Landmark deal resets U.S. climate and clean energy goals and boosts prospects for global progress
Washington has reached a far-reaching agreement on clean energy and climate policy that dramatically improves the prospects for global efforts to prevent dangerous global warming. With $369 billion in tax changes and new spending, the deal would be historic, the largest and most ambitious clean energy investment in U.S. history.
Formally known as the Cut Inflation Act, the wave of investment promises to help secure a climate-resilient future by boosting a wide range of clean technologies – including electric vehicles and related infrastructure, super-efficient heat pumps, green hydrogen and fast-growing technologies. renewables, while reducing daily energy and transport costs.
For everyday consumers and businesses, these measures will help position the United States to thrive in the clean industries of the future. Global measurement is poised to make major progress on these fronts:
1. It Saves Americans on Energy Costs
As several analyzes of the RMI show, the investments proposed in this legislation will help combat inflation, since 41% of global inflation is directly attributable to fossil fuel prices and more than half of current inflation is due to supply-side factors, such as under-investment.
RMI found that credits for clean electricity sources — increasing the use of more wind and solar power over the next ten years — would save U.S. households up to $5 billion by two years. In addition, tax credits and rebates for building electrification and efficiency as well as tax credits for electric vehicles will significantly reduce Americans’ energy costs. It will also help protect against volatility, as the price of oil and gas has risen four to eight times over the past year.
2. It helps us fight climate change
The Cut Inflation Act is expected to cut US emissions by 40%, or four-fifths of our Paris Agreement target. These investments will also accelerate the climate work already underway in federal agencies, states, cities and localities, ensuring we have a chance of meeting our 50-52% Accord goal. from Paris. State RMI scorecards show that US states have a major role to play in closing the gap.
The bill makes significant investments to monitor and reduce powerful methane leaks and bring clean hydrogen to market, and offers a series of incentives to clean up our energy, buildings, industry and transports.
3. It empowers innovation and manufacturing in the USA
This legislation takes desperately needed steps to strengthen America’s supply chains through investments in advanced manufacturing, the extraction of critical minerals and new technological solutions. This is essential to ensure that the United States can build more electric vehicles, renewable energy resources, heat pumps, batteries and storage, which will create millions of new jobs and help revitalize American regions. RMI’s research shows that these solutions are essential if we are to compete globally, catch up with China and other countries in the clean energy race, and make ourselves less dependent on foreign imports.
4. He invests in American communities
This bill offers loans to communities on the front lines of the energy transition — like former Appalachian coal miners — that will spur opportunities for revitalization and increase opportunities for well-paying jobs. RMI analysis shows that energy transition programs like the one in this bill will reduce costs both for the communities themselves and for electricity consumers.
RMI’s Utility Transition Hub shows that the energy expenditure of low-income households is nearly 10 times higher than that of middle- and high-income households. This package includes $60 billion in environmental justice investments and funding and almost all tax credits include a bonus for economic development in low-income or disadvantaged communities.
5. It enhances our energy security, making us less susceptible to fossil fuel price volatility
This legislation moves us towards a stronger and safer energy mix, without over-reliance on technology that has led to price spikes in the past and even more so today.
As so much RMI research shows, the costs of renewables are falling and will continue to fall as they are deployed. These sources are essential to reducing long-term costs and paving the way to a future of clean, cheap and abundant energy.
It’s clear that this landmark climate and clean energy bill will have ripple effects across the country, creating a wave of new incentives, jobs and income when and where it’s needed. This agreement shows that the United States is betting on its future by recognizing that we can not only be competitive, but also be at the forefront of the vision of a zero-carbon and resilient economy of the future. It shows that our government believes in our citizens, our businesses, our cities and our states to innovate, fight climate change and deliver a better and prosperous future, as it should be.