Hope on the Horizon in Federal Climate & Energy Bill

A ray of light may soon break through the political storm clouds that have long overshadowed previous attempts to implement meaningful efforts to fight climate change at the federal level. The climate and energy bill proposed by Democrats in the U.S. Senate, which is part of the larger Inflation Reduction Act of 2022, would provide $369 billion to catalyze U.S. manufacturing while combatting climate change through economic incentives and tax breaks. This surprise development is especially welcome following last month’s U.S. Supreme Court ruling on West Virginia v. Environmental Protection Agency, which restricts the authority of the EPA and other governmental agencies to limit carbon emissions unless Congress votes explicitly to support such action.

The climate and energy bill aims to reduce national carbon emissions 40% by 2030. A collaboration of researchers led by energy modellers at Princeton University estimates that, by 2030, actions supported by the bill would advance the U.S. two-thirds of the way toward meeting its climate goals, reducing national emissions by the equivalent of one billion tons of carbon dioxide per year. In addition, according to the non-partisan Congressional Budget Office, through 2031 the bill will net about $300 billion in revenue and will reduce federal deficits by $305 billion, all while decreasing net taxes by roughly $2 billion per year.

As written, the key climate and energy provisions of the bill would:

  • Increase the availability and affordability of electric vehicles and EV chargers;
  • increase the availability and lower the cost of renewable energy to households, including solar panels and heat pumps;
  • extend by ten years the available tax credits for renewable energy, including solar and wind;
  • increase renewable energy production in the U.S.;
  • ramp up production of batteries and computer chips critical to producing EV’s and other electric-based systems and equipment;
  • impose fees on methane emissions resulting from the production of oil and gas;
  • allocate $60 billion to aid disadvantaged communities where most of our polluting infrastructure is situated, and who face the highest risk of flooding and other damage due to climate change.

Considering that more than 40% of the recent rise in inflation is due to the increased cost of fossil fuels, these initiatives would have an outsized impact on decreasing the proportion of household budgets paying for energy costs. Over 100 million households would see their energy costs decrease, especially among those who install heat pumps and who switch to electric water heaters and furnaces. (As more and more of our electricity is produced from renewable sources, switching to electrical appliances and systems gradually reduces greenhouse gas emissions.)

Significantly, the bill would do away with the cap on the number of EV’s that vehicle producers can sell by offering a $7,500 tax break to buyers of new cars, which would remain available through 2032. A ground-breaking tax incentive of up to $4,000 would be offered to those purchasing used EV’s. These tax credits will help to make EV’s more affordable for low- to moderate-income households who would not have otherwise been able to afford to purchase an EV, with an income-eligibility limit of $150,000 for couples and $75,000 for individuals. (According to the New York Times, the average cost of an EV is now $60,000.) Vehicles manufactured outside of the United States would not qualify for the tax credits, while those made in the U.S. (by any manufacturer) would qualify.

The impact of passage of this bill would be even more far-reaching when considering the $280 billion bill that has already been passed by the House and Senate to subsidize U.S. production of semiconductors (including computer chips), which have been in critically short supply since the start of the pandemic, thus limiting production numbers and raising the cost of EV’s across the auto industry.

As with most Federal bills of this size and scope, the climate and energy legislation comes with significant Faustian concessions to fossil fuel companies, including tax credits for controversial carbon capture technology and new leases for exploring carbon fuel sources in federal waters and lands. If there is any silver lining, it’s that the other provisions of the bill that support renewable energy and fight climate change will contribute to a reduced demand for fossil fuels over time, thus decreasing carbon emissions and both the need and value of leases.

As of this writing, all 50 democrats in the Senate have expressed their support for  the climate and energy bill. If Parliamentarian Elizabeth MacDonough approves the bill for reconciliation (thus eliminating the possibility of having the bill blocked by a filibuster), the bill could pass the Senate within a few weeks.

The 2022 climate and energy bill supports the installation of EV charging stations in disadvantaged communities. The station shown here is located at Woodstock’s East End Park. Photo: Michael J. Caduto.

What you can do:

  • Click here to contact Senators Patrick Leahy and Berny Sanders to express support for the climate and energy bill.
  • Click here to contact Representative Peter Welch to express support for the climate and energy bill.
  • Contact your legislators at the Vermont Statehouse to encourage strong actions on mitigating climate change: https://legislature.vermont.gov/people/
  • Encourage local government officials to push for net-zero energy standards on all municipal buildings that are being newly-built or renovated in the future.


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