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- Scoop Market Mysteries 8-21-22 (IRA Climate Bill)
Scoop Market Mysteries 8-21-22 (IRA Climate Bill)
🔎 Market Mysteries: Why is the Inflation Reduction Act a big deal for planet Earth?
Market Mysteries of the week
Why is the Inflation Reduction Act a big deal for Planet Earth?
Answer :
This past week, the US Congress passed the Inflation Reduction Act, which included a range of new taxation, healthcare, and climate initiatives.
Most of the bill's spending initiatives focused on transitioning the country to clean energy and reducing greenhouse gas emissions
, making it the most important climate legislation in US history.
Why are people calling the Inflation Reduction Act the "Climate Bill"?
While the bill's measures to increase corporate taxes and lower prescription drug costs were significant, the IRA most notably
. Even though it's only about
, it is
the most significant federal investment ever in combatting the climate crisis, incentivizing both innovation and mass adoption.
The core of the spending comes from
tax credits that incentivize businesses and individuals to transition to clean energy.
Tax credits are better than deductions because they decrease your tax bill, not your taxable income, directly maximizing your return. The bill
makes expensive electric vehicles (EV) more accessible for the average consumer
, offering rebates of
and $4,000 for a used one. Americans will also earn
tax credits to improve the energy efficiency of their homes
and switch to clean energy. The bill
and end their dependence on natural gas by installing electric heating and cooling systems. There's money for states to create training programs for contractors and incentives to
and batteries.
Beyond tax incentives, the climate bill also
pumps money directly into retiring fossil fuel power sources and renewable energy infrastructure
. The bill clears financial barriers for states to
and provides flexible funding to focus on emissions reduction projects. There's also flexible
funding to build out more nascent clean energy technologies
, like
and direct
, by as much as
. While carbon capture still has
in its current use,
, the
funding also makes room for agricultural carbon capture
. The act includes
, which improves biodiversity and natural carbon capture of the soil and plant life. We've highlighted the
in making our planet habitable.
What are people excited about?
The Inflation Reduction Act is
a landmark step by the world's largest historical emitter of greenhouse gas emissions to finally address the realities of climate change
. If you
, or if you've archived it in your brain for the sake of mental wellness,
we're running out of time to prevent a climate disaster
. Top scientists have already
. Implementing
the climate bill is projected to reduce our annual greenhouse gas emissions by 40% below 2005 levels
. While that's short of President Biden's
in line with the Paris Agreement, it's a significant acceleration from our current path of reducing emissions by only 24-35% in the next thirty years. It also
reestablishes American credibility
in the global efforts to battle climate change.
American businesses will benefit from the bill's
domestic manufacturing and production incentives.
While criticized for the
, the electric vehicle and clean energy tax credits focus on products
with materials sourced from US mines. The investment in US manufacturing is
.
The climate bill favors carrots over sticks to motivate the clean energy transition, but
one crucial new stick is the fee on methane gas.
Methane has
. The bill will allow the government to
produced above federal limits, limiting the production of this harmful greenhouse gas.
What are people worried about?
There's
whether the proposed legislation can achieve the projected emissions reductions by 2050
. Most of the projected emissions reductions would come from the
from fossil fuels to renewable power sources. If you've ever had construction on your street, you can understand the doubt about a
.
The most significant source of pessimism about the bill's climate credentials comes from
the accommodation of the fossil fuel industry
. As a clean energy bargaining chip, fossil fuel sympathizers pushed to include measures that
facilitate the development of oil and gas infrastructure
alongside the renewable projects. The bill
before the areas can be used for clean energy projects. These measures will likely result in a
near-term expansion of domestic energy production through fossil fuel extraction.
believe
the expansion of fossil fuel production outweighs the bill's benefits
,
. The bill directly allocates
, focused on helping communities
by electrifying transport trucks and shipping ports, improving civil construction, and
from
. However, activists say that
and marginalized communities will feel the
of the bill's fossil fuel compromises.
What's next?
Like everything produced through our democratic process,
this bill isn't perfect, but it's a substantial signal to the world that it's time to take climate change seriously.
Keep pushing for more legislation in your area and take advantage of the tax credits to shift your homes and vehicles to clean energy.
💙 The Share Scoops Team
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