Biden: Inflation Reduction Act represents ‘one of the most significant laws in our history’

Don’t be deceived by its name: the Inflation Reduction Act represents the most significant act combating climate change Congress has ever passed. On Tuesday, President Joe Biden signed the measure into law—injecting $370 billion into sustainability and energy initiatives over 10 years with the stroke of a pen. 

“This bill is the biggest step forward on climate ever,” Biden said, calling it “one of the most significant laws in our history.”

Through programs like direct consumer rebates of $14,000 to homeowners who purchase heat pumps or energy efficient appliances and a 30 percent tax credit for solar installations, among other incentives, the White House predicts a 1 gigaton reduction in greenhouse gas emissions within the decade (40 percent). An explanation sheet estimates 950 million solar panels will be installed through the funding, along with 120,000 wind turbines and 2,300 grid-scale battery plants.

The legislation has received support from organizations representing America’s cities and counties.

“This is a monumental day that mayors have been working toward for many years,” said 

Tom Cochran, executive director of the U.S. Conference of Mayors, said in a statement: “Mayors were among the earliest voices warning about the existential threat of climate change, leading the way for decades to curb harmful carbon emissions at the local level while urgently calling for strong federal action. And, today, the federal government has responded in a big way.”

Clarence Anthony, executive director of the National League of Cities, called the measure “an important step forward in our collective fight against climate change, and will help local leaders create more resilient communities in the years to come.” Practically, the act “will support critical investments in renewable energy and reduce greenhouse gas emissions,” he said.

The Inflation Reduction Act doesn’t only take action on climate change. It also caps medical spending at $2,000 for seniors and targets inflation. The Congressional Budget Office predicts it will reduce the federal deficit by $305 billion through 2031 by leveraging more than $100 billion in savings and another $200 billion of gross revenue from stronger tax compliance. It’s expected to be paid for via stricter auditing norms and policing of tax laws on those making more than $400,000 per year, and increased taxation on large corporations.

The mechanisms it leverages to help reduce emissions are complex and sweeping.

Along with incentives for consumers, the act allows tax-exempt entities like community-owned utilities, which didn’t previously qualify for incentives because they’re tax exempt, to claim energy tax credits directly. “APPA has long supported this approach, which will lead to lower costs, local jobs, and more equitable energy service for all customers,” reads a statement from the American Public Power Association.

A statement from the International Code Council about the measure notes it’s “the largest ever investment in building efficiency, sustainable construction and distributed generation.” The funding “will help communities update their energy codes, promote low-carbon construction materials, and encourage energy-efficient retrofits and distributed energy generation including solar thermal and small-scale wind,” the statement says. 

Building on $1 billion allocated to jurisdictions through the Infrastructure Investment and Jobs Act to update energy codes, “The bill makes further historic investments in sustainable construction, including $250 million through the U.S. Environmental Protection Agency for work toward enhanced standardization for low-embodied carbon construction materials through environmental product declarations.”

The measure also provides assistance for the manufacturing industry to more widely adopt environmental product declarations. 

“Making progress in this country— as big and complicated as ours—clearly is not easy.  It’s never been easy,” Biden said. “But with unwavering conviction, commitment, and patience, progress does come.”