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Three Things to Know about the Inflation Reduction Act

Sen. Ed Markey, Rep. Pramila Jayapal, and Rev. Lennox Yearwood Jr. spoke with Dr. Leah Stokes about what’s in the Inflation Reduction Act, why it matters for climate change (and must pass), and why it’s also an imperfect compromise.

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Climate in Congress

Check out these three essential excerpts from a live “Evergreen Explains” event hosted by Evergreen Action and A Matter of Degrees podcast. Guests Senator Ed Markey, Representative Pramila Jayapal, and Reverend Lennox Yearwood Jr. had a wide-ranging conversation with host Dr. Leah Stokes about the major climate investments in the Inflation Reduction Act, why the bill matters (and must pass), and why it’s also an imperfect compromise. 

This transcript of three key moments from the event have been edited for length and clarity. 

What’s the Bill’s Climate Impact? How Will It Save Americans Money?

Dr. Leah Stokes: So, today, we're here to talk about the Inflation Reduction Act of 2022. It's a new thing in some ways, it's an old thing in other ways, right? We've already worked on this bill in many ways in the House when it was Build Back Better, but now it's a new thing and there's been some new provisions that aren't so great added to it. But we still have retained a lot of the really fantastic things that the House worked so hard on. There's a lot of critical climate investments and clean energy investments in this bill, almost $370 billion. And, you know, it's really hard to break it all down. I don't think we're going to be able to, because there's a lot of different programs in this bill. 

If you want to understand what's in it, I would really recommend this Evergreen explainer about the climate impact of the Inflation Reduction Act. So Representative Jayapal, let's turn to you first. Could you talk about what these climate investments would mean for everyday Americans, how it would help everyday Americans save on their energy bills, and what it will do to help us address the climate crisis?

Rep. Pramila Jayapal: Absolutely. First of all, I’ve got to do a little brag on the Congressional Progressive Caucus because, as you know, we have a hundred members and if it wasn't for us in the first round, we never would have had a reconciliation bill with many of the good provisions that are contained within this bill. If you remember, when the infrastructure bill came to us from the Senate, it was passed with a lot of bipartisan votes, but there was no bill for what we were calling at the time Build Back Better, that was the climate investment. And the Progressive Caucus really stood up, time and time again, to make sure that we got a bill negotiated, we got a bill drafted, and we got a bill passed in the House. And now, finally, the Senate is coming along. 

And, yes, it's not quite everything that we had put in there, but it is a significant step forward. This bill contains billions of dollars worth of consumer-facing incentives that would help us to reduce emissions and energy bills. And, the studies that we've seen have shown that 41 percent of inflation has been driven by fossil fuels. So when we talk about this bill making investments in clean energy, remember that that is one of the biggest components of price increases that consumers are facing. So that's a really, really important point. 

How does it do the work that it does? It includes tax credits that will make it cheaper for low- and middle-income Americans to get clean energy technologies like an electric vehicle or a heat pump or an induction stove or any of the other technologies that are out there. And if people adopt those technologies, it not only reduces emissions—and the estimate is that it will reduce carbon emissions by 40 percent by 2030. And that does not take into account the accelerator effect that researchers are now showing. 

"This bill contains billions of dollars worth of consumer-facing incentives that would help us to reduce emissions and energy bills... If people adopt these technologies, it will save them an average of about $1,800 a year on energy bills."

Rep. Pramila Jayapal

If people adopt these technologies, it will save them an average of about $1,800 a year on energy bills. So it's directly combating the high cost of these fossil fuels that are passed on to the consumer. And the benefits for my constituents and, really, for the whole country, go beyond the direct investments. There are researchers from Oxford that have just released some studies that have found that the more renewable technology that we build​​—technologies like solar panels and wind turbines and electric vehicles—the cheaper they get to produce. This is not the case in the fossil fuel industry, where prices have basically remained the same for about 140 years, if you adjust for inflation. 

But the Inflation Reduction Act puts this massive investment into renewable energy that will dramatically lower renewable energy costs by more than just the monetary value of the tax credits. And that will accelerate the declining cost of renewable energy for decades to come, which will save Americans money well beyond the expiration of the tax credits. And it'll create a tipping point where clean energy ultimately will decline and cost well-below what we currently pay for fossil fuels. 

Now, it also includes $4 billion for environmental justice initiatives in historically disadvantaged communities that have faced the worst effects of climate change. That's a huge priority for me and my constituents because we have a lot of areas in and around the district that have experienced the harms of air pollution, heat waves, wildfires, and Superfund sites. So if you really look at the totality and if you look at all the different places,where we're investing in environmental justice, that the amount is closer to about $60 billion for environmental justice initiatives. And so all of these different components when you put them together will be the biggest investment in taking on the climate crisis, protecting our people, protecting our planet, and doing it with justice for the most disadvantaged at the center. 

This Bill Isn’t Perfect. What Are the Compromises?

Dr. Leah Stokes: We don't want to dismiss the fact that this bill is a compromise, right? It's not the bill that you would have written. It's not the bill that I would have written. It's not the bill that Representative Jayapal wrote, which passed the House. It had to be one that got the approval of Senator Joe Manchin. We always knew that, and we know what his interests are. They're not the same as mine and yours, or really the climate movement’s. 

So, there have been some really not great provisions added to this bill, particularly leasing requirements that are going to particularly impact frontline communities. And you know, we have to hold that reality and talk about that. So holding these two complex feelings or two complex realities at the same time: We've also seen a bigger environmental justice investment in this bill than we've ever seen before, with the $60 billion. So, how are you grappling with that, with those two things at the same time, how does that make you feel sort of, or about the bill overall? What do you think about it?

