Tentacles of the $369 billion Inflation Reduction Act passed by Congress this week will surely reach Vermont, though politicians and advocates aren’t yet sure where the funding will be funneled, or how much will come to the state.
In addition to lowering the cost of prescription drugs and reforming the tax code, the bill includes an unprecedented amount of money to address climate change.
It passed the U.S. Senate on Sunday, with the support of Sen. Patrick Leahy, D-Vt., and Sen. Bernie Sanders, I-Vt. And on Friday, it cleared the U.S. House by a party-line vote of 220-207, with the support of Rep. Peter Welch, D-Vt. The bill now heads to President Joe Biden for his signature.
“This is a historic day — for Vermonters and for all Americans,” Welch said in a written statement Friday after voting for the bill. “For the first time, we are taking major steps forward to address climate change, curb the power of Big Pharma, and build a fairer tax code for working families.”
If signed into law, the Inflation Reduction Act is expected to reduce carbon emissions by 40% below 2005 levels by 2030. It would streamline funding for electrification, the manufacturing of solar panels, electric vehicles and other renewable technology, programs to reduce emissions, environmental justice, and climate-focused agricultural practices.
Some of its provisions benefit fossil fuel companies — inserted largely to appease U.S. Sen. Joe Manchin, D-W.Va., who held the power to tank the entire deal. It uses investments and incentives as tools, rather than regulatory “sticks,” such as a carbon tax or cap and trade program that would restrict the amount of fossil fuels produced. And it doesn’t come close to including what would have been in the larger, $2.2 trillion Build Back Better legislation, from which it was derived.
Still, as noted by Hoesung Lee, chair of the United Nations Intergovernmental Panel on Climate Change, “humanity is running out of time” to limit global temperature rise to 1.5 degrees more than pre-industrial levels. Failing to reach that goal would pose a major threat to human health and the planet.
In that light, many in Vermont’s environmental community, including environmental groups and state officials, have viewed the package as a victory.
“While it’s disappointing that the package includes some giveaways to the fossil fuel industry, the overall package is an overwhelming win for climate action, with impartial analyses showing pollution reductions that finally give us a shot at hitting our Paris Accord climate commitments,” read a statement from Vermont Conservation Voters.
Bradley Campbell, president of the Conservation Law Foundation, said that the bill “still doesn’t get us to where we need to be, so state action to reduce emissions is going to be critical in the years ahead.”
Still, he underlined its importance.
“It’s no coincidence that this bill is moving forward at a time when large swaths of the country are baking in yet another heatwave,” he said in a written statement. “The IRA will help us slash emissions and bolster the country’s clean energy efforts to respond to the climate crisis at our doorsteps.”
According to Leahy’s and Welch’s offices, the state-by-state allocations of the act haven’t yet been decided. But Welch celebrated the inclusion of a program he spearheaded, called Hope for Homes, which will provide rebates for demonstrated home energy savings. The program is poised to receive significant funding under the act, according to Welch’s office.
Julie Moore, secretary of Vermont’s Agency of Natural Resources, said her staff have been watching the bill’s progress closely.
Parts of the bill that would be most relevant to the agency are its funding for climate resilience, along with agriculture and working lands, Moore said.
“There is a lot of money in there for conservation and technical assistance and programs that we take great advantage of already in Vermont,” she said. “To see additional funding in those areas would be excellent.”
Some money could go to the Environmental Quality Incentive Program, providing grants to agricultural and forest landowners to adopt climate and resilience-focused practices, Moore said. Another program, called the Regional Conservation Partnership, helps fund and coordinate conservation practices that could be riskier for a farmer to approach alone.
Funding for climate work, such as grants that could help consumers purchase electric vehicles, could boost efforts in the state to reduce emissions. Vermont has fallen away from a track that would allow it to reach emissions reduction goals legally mandated by the 2020 Global Warming Solutions Act.
State officials may also be able to leverage funds for projects specific to environmental justice. During the most recent Legislative session, state lawmakers passed an environmental justice law, which set standards for the percentage of time and funding that state officials should invest in communities that have been most impacted by climate and environmental harm.
However, state officials are already busy handling the influx of money from the American Rescue Plan Act and the Bipartisan Infrastructure Law. If state officials at the Agency of Natural Resources are going to take on more projects, they’ll need more people, Moore said.
She’s already made a request with the Joint Fiscal Committee for more than 40 additional positions at the agency so staff can carry out that work — and that doesn’t account for the Inflation Reduction Act.
Despite the provisions for the fossil fuel industry, Moore said the bill “needs to be looked at as a full package.”
“There’s no doubt in my mind that this will be a huge win for climate and for the environment,” she said.
