Joe Biden’s Inflation Reduction Act is the largest and most ambitious initiative in the country’s history to combat global warming.
In a historic move, the US Senate yesterday passed the Inflation Reduction Bill, which includes a $370 billion environmental package to combat global warming and encourage the adoption of renewable energy. Joe Biden’s initiative is the largest and most ambitious investment in clean energy in US history.
The bill was considered controversial in the Senate, demanded agreements with representatives of the fossil fuel industries, and yet, after 27 hours of debate over the weekend, the vote ended in a tie (50 votes in favor and 50 against).
All the Republican senators voted against, while the Democrats and two more independent members gave their approval. The approval only came with the mining vote of Senate President and Vice President of the United States, Kamala Harris. The proposal still needs to go through the Chamber of Deputies, which could happen next Friday (12), where it should pass more easily through the Democratic majority.
For Natalie Unterstell, president of the Talanoa Institute, the American initiative is an event of seismic proportions on the global climate agenda and could set the tone for the market and other strong international competitors.
“Symbolically, if the United States moves, the whole world moves. Now imagine China thinking about the reaction to the internal American movement? The fossil fuel domino could start to fall faster,” Unterstell said in his column on reset.
The approval of the climate package represents a significant victory for Joe Biden, who tries to bring the US closer to the climate agenda that had been completely abandoned during the Donald Trump administration. It also comes at a good time, before the midterm elections, in the second half of the year, when the Republicans can regain control of Congress.
What is the US climate package
The aim of the US climate package is to create a greater supply of renewable energy to curb inflation, recently driven by rising fossil fuel prices with the Russian invasion of Ukraine.
The law provides tax incentives for the population to buy low-carbon technologies, such as electric cars, and accelerates the construction of wind and solar energy parks across the country. About US$ 60 billion will be allocated to recover areas degraded by pollution and “extreme weather events”.
To finance the initiatives, the law establishes an increase in corporate taxes and on excess emissions of greenhouse gases.
On the other hand, oil companies will benefit from a guarantee of space on land and at sea in the coming years – concessions that had to be made for the package to move through Congress. The US government also asserted support for the production of nuclear energy.
With the climate package, the US intends to cut its greenhouse gas emissions by the end of the decade to a level 40% below the 2005 level. This reduction helps to implement 80% of the climate target for 2030.