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Inflation Reduction Act “Biggest Step Forward” on Climate, Says Biden Amid Calls for Renewable Energy

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President Biden signed the Inflation Reduction Act into law Tuesday, a sweeping $739 billion bill to address the climate crisis, reduce drug costs and establish a 15% minimum tax for large corporations. Biden has praised the IRA as one of the most significant measures in the history of the United States, though many climate groups and Indigenous land and water defenders have criticized the package for including major handouts to the fossil fuel industry and other corporate entities. Professor Ashley Dawson, who is a member of the Public Power campaign in New York, says the law’s tax credit provisions give “big banks deciding power over what projects get built and where they get built and who builds them.” He supports a democratically controlled “public alternative” which would have the power to build out renewable infrastructure at the speed needed to mitigate the climate emergency.

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StoryJul 21, 2022With Congress Unwilling to Act, Pressure Grows on Biden to Declare National Climate Emergency
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This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: This is Democracy Now!, democracynow.org, The War and Peace Report. I’m Amy Goodman.

President Biden Tuesday signed into law the Inflation Reduction Act, the IRA, a sweeping $739 billion bill to address the climate crisis, reduce drug costs, establish a 15% minimum tax for large corporations. At a signing ceremony at the White House, Biden praised the IRA as one of the most significant measures in the history of the United States.

PRESIDENT JOE BIDEN: This bill is the biggest step forward on climate ever. Ever. And it’s going to allow — it’s going to allow us to boldly take additional steps toward meeting all of my climate goals, the ones we set out when we ran. It includes ensuring that we create clean energy opportunities in frontline and fence-line communities that have been smothered, smothered by the legacy of pollution, and fight environmental injustice that’s been going on for so long.

AMY GOODMAN: Despite Biden’s high praise, many climate groups and Indigenous land and water defenders have criticized the package for including major handouts to the fossil fuel industry, which were added to win the support of the conservative Democratic West Virginia Senator Joe Manchin, the largest recipient of fossil fuel industry funding in Congress. The Center for Biological Diversity described the bill as a “climate suicide pact.” Among the concessions Manchin won was a side agreement to expedite fossil fuel permitting, including for the controversial Mountain Valley Pipeline. If built, it would carry 2 billion cubic feet of fracked gas across more than a thousand streams and wetlands in Appalachia, including parts of West Virginia.

Last week, Democracy