The Inflation Reduction Act and the Environment

The House passed the Inflation Reduction Act on August 12, 2022. The legislation is the largest expenditure on tackling climate change. Democrats claim that it will reduce carbon emissions by 40 percent by 2030. 

“This is the ultimate clean energy comeback – the strongest climate action yet in the moment we need it most,” said Manish Bapna, president and CEO of Natural Resources Defense Council (NRDC). “This package will enable us to cut greenhouse gas emissions up to 40 percent by 2030. That’s a significant way toward the 50-52 percent cut Biden has pledged to avert a climate catastrophe.”

How the bill helps the environment

Here is a breakdown of how the Inflation Reduction Act will help the environment.

Decarbonize the economy

Achieving significant emissions reductions is only possible by decarbonizing the economy. The bill has tax credits to accomplish that include:

  • Tax credits for clean energy and energy storage and $30 billion in grant and loan programs for states and electric utilities to accelerate the transition to clean energy. 
  • Tax credits and grants for clean fuels and clean commercial vehicles. 
  • Grants and tax credits to reduce emissions from manufacturing processes, including $6 billion for a new Advanced Facilities Deployment Program to reduce greenhouse gas emissions from big industrial polluters such as chemical, steel, and cement plants.
  • Over $9 billion for federal procurement of American-made clean technologies, including $3 billion for the U.S. Postal Service to buy zero-emissions vehicles. 
  • $27 billion for clean energy technology accelerator. 
  • $4.5 billion in rebates for low- and moderate-income electrification. 

Energy efficiency

Energy efficiency lowers emissions and other pollutants while reducing water use. The bill contains new consumer rebates for buying and installing efficient electric appliances, including expanding the existing home energy efficiency tax credits and a rebate program for heat pump space heaters, heat pump water heaters, induction cooktops, and upgraded breaker boxes. 


Clean energy reduces greenhouse gas emissions and air pollution. The bill allocates over $750 million for agencies to do smart planning for clean energy projects. There are also clean energy tax credits and $30 billion in grant and loan programs for states and electric utilities to decarbonize the grid through investment in renewable energy and clean technologies. 

Clean transportation

The transportation sector is one of the largest contributors to greenhouse gas emissions in the U.S., accounting for 27 percent of all emissions. The investments in clean transportation include:

  • $4,000 consumer tax credit for lower/middle income people to buy used electric vehicles.
  • Up to $7,500 tax credit to buy new EVs.
  • $3 billion in grants to reduce air pollution at ports by purchasing zero-emission trucks and equipment.
  • $1 billion for zero-emission heavy-duty vehicles.
  • Almost $2 billion in grants for the Federal Highway Administration.

Methane emissions

Methane is a greenhouse gas with a warming potential of 80 times that of carbon. This bill will reduce methane emissions through a fee on the oil and gas industry for their methane pollution. It also includes a methane emissions reduction program with over $1.5 billion to reduce methane emissions. 

Environmental justice

People of color are more exposed to air pollution. An EPA study found that people of color breathe more particulate air pollution, which can cause lung and heart problems. The bill provides over $60 billion in environmental justice priorities.


The agricultural sector accounts for 10 percent of U.S. greenhouse gas emissions. With the right practices, farms can become a net sink of carbon, according to the Argonne National Laboratory. To help accelerate that the bill includes over $20 billion to support climate-smart agricultural practices. 


Most solar panels are made in China. Danish company Vestas is the largest wind turbine manufacturer. To encourage more clean energy manufacturing in the U.S., this bill provides over $60 billion. 


Forests are a carbon sink, which makes them a high priority in emissions reduction plans. The bill provides $50 million for mature and old growth protection and nationwide inventory. 

The Inflation Reduction Act increases oil and gas leases

Included in the bill are reforms that tie federal wind and solar development to required federal oil and gas leasing. It reinstates an offshore oil and gas lease sale conducted in the Gulf of Mexico, conducts two more lease sales in the Gulf and another in Alaska’s Cook Inlet, and mandates new offshore (60 million acres) and onshore (two million acres) leasing. “Continuing to prop up the fossil fuel companies that are responsible for the dual crises of inflation and climate change is the last thing we should be doing in the name of addressing these crises,” according to the Sierra Club.


Photo by Sander Weeteling on Unsplash

Gina-Marie Cheeseman
Gina-Marie Cheeseman
Gina-Marie Cheeseman, freelance writer/journalist/copyeditor Twitter: @gmcheeseman

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