the unequal effects of pollution on low-income communities and communities of color.

For individuals, a tax credit of $7,500 for the purchase of new electric vehicles and a credit of $4,000 for the purchase of a new vehicle. Both credits would only be available to low- and middle-income consumers.

“I support a plan that will advance realistic energy and climate policy that lowers prices today and invests strategically in the long term,” Manchin said. said in a statement Wednesday. “This legislation ensures that the market will take the lead, rather than ambitious political agendas or unrealistic goals, in the energy transition underway in our country.”

The Senate is due to vote on the bill next week, after which it will go to the Democratic-controlled House of Representatives.

President Joe Biden said Wednesday that tax credits and investments for energy projects in the deal would create thousands of new jobs and help lower energy costs, and urged the Senate to pass the legislation as soon as possible.

The president has committed to reducing greenhouse gas emissions in the United States 50% to 52% below 2005 levels by 2030 and achieve net zero emissions by mid-century. Without a reconciliation bill, the country is on course to miss this goal, according to a recent analysis by independent research firm Rhodium Group.

“This is the action the American people have been waiting for,” the president said. said in a statement Wednesday. “It solves the problems of today – high health care costs and global inflation – as well as investments in our energy security for the future.”

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