Rev. Lennox Yearwood Jr.: Well, you know, one of the things I think is important that we need to look at, I think as a movement—we may want to take a step back even before we get to the policy, and how this policy was created. I think as a movement, we have to do a better job. And I think our success is in that. I think the more that we come together, as one, in more solidarity, then I think it will make it harder for those to break down what they want to do. And so, I think there needs to be an acknowledgement, as you're rightfully putting forth.

We have to acknowledge that, particularly those in the Gulf Coast, those in the Arctic, have in their own words, been thrown under the bus. They feel that. They feel that pain. They feel that trauma. Many of us, when we first heard about this, in our exuberance, in our excitement, didn't take in their pain as a movement. So I think we need to acknowledge that first. I think we need to acknowledge that how this came about, what was done, not even the policy, us as a movement, as a collective, as a family, as a community—we didn't do good. We still need to do some things to fix that. That's the first step. 

"The mandates in this are historic, and it does create a historic climate deal, but we cannot stop there. We have to make sure our movement understands that we're not throwing them under the bus at this critical time."

Rex. Lennox Yearwood Jr.

Secondly, I think that because of that, Senator Manchin and others in the fossil fuel industry took advantage of that. I think that these provisions are going to hurt many of the communities that are vulnerable frontline fenceline communities. And so we need to have those conversations about what needs to be done in that regard. Particularly how it links in both the advancement of clean energy along with the fossil fuel components. 

So with that being said, though, I think this is the thing: Politically, the one word that I've been giving this is "momentum." As someone who was there in 2010 with the ACES, with the Waxman-Markey bill, I remember where we were. And it was actually after, we needed things from the movement to keep us going. When that bill failed—it was kind of the process between the Keystone XL Pipeline and also the Beyond Coal campaign that was taking place with Sierra Club and many others—that helped push things forward at that time. And then groups came on board that really kept it going. 

I think we need to do the same thing here. Even though this legislation that we need to get to be as strong as possible, that doesn't mean that we're still not fighting [for President Biden to declare] a climate emergency. It doesn't mean that we're still not fighting for legislation that can come behind this that can really look at how we're funding these fossil fuel projects through the finance aspects. And I do think there are some things that are coming out now that we have to also look at— the Mountain Valley Pipeline that we have to look at ourselves in the mirror and say, “Listen, we have to bring us all together and say we're going to fight. We're going to push.” The mandates in this are historic, and it does create a historic climate deal, but we cannot stop there. We have to make sure our movement understands that we're not throwing them under the bus at this critical time.

What Does the Bill Mean for Jobs and for Communities?

Dr. Leah Stokes: You know, this is really about a first step in the right direction. And one thing that's in the bill is of course, an enormous amount for manufacturing in the United States for wind and solar and batteries and heat pumps—my personal favorite. Oh, and electric vehicles. How could I forget? That's going to create manufacturing all across this country. Good-paying jobs, hopefully union jobs. 

Senator, what's the one thing you really want people to take away from the bill? Like if they only really understood one thing at the end of this event, what do you think is a really key takeaway?

Sen. Ed Markey: Our goal has always been three parts. One: Dramatic reduction in emissions. It does it. Two: Creating millions of jobs, most of them union. It does it. And three: Spending tens of billions of dollars, $60 billion to remediate environmental injustice. It does it. So that's the test and it passes the test. 

And for me, I've been working hard to make sure we have domestic production of solar, domestic production of offshore wind technologies in the United States. I worked hard with Sheldon Whitehouse to keep getting the offshore wind tax break extended and extended, in fits and starts, and we got it done, but nothing like this bill. It's 10 years guaranteed. And nothing like this bill because I was able to get in $10 billion to have domestic American production of the technology. Not imported from China, not imported from some other places. We'll do it here, made in America with union workers. 

And there's also, which doesn't really get mentioned that often— you know, we talk about the tax rates for wind and solar in cars and batteries, but this is a $27 billion climate bank. And that's something I put in the bill and it's $27 billion that is going to be used to give out low-interest loans all across the country. McKinsey—Capitalism, Incorporated—McKinsey says that for every dollar that comes out of the climate bank, it's going to unleash $7 to $10 in private sector investment. So then we're talking like another $250 billion in investments in our country. 

"Our goal has always been three parts. One: Dramatic reduction in emissions. It does it. Two: Creating millions of jobs. Most of them union. It does it. And three: spending tens of billions of dollars, $60 billion to remediate environmental injustice. It does it. So that's the test and it passes the test.

Sen. Ed Markey

That will be a small town in Ohio just saying, “We want to completely do-over our public housing stock.” “Okay. Good, come to the climate bank. We'll make sure you get the funding to do it, to the highest possible energy efficiency standard.” 

Or a community that wants to install solar panels on their city or town dump. “Oh, come to the climate bank, we'll help you to finance it so that it's affordable for the private sector to come in and to do it.” 

So it's a provision that's kind of hidden but it's close to eight percent of the whole bill in terms of the funding that's there. And ultimately it has a potential to have an explosive clean energy response in thousands of small towns all across the country who can apply. It can be the poorest towns that need the money the most and have always been wondering, “Where is that going to come from?” And the climate bank will be there to help them. So it's something that I feel great about. Doesn't get the attention, but it's right up there with these other provisions in terms of the magnitude of the historic impact which it’s going to have.

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