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Focusing on heavy industry is crucial if the United States is to meet Mr. Biden’s goal of halving emissions from their levels in 2005 by the end of the decade.
What’s in the Inflation Reduction Act
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What’s in the Inflation Reduction Act
A substantive legislation. The $370 billion climate, tax and health care package that President Biden signed on Aug. 16 could have far-reaching effects on the environment and the economy. Here are some of the key provisions:
What’s in the Inflation Reduction Act
Auto industry. Until now, taxpayers could get up to $7,500 in tax credits for purchasing an electric vehicle, but there was a cap on how many cars from each manufacturer were eligible. The new law will eliminate this cap and extend the tax credit until 2032; used cars will also qualify for a credit of up to $4,000.
What’s in the Inflation Reduction Act
Energy industry. The legislation will provide billions of dollars in rebates for Americans who buy energy efficient and electric appliances. Companies will get tax credits for building new sources of emissions-free electricity. The package also includes $60 billion set aside to encourage clean energy manufacturing and penalties for methane emissions that exceed federal limits starting in 2024.
What’s in the Inflation Reduction Act
Health care. For the first time, Medicare will be allowed to negotiate with drugmakers on the price of some prescription medicines. The law also extends subsidies available under the Affordable Care Act, which were set to expire at the end of the year, for an additional three years.
What’s in the Inflation Reduction Act
Tax code. The law introduces a new 15 percent corporate minimum tax on the profits companies report to shareholders, applying to companies that report more than $1 billion in annual income but are able to use credits, deductions and other tax treatments to lower their effective tax rates. The legislation will bolster the I.R.S. with an investment of about $80 billion.
What’s in the Inflation Reduction Act
Low-income communities. The package includes over $60 billion in support of low-income communities and communities of color that are disproportionately burdened by climate change. Among the provisions are grants for zero-emissions technology and money to mitigate the negative effects of highways and other transportation facilities.
What’s in the Inflation Reduction Act
Fossil fuels industry. The legislation requires the federal government to auction off more public space for oil drilling and expand tax credits for coal and gas-burning plants that rely on carbon capture technology. These provisions are among those that were added to gain the support of Senator Joe Manchin III, Democrat of West Virginia.
What’s in the Inflation Reduction Act
West Virginia. The law is expected to bring big benefits to Mr. Manchin’s state, the nation’s second-largest producer of coal, making permanent a federal trust fund to support miners with black lung disease and offering new incentives to build wind and solar farms in areas where coal mines or coal plants have recently closed.
The industrial sector is responsible for about a third of U.S. emissions, and industrial emissions are projected to rise, with the sector becoming the largest producer of greenhouse gases within the decade, according to modeling by the Rhodium Group, a research and consulting firm.
But retooling plants to lower emissions can be expensive, and the concrete, steel and asphalt industries can be slow to change, industry experts say.
These industries have made some progress in lowering emissions: Concrete companies have worked to reduce the amount of cement in their recipes, the biggest polluter in those mixtures. Asphalt companies have been cutting back on binder, a residue from petroleum refining, and ramping up the use of recycled asphalt. And most steel manufacturers have installed furnaces that run on electricity.
But the Inflation Reduction Act — which puts $370 billion toward climate and clean energy programs — encourages them to do more.
The legislation’s $5.8 billion for an advanced manufacturing fund is intended to help speed decarbonization at industrial plants. The law singles out energy-intensive industries, including steel and concrete, as potential beneficiaries.
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