President Joe Biden signed the Inflation Reduction Act, a bill that seeks to invest nearly $400 billion toward domestic clean energy use across the U.S. The signed bill now represents the highest investment in climate action in America’s history. The amount will come in form of tax credits to persuade homeowners and individuals to use clean energy to survive climate change.
If all goes according to plan, the bill will help the U.S. cut its emissions by 40% by 2030. Further, it will support the growth of the local green energy industry, making America resilient to external energy problems. The bill is heavy on tax credits and rebates, enticing Americans to buy electric vehicles, install heat pumps and use better insulation in their homes. Such actions will in turn be awarded hefty tax credits in real money. The government views this as a way of accelerating the transition from fossil fuels to clean energy.
“It’s basically just a big green light for everyone — for the consumer, for the companies making these products, for building owners, for utilities, everybody — to start doing this stuff,” said Ben Evans, federal legislative director of the U.S. Green Building Council. “And we think that’s really going to change these markets. I don’t think it’s an overstatement to call this historic.”
Gernot Wagner, a climate economist at Columbia Business School says that a bill is a psychological tool. He argues that the tax rebates and credits play with the pychology of the consumer, enticing them to go for clean energy, which now looks cheaper.
President Biden, on the other hand, has been unable to implement most of the climate plans that got him into office. He has had to battle with a divided house plus court rulings that have made his work impossible. As a result, he has decided to play this, though it is fair to say it isn’t an end all be all to climate change.
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