Environmental Justice


The United States has just passed arguably its most significant and meaningful legislative instrument on climate change and clean energy. It is intended to have positive implications for climate and clean energy markets around the globe. On Sunday, August 8, 2022, the US Senate passed the Inflation Reduction Act of 2022 (the Act). The Act was then passed by the House of Representatives on Friday, August 12, 2022, and President Biden signed it into law today (Tuesday, August 16, 2022). The Act represents a central pillar of President Biden’s policy agenda and is extremely ambitious in scope, with significant implications for healthcare, taxes, and climate change. It authorizes approximately US$430 billion in spending, with approximately US$369 billion of that sum directed to clean energy and addressing climate change. This bulletin highlights the central climate and energy provisions of the Act. It is noteworthy that Senate Democrats estimate that the Act will raise US$739 billion in new revenue through measures such as increasing the IRS’s enforcement of tax evasion, and a new 15% minimum tax rate applicable to corporations with profits of $1 billion or more. These new revenues are intended to more than offset the expenses resulting from new programs, resulting in a projected reduction in the federal government’s deficit. The Senate was the critical hurdle for the Act, with approval remaining in doubt until its final passing by a vote of 51-50 (along strict party lines with Vice President Harris casting the 51st and tie-breaking vote).   Senate Democrats indicate that the climate change provisions of the Act will result in a 40 percent reduction in carbon emissions by 2030 compared to 2005 levels when fully implemented. While this falls short of America’s updated Paris Target of a 50-52% reduction from 2005 GHG emissions by 2030, it constitutes meaningful progress toward that goal.    The climate and energy portions…