The Senate climate bill may get you cheap energy, clean air, and a job
- Sen. Chuck Schumer and Joe Manchin agreed to a surprise $369 billion climate package on July 27.
- The bill could cut energy bills, make EVs affordable, create 1.5 million jobs, and save lives with cleaner air.
Senate Democrats could pass the most significant climate bill in US history this week, paving the way for cheaper energy and a more livable planet.
The surprise deal between Majority Leader Chuck Schumer and Sen. Joe Manchin of West Virginia would dole out about $369 billion for climate programs as part of the Inflation Reduction Act of 2022. It aims to expand renewable energy such as solar, wind, and cleaner fuels, while making it less expensive to buy electric vehicles and home appliances.
If Congress approves the bill, it would put the US on track to cut its greenhouse-gas emissions by up to 44% from 2005 levels by the end of the decade, according to multiple assessments. Experts say the bill also promises savings, health boons, and higher quality of living for everyday people across the US.
“This isn’t about the sky, or the polar bears,” Jonathan Foley, executive director of Project Drawdown, a climate nonprofit, told Insider, adding, “This is about you and your pocketbook, your jobs, the air your kids breathe, the town you live in, our national security.”
Here are five ways the new climate-change package could make your life better:
Lower energy bills
The new climate proposal includes about $30 billion in loans and grants for states and electric utilities to adopt more renewable energy, plus more than $60 billion in tax credits for manufacturers of solar panels, wind turbines, batteries for electric vehicles, energy storage, and other technology, according to a summary from Senate Democrats.
Solar and wind already generated cheaper electricity than fossil fuels, even before oil and gas prices soared this year. Yet they still only account for about 20% of US energy use. The Schumer-Manchin deal could speed up a shift away from fossil fuels and also make it less expensive to hook up your home with electric.
A total of $9 billion in home energy rebates would help Americans insulate their homes and replace stoves, furnaces, water heaters, and other appliances with electric alternatives. Homeowners could deduct up to 30% of installation costs from their taxes. A similar deduction for solar would be guaranteed for homeowners and expanded to residential battery storage.
“This is really about delivering lower energy bills for everyday Americans,” Leah Stokes, an environment and energy politics professor at University of California, Santa Barbara, said in a press briefing on Thursday. She noted that high oil and gas prices are a major driver of inflation that ripples across every industry, from transportation to manufacturing to agriculture.
“When fossil fuels go up, other goods and services go up,” Stokes said.
The average household could save $1,800 on their energy bill each year by installing a modern electric heat pump and rooftop solar and buying an electric vehicle, according to an analysis by Rewiring America, a think tank that promotes electrification.
Cheaper electric vehicles
The bill would extend an existing $7,500 tax credit for new EVs — offered as a discount at the point of sale — and offer up to $4,000 for used EVs and plug-in hybrids.
It would also lift the cap on the number of tax breaks automakers can offer, benefiting companies like Tesla, General Motors, and Toyota that already hit the limit, as long as the vehicle is assembled in the US.
“Once people own an electric car, they’re going to laugh every time they drive by a gas station, when they see $5 a gallon,” Foley said, adding, “I think this will help us reach a tipping point, where five to 10 years from now you won’t see gas cars sold anymore, or very few.”
There are some caveats, like your income, the vehicle’s price tag, and where its parts are made.
If you earn $150,000 or more a year, or $300,000 in joint family income, you won’t qualify for the new car tax credit. There’s a limit on the price of the car, too. Bigger vehicles, such as SUVs and pickup trucks, must cost less than $80,000, and smaller cars less than $55,000, to qualify for the credit.
For used cars, the income limit is $75,000 for single tax filers and $150,000 for joint filers. The sticker price must be $25,000 or below.
The bill also requires vehicle batteries to be made with 40% of minerals extracted or processed in countries the US has a free trade agreement with, or recycled in North America. But supply chains for those minerals don’t exist yet, E&E News reported. The majority of lithium, cobalt, nickel, and other minerals used in EV batteries come from China, Russia, and the Democratic Republic of Congo, although analysts told E&E News they hope the mandate spurs a made-in-America market.
Cleaner air to breathe
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