On the Cusp of Climate Policy Breakthrough

An ongoing, frustrating theme of 2022 has been continued lackluster government action in the face of overwhelming evidence the climate crisis is getting worse. The White House launches heat.gov to show us how hot it is, but what are they doing to stop it from getting more hot?

That is… until this week, it seems? Today, out of some back-room, Washington, DC ether pit emerges the U.S. “Inflation Reduction Act,” which, while designed to be an economic bill, enjoyably ends up being a climate bill because everything ultimately ties back to climate.

And, not to be outdone, Australia’s Parliament and new Prime Minister are also on the verge of decisive (and significant) national climate action.

Let’s recap.

The US Inflation Reduction Act: curtailing inflation with clean energy initiatives

What is it?

Legislators in Washington (including our dearest friend Senator Joe Manchin) recently announced a new proposed act that aims to fight inflation, invest in clean energy, and reducing the United States’ greenhouse gas emissions by approximately 40% by 2030.?

The proposed bill includes the following:

• $60 billion to boost domestic clean energy manufacturing. $30 billion goes to production tax credits for solar panels, wind turbines, batteries, and critical mineral processing
• A $7,500 tax credit to lower- and middle-income motorists to invest in clean and electric vehicles?
• $30 billion in grants and loans for states and electric utilities to expand clean energy initiatives?
• $60 billion for environmental justice communities?
• An increase on methane emissions fees that will go from $900 per ton in 2023 to $1,500 per ton by 2026

Recognizing the unpopularity of sky-high inflation in an election year, Senator Machin appears to be on the verge of doing the right thing. By cutting our reliance on expensive, inflationary oil sourced from authoritarian regimes, America can fight inflation directly with climate action. A rare double-bottom-line sustainability win.

Just don’t call it “Build Back Better.”

What this means and why it matters

As the proposed legislation currently stands, if signed, it will be the U.S. government’s largest investment in clean energy programs ever. It has the potential to shift the U.S. economy away from the fossil fuel industry and into a new era where solar, wind, and other renewables become the dominant players in our energy use and transportation.

Next steps

There are a number of potential hurdles to get this bill signed into law. Negotiations must take place in both the House and Senate, first amongst Democrats (where the bill originated) and then with Republican legislators (who are unlikely to support it). The proposal will also be reviewed in hopes of being approved as a budget reconciliation bill.?

Senate Democrats plan to take the proposed act to a vote before August recess, which begins August 8th and lasts until September 5th. If Manchin stays on board (and, as of today, he appears to be good-to-go) and there isn’t a late-hour derailment by Senator Sinema,?the “Inflation Reduction Act” looks poised to pass in the House and Senate in the next week or two.

Just the Facts - Australia’s New Climate Law?

What is it?

Australia is on a path to set the most ambitious emissions reduction targets in their country’s history. Backed by a recently elected progressive parliament, the proposed legislation makes environmental commitments aligned with the U.N.’s climate change framework and the Paris Agreement’s 1.5° C mean global warming target.?

A woman with a burning stroller outside?Parliament House in Canberra,?during an Extinction Rebellion climate protest on Aug.?10.?? Extinction Rebellion/AAP

Under the new proposed law, the Australian government aims to:

• Reduce greenhouse gas emissions (GHG) by 43% from 2005 levels by 2030
• Achieve net zero emissions by 2050?
• Require the Minister for Climate Change to provide yearly reports to Parliament on Australia’s progress towards the set targets

What does it mean?

Although Australia’s already committed to the Paris Agreement, placing this law into effect will cement the country’s climate commitments with major, new-found accountability. This has not been the case under prior Australian government administrations.?

Why it matters

While smaller than the U.S., Australia is still the 13th largest global economy, and will soon be on a path for one of the most ambitious decarbonization trajectories of any nation.

Australia’s also one of the world’s largest exporters of coal, with an estimated export value of $39 billion (AUD). Parliament’s proposal will have major consequences for the coal industry, both internally and abroad, and may reshape Australia’s entire economy, permanently.?

Next steps?

For the bill to pass, sponsors need to gain support from Australia’s Green Party (seems likely), as well as independents in the Senate. The Green Party’s still in negotiations over certain sponsors’ desires to open new coal and gas mines, which could potentially undermine the targets set by the new legislation.

There is currently no proposed date for the legislation to go to a vote just yet, but the bill appears to have a lot of Parliamentary and public momentum.

Not a bad week in sustainability one bit. Now let’s get these bills past the finish line.

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