This year much of the United States has been suffering under prolonged drought. Over one hundred miles of the Rio Grande have dried up. In California, which endured one of its most brutal September heat waves since records began, ‘water police’ are coming after water wasters.
While working people conserve water, wealthy celebrities routinely flaunt these restrictions. In Jackson, Mississippi, flooding met with the human made crisis of austerity, leaving nearly 180,000 people without safe drinking water.
Democrats have attempted to get climate bills through Congress under Biden, though much smaller in scope than the Green New Deal.
But these attempts were regularly blocked by members of the Democratic Party. With the Senate tied 50-50 between Democrats and Republicans, Democratic Senators Joe Manchin of West Virginia and Krysten Sinema of Arizona, both with big finance and fossil fuel links, have had outsized sway on US legislation.
So when in July Manchin put forward a climate bill — the Inflation Reduction Act (IRA) — that he could support many breathed a sigh of relief.
But what is the IRA and why should those of us fighting for not just a greener, but also better world for working-class people demand more?
The 730-page bill boasts $369 billion in new climate-oriented spending. The vast majority of that comes in the form of tax credits — reductions in taxes paid by individuals and corporations — “for private energy production and consumer incentives for electric vehicles and appliances.”
The bill comes out of years of struggle from the Sunrise Movement and the Sanders Movement’s Green New Deal. Compared to these, the IRA is a huge step back and it is nowhere near President Joe Biden’s original $4-$6 trillion draft of Build Back Better: a set of public investments in infrastructure along with public investments in environmental and social programs.
This lack of scale and ambition means the IRA will have very little impact on emissions. Manchin and Senator Schumer have claimed that the bill will reduce US climate emissions below 2005 levels by 2030 by 40%. The Rhodium Group, which has endorsed the IRA, estimates that current policy will already lead to a 24-35% reduction in emissions, with the IRA leading to 31-44% reduction.
Even more troubling, however, Manchin and Biden’s Inflation Reduction Act has plenty of compromises with the fossil fuel lobby.
While the bill provides tax breaks and incentives for the wind and solar industry, it also contains many provisions that are friendly to the fossil fuel industry. It opens up the Gulf of Mexico and Alaska to offshore drilling that had previously been blocked by the Biden Administration. It encourages the leasing of public lands to private oil interests for drilling and requires oil companies to get first dibs on public land if the federal government intends to open up those lands to solar and wind projects. There are trillions invested in the fossil fuel industry, those capitalists expect to see returns and any climate plan that doesn’t reckon with that fact is dead on arrival.
The bill called for further action by Congress on permitting reform for oil, gas, wind, solar and long-range transmission systems. To build out the transmission systems that are fit for purpose we certainly do need a process to fast-track their progress. But the ‘reform’ pushed by Manchin ties this need to empowering the fossil fuel industry. While we need a better process for building out long-range transmission lines, the Manchic bill calls for a fast-tracked process for oil companies to build out controversial and damaging oil pipelines.
While House Democrats have put up some resistance to this idea, it’s unclear as of time of writing whether or not this permitting reform will be completed by the timeline proposed by the IRA. But it highlights the bitter compromise nature of this bill.
Even if there were no fossil fuel giveaways, the IRA’s conservative approach to climate change — utilising incentives and tax credits instead of direct-state investment and planning — is certain to disappoint.
Admittedly some of the bill's provisions are welcome. For the wind and solar industry, it provides tax breaks and incentives to lower the start-up, maintenance and expansion of the for-profit green energy industry.
Encouragingly, public power companies will also be able to utilise the tax credits given to private industry, something they had been barred from accessing. Companies will not recieve the full tax credit giveaway to private industry unless they pay prevailing wages in the industry outlined by the Federal Government. But as Matt Huber writes, “it is a far cry from Bernie Sanders’ plan to massively expand federally owned energy production.”
On the consumer side, the IRA has a host of rebates and tax credits available to homeowners and those interested in buying an electric vehicle. For example, the IRA provides a collection of rebates and tax credits available to homeowners who wish to purchase new green appliances and extends and, in most cases, expands tax credits for home solar installation for those who meet income thresholds.
The working theory of the IRA is that if you can fix the market by making the cost of green energy more attractive to private capitalists, we can deal with climate change. Kate Arnoff outlined this theory of change in the IRA as “the role of the state is to lower the barriers to entry and wherever possible transform clean energy into profitable assets that can raise funds from investors seeking steady yields.”
But increasing profits for private investors does not necessarily lead to lower prices. For example, in Texas during the recent explosion in higher gas prices, the oil and gas industry took their record profits and paid off shareholders instead of using that capital to invest in production.
This speaks to a broader problem of ownership. The US, like many other industrialised capitalist societies, is facing the results of years of austerity that have pulled the state out of most aspects of our lives. Look no further than Jackson, Mississippi, or Flint, Michigan, to see what private control of our infrastructure has meant for working people.
Instead of aiming to solely shore up the bottom line of private capitalists, we should be bolder. The Green New Deal was not only aimed at reducing our carbon emissions, it aimed at revitalising American society after years of disinvestment. Its vision was not about tweaking around the edges and promising the rich more, it promised working people a better future, and crucially a vehicle to take hopeful slogans and turn them into reality.
We cannot allow this intervention to serve to demobilise the forces that have been demanding more than a swap of who owns the companies that we pay for our energy, but a democratised and publicly controlled energy system. To put it bluntly, the IRA is a big disappointment.
The IRA is great for Biden to try to quell the demands of climate activists that he does more, it’s good for oil companies aiming to secure a permanent place in our energy system and it’s great for wealthier Americans looking for personal solutions to a societal problem.
As for the planet and the millions of working people in the US struggling to keep the lights on, the water running, and food on the table, it’s nowhere close to where we need to be.
David Griscom is a writer and Texan based in Austin and co-host of the podcast Left Reckoning.
Feature image: National Renewable Energy Lab.
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