On Tuesday, August 16, 2022, President Biden signed the Inflation Reduction Act (IRA) into law following months of negotiation. The legislation is the single largest climate investment ever made by Congress with $370 billion towards climate and energy related funding. These investments are projected to reduce greenhouse gas emissions to 40% below 2005 levels by 2030, making significant strides towards the nation’s Paris Agreement goals – a 50% reduction below 2005 levels by 2030. The Inflation Reduction Act will reduce emissions namely by speeding up the transition to clean energy with financial incentives, ultimately decreasing the cost of clean energy. The act also comes on the heels of the CHIPS and Science Act, a $280 billion package aimed at the American semiconductor industry. The Chips and Science Act could direct nearly $67 billion towards the growth of zero carbon industries and conducting climate research, making it one of the largest climate bills ever passed by Congress.
The Inflation Reduction Act also makes historic investments in natural climate solutions such as forestry and sustainable agriculture practices. These investments acknowledge the importance of forest landowners and farmers in climate solutions through land conservation, forest restoration, and climate friendly agriculture. Natural climate solutions will advance the nation’s carbon emissions reductions by implementing practices that improve soil carbon storage and decrease greenhouse gas emissions. The Inflation Reduction Act allocates $20 billion to four different programs under USDA’s Natural Resources Conservation Service. The programs provide private landowners with technical and financial assistance for voluntary conservation efforts on agricultural land, and projects with climate related goals will be a priority. The following programs will receive an influx of funding:
The IRA’s funding for forestry totals $5 billion and includes forest management, planning, and restoration activities for both federal and nonfederal forests. Of the $5 billion, $2.15 billion is directed to the National Forest System and includes:
- $1.8 billion for the National Forest System to support wildlife risk reducing activities
- $350 million for vegetation management, environmental reviews, and inventory of old-growth forests on National Forest System land
The remaining $2.75 billion in funding is for non federal forest management activities, including:
- $1.5 billion for the U.S. Forest Service’s Urban and Community Forestry Program, which supports urban tree cover that cools and fights pollution in cities
- $700 million for competitive grants through the Forest Service’s Forest Legacy Program, which permanently protects private forestland through conservation easements and acquisitions
- $450 million to help private landowners manage forests more effectively
The IRA also allocates $2.6 billion to NOAA to assist coastal communities in conservation, restoration, and protection efforts that increase climate resilience.
The Inflation Reduction Act includes several measures aimed at advancing environmental and climate justice. These programs promote legacy pollution reduction and accessible clean energy. Two programs of note are:
- $3 billion for Environmental and Climate Justice Block Grants (likely administered by the EPA), which invest in community-led projects in disadvantaged communities to address environmental and public health harms related to pollution and climate change
- $3 billion in Neighborhood Access and Equity Grants (administered by the DOT), which will fund projects that improve access to transit, walkability, and other infrastructure needs in disadvantaged communities
Several provisions related to clean energy and greenhouse gas emissions reductions offer incentives for disadvantaged or underserved communities. For example, the Greenhouse Gas Reduction Fund, a clean energy and sustainability accelerator funded at $27 billion, will allocate at least 60 percent of those funds towards disadvantaged communities. While the IRA does not address all environmental justice concerns, and federal agencies are still working on a concrete definition of “underserved communities,” the inclusion of EJ is seen as significant and an important step in the right direction.