On Friday, August 12, The US House of Representatives joined the US Senate in passing a transformative bill that provides the most spending to fight climate change by any one nation ever. It is headed to President Biden’s desk, and it seems likely he’ll sign it this week. The crux of the long-awaited bill is to use incentives to spur investors to accelerate the expansion of clean energy, speeding the transition away from the oil, coal, and gas that largely cause climate change. The 10-year, $739 billion package will raise taxes on certain corporations while reducing the deficit by about $100 billion over the next decade.
Some Americans may not realize that it is the United States (rather than India or China) that is responsible for the most heat-trapping gasses into the atmosphere, from burning dirty fuels, than any other country. This bill, called the “US Congress Inflation Reduction Act of 2022” notably includes almost $375 billion designed to substantially reduce costs of renewable energy at home, on the highways and in the factory. Together these investments will help shrink U.S. carbon emissions by about two-fifths by 2030 and should chop emissions from electricity by as much as 80%.
“This legislation is a true game-changer. It will create jobs, lower costs, increase U.S. competitiveness, reduce air pollution,” said former Vice President Al Gore, who held his first global warming hearing 40 years ago. “The momentum that will come out of this legislation, cannot be underestimated."
Because of the specific legislative process in which this compromise was formed, which limits it to budget-related actions, the bill does not regulate greenhouse gas emissions, but deals mainly in spending, most of it through tax credits as well as rebates to industry, consumers and utilities.
According to Leah Stokes, an environmental policy professor at the University of California, Santa Barbara, investments work better at fostering clean energy than regulations. The climate aspects of this bill is likely to spur billions in private investment, she said: “That’s what’s going to be so transformative.”
While the bill specifically promotes vital technologies such as battery storage, clean energy manufacturing generally gets a big boost. It will soon become cheaper for consumers to make climate-friendly purchasing decisions. There are also tax credits and incentives to help low-income people with energy-efficiency upgrades. And farmers will receive help switching to climate-friendly practices.
For Cruz Foam partners in a variety of vertical industries, tax credits and incentives are available to transition from producing single-use plastic packaging to circular materials utilizing their existing supply chain. For partners with non-packaging use case scenarios, other climate-related tax relief is also possible. For example, agricultural companies transitioning to our circular grow media can apply for other tax relief. At the waste end of the Cruz Foam lifecycle, anaerobic digestion of compostable materials like ours produces clean energy such as biogas and electricity as a byproduct. The opportunities and possibilities created are extremely exciting!