TOP STORIES Seven key provisions of the climate agreement

Seven key provisions of the climate agreement

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The climate and tax deal, announced by Senate Democrats on Wednesday, will funnel hundreds of billions of dollars into programs designed to accelerate the nation’s transition from a largely fossil-fuel-based economy to cleaner energy sources.

The legislation, called the Inflation Reduction Act of 2022, is very different from the ambitious multi-trillion dollar domestic policy and tax proposal that President Biden has been pushing for and that Congressional Democrats have been working to pass for more than a year.

What’s left is a reduced but still significant package born of a compromise between Democratic Senator Joe Manchin III of West Virginia and Senate Majority Leader Chuck Schumer, Democrat of New York.

Here’s a quick look at what’s in the bill, which Democrats hope to bypass Republican opposition in the Senate as early as next week.

The deal will provide billions of dollars in tax breaks over 10 years for companies that build new emission-free electricity sources such as wind turbines, solar panels, storage batteries, geothermal power plants or advanced nuclear reactors. Previously, Congress offered short-term loans for wind and solar power, which often expired in a year or two. The loans in the new bill cover any zero-carbon technology and will last for at least ten years, giving companies more confidence.

The bill also expands the tax credit for companies that capture and bury carbon dioxide in natural gas power plants or other industrial facilities before the gas enters the atmosphere and warms the planet, a technology that is rarely used today due to high costs. It will also provide tax incentives to keep existing nuclear power plants running. More than 13 reactors have been shut down across the country since 2013, and emissions often rise when they do because they tend to be replaced by fossil fuels. It will also provide grants and tax breaks to states and electric utilities to reduce carbon emissions.

The deal extends the popular consumer tax credit to $7,500 for the purchase of new electric vehicles and offers a $4,000 credit for used electric vehicles for the first time.

Only people who earn no more than $150,000 (or $300,000 for joint filers) are eligible for a new car loan, and those who earn no more than $75,000 (or $150,000 for persons submitting a joint declaration) for used vehicles. The program will run until the end of 2032. Credits will be available for new cars up to $55,000 and new pickups, SUVs and vans up to $80,000. Another $1 billion in the bill will go towards funding zero-emission school buses, heavy-duty vehicles, mass transit buses and other commercial vehicles.

The bill aims to reduce energy costs by investing $9 billion in rebates for Americans who buy and upgrade their homes with energy efficient and electrical appliances. It also includes a decade of consumer tax credits that will reduce the cost of heat pumps, rooftop solar panels, water heaters, and electric heating, ventilation, and air conditioning or electric heating, ventilation, and air conditioning technologies.

The package allocates $60 billion to U.S. clean energy production, including $30 billion in tax credits for solar panels, wind turbines, batteries and critical minerals, and $10 billion in investment tax credits for construction of production facilities for the production of electric vehicles and renewable energy sources. energy technologies.

These provisions are intended to stop and reverse the migration of clean energy production abroad to countries such as China. The bill also includes a $500 million investment under the Defense Production Act for heat pumps and critical minerals processing.

The bill will also set aside $27 billion for a “green bank” designed to roll out clean energy projects, especially in disadvantaged communities.

The bill also provides for the collection of fees for excess leakage of methane from oil and gas wells, pipelines and other infrastructure. Methane is a particularly strong greenhouse gas: although it dissipates faster than carbon dioxide, it heats the atmosphere many times more. Polluters will pay a fine of $900 per metric ton of methane emissions that exceed federal limits in 2024, rising to $1,500 per metric ton in 2026.

The bill would invest more than $60 billion to support low-income communities and communities of color that are disproportionately burdened by the environmental and health impacts of climate change. This includes grants for zero-emission technologies and vehicles, as well as money to mitigate the negative impacts of highways, bus fleets and other vehicles, and construction projects located near disadvantaged communities.

An additional $20 billion will be allocated to programs to reduce emissions from cows and other livestock, as well as farmland and rice production. According to the government, agriculture produces about 11 percent of the greenhouse gases emitted by the United States. The bill will also fund grants to support forest conservation, the development of fire-resistant forests and increased tree planting in cities, and the conservation and restoration of coastal habitats.
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Brad Plumer made a report.

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