Inflation Reduction Act: A Climate & Economic Equity Breakthrough


Citizen Action Explainer:

The Issue

  • We face a looming climate deadline: There is an overwhelming scientific consensus that we will trigger runaway climate change unless we start an immediate bold transition and to dramatically reduce greenhouse emissions by 2030 (a 45% net reduction from 2005 levels in greenhouse gas emissions).
  • Only the federal government can prevent catastrophe: Only the federal government has the financial resources to initiate the scale of change needed to avert calamity. Yet despite scientific certainty of catastrophic human-made climate change since the 1980s, the federal government has utterly failed to act to the scale of the problem and has often made it worse.
  • A Climate Conversation is a Historic Opportunity to Create a Just Economy: Embracing a green conversion, and building in the structural reforms of the economy needed to broadly distribute the economic benefits, creates an unparalleled opportunity to address the 40 year decline in the availability of living wage jobs for everyone who wants one, especially those in marginalized BIPOC, moderate income, and rural communities left behind by outsourcing, deindustrialization, and union-busting.
  • Catastrophic Climate Will Spark a Racist Genocide: If we fail to prevent runway climate change, we will unleash by far the biggest genocide in human history, with the highest proportion of death and destruction coming in the BIPOC majority countries of the southern hempesphere which have emitted a tiny fraction of greenhouse gases. Hundreds of millions of lives (and in the worst scenarios billions of lives) depend on what the U.S. and other wealthy developed countries do in the next 8 years.
  • Preventing Runaway Climate Change Requires Shifting Power from Corporation to the People: Our energy policies are dominated by corporate actors who only care about quarterly profits and stock values, such as the big for profit utilities and the fossil fuel industry. Workforce policies are dominated by big employers,not the democratic demand for economic equity from everyone left out of access to good jobs. Meaningful reform that addresses the climate crisis and opens up economic opportunity requires a massive power shift to our elected government and, whenever possible, to small scale democratic control in areas such as energy generation where utilities are monopolizing all electricity production..

Climate & Economic Equity Advances 

  • Massive Reduction in Emissions: Climate scientists project that the new law’s provisions will reduce U.S. greenhouse emissions by 80% of what is needed to meet the 2030 international benchmarks, reducing greenhouse gas emissions by 40% of 2005 levels by 2030.
  • Puts Us in Range of Meeting International Targets: State and local action, new private-sector investment decisions, additional regulatory actions, and economies of scale — all far likelier to occur as a result of this law — can realistically accomplish the remainder of the carbon-reduction goals set for 2030.
  • Emissions Reductions Vaslty Outweigh Increases: While provisions progressives oppose on oil and gas leasing were added by Senator Manchin in return for the last vote needed for passage, the emissions increases from these, in the worst case scenario, are outweighed 24 x 1 by the benefits of the climate provisions and could be outweighed by 80 x 1 in the best case scenarios (In the worst case scenario, for every 1 ton of emissions that could be caused by oil and gas leasing 24 tons of emissions will be eliminated by climate provisions of the act)
  • Passage Now Could Be Our Last Hope to Avert Climate Calamity: Given the looming deadline, and the possibility Democrats will lose control of the federal government for the next 2 to 6 years, it would have had genocidal consequences to reject this deal. The law as passed through the Senate budget reconciliation process (the only way to pass a law with 50 votes) had to pass by September 30th or we would have lost the opportunity to take any action before elections that could give climate denying conservatives control of one or both Houses of Congress.
  • Movement Building Advance: The Inflation Reduction Act is on balance, even with the painful concessions required for passage, the biggest step ever taken to address the climate crisis, meeting the Citizen Action’s strategic criterion as a movement building compromise which is a stepping stone to transformational reform.
  • We Have the Power to Do More if we Organize to Scale: As grassroots activists, we can improve the act by working to elect more progressives, and through local and state climate action planning, dramatically amplifying the impact in Wisconsin. But none of this will happen unless we work hard to build a bigger and stronger grassroots movement.

Major Economic Equity Impacts

  • Millions of Green Jobs: The Inflation Reduction Act will create up to 9 million new jobs—roughly 1 million jobs each year over the decade, according to independent estimates. Unions strongly support the bill, which creates the largest job growth in clean energy, efficient buildings, clean manufacturing, environmental protection and green transportation.
  • Incentives for Family Supporting Green Jobs: To ensure high pay and strong labor standards in the green economy, the bill offers tax credits for clean energy, manufacturing, and efficient building that are five times more generous than the base credit if firms pay prevailing wages in the construction and operation of the facilities and provide registered apprenticeships.
  • Energy Savings for all Consumers, more for low income and BIPOC communities: The average American family is estimated to see an annual $1,025 in energy savings, as new law tackles one of the largest drivers of inflation—oil and gas prices—by lowering fuel and electricity costs and giving tens of thousands of families who cannot afford it now access to improved energy efficiency. The energy burden is highest for low income BIPOC communities, which have lower incomes and older housing, so they will benefit the most from these savings.
  • Equitable Decarbonization: Through customer tax credits and rebates for low- and moderate-income Americans, the bill accelerates the rapid adoption of affordable heat pumps, new and used electric vehicles, rooftop solar, water heaters, induction stoves, and other green appliances to increase savings for American families. For working class communities, and especially margenelized BIPOC and rural communities, with the highest energy burden , the tax credits can cover the full cost of comprehensive energy efficiency upgrades and brand new appliances, and heating and cooling systems.
  • Major Investments in Environmental Justice. Roughly $60 billion of the Inflation Reduction Act’s outlays are set aside specifically for investments related to environmental justice, moving the United States toward the Biden Administration’s goal of dedicating 40 percent of climate-related spending to disadvantaged communities disproportionately harmed by climate change and pollution.
  • Accelerates Rural Climate Transition: The bill invests billions of dollars to assist rural co-ops and municipal and private utilities retire coal-fired power plants and move to renewable energy, improving air quality for frontline communities and saving lives.

Moral Obligation to Correct the Negative Compromises Required for Passage

  • Does Damage Frontline Communities: While the damage of the gas and oil leasing provisions of the law are vastly outweighed by the benefits overall, they do unjustly harm frontline communities on the Gulf Coast and the West who will feel the brunt of any new gas and oil drilling.
  • Need 2 More Senate Seats to Repeal. These provisions can only be addressed by building the power to win two more Senate seats (net gain), and then can be repealed. Wisconsin is one of the states that will determine if we build a governing climate majority in the Senate and  hold the house in 2022.
  • Organizing Leverage with Biden Administration: Implementation of these provisions could also be slowed if progressives can mobilize public pressure for the Biden Administration to slow walk implementation of new gas and oil leases.

Progressives Can Block Further Damage if We Mobilize: We must pressure progressive Senators and Members of Congress to oppose the reported “side deal” negotiated by Senators Manchin and Schumer. These far more damaging fossil fuel provisions must be passed through separate legislation.

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