The approximately $370 billion in climate and energy security provisions included in the budget reconciliation agreement reached by US Senate Democrats on Wednesday were reduced from prior versions of the bill, but were hailed by clean energy supporters.
Early drafts of the measure included $555 billion in tax credits for sustainable energy, including wind and solar electricity, as well as batteries and nuclear reactors.
Nonetheless, according to a summary issued by Senate Majority Leader Chuck Schumer’s office on Wednesday, the plan would reduce US emissions by 40% by 2030.
According to Leah Stokes, a professor of climate and energy policy at the University of California, Santa Barbara, who helped Democrats on the measure, the baseline for the decrease was 2005.
Clean energy supporters stated it would help President Joe Biden achieve his goal of decarbonizing the US economy by 2050.
“It’s an absolutely transformative package,” Stokes told Reuters. She said that the law will stimulate American manufacturing in everything from batteries to solar energy to electric cars, and that it would include the greatest environmental justice investment in history.
In a statement, Biden claimed the plan will “improve our energy security and tackle the climate crisis.” despite rising oil costs and record gasoline prices, which have contributed to inflation reaching 40-year highs.
According to Heather Zichal, CEO of American Clean Power, a collection of renewable energy producers, Congress is on the verge of adopting “the biggest climate and clean energy investment in American history.”
Democrats expect to approve the measure in the Senate with a simple majority. The law also has to clear the House, where Democrats have a slim majority, and be signed by Biden.
According to the synopsis, it includes a “methane emissions reduction program” to reduce leaks of the strong greenhouse gas methane from natural gas drilling.
It was unclear if the methane price that many Democrats sought on emissions, which would punish energy corporations for leaks, had been amended.
Senator Joe Manchin, a conservative Democrat and swing vote who has gotten more contributions from oil and gas firms in recent years than any other legislator, has advocated for businesses to avoid the tax if they were unable to construct a pipeline to transport the gas to market.
The plan, according to Manchin, would invest in hydrogen, nuclear power, renewables, fossil fuels, and energy storage.
“This bill does not arbitrarily shut off our abundant fossil fuels,” said Manchin, who has spent months advocating for the preservation of federal oil and gas lease projects and natural gas pipelines in bill negotiations.
“have committed to advancing a suite of commonsense permitting reforms this fall that will ensure all energy infrastructure, from transmission to pipelines and export facilities, can be efficiently and responsibly built to deliver energy safely around the country and to our allies.” he said.
The law includes more than $60 billion in environmental justice initiatives to combat pollution and address public health issues in low-income neighborhoods. The report also said that it has $20 billion for “climate-smart” agricultural methods.
According to the summary, the measure includes a $10 billion investment tax credit for clean technology manufacturing facilities for EVS, wind turbines, and solar panels.
It would also spend an estimated $30 billion in production tax credits to stimulate U.S. manufacture of batteries, wind and solar power components, and vital minerals processing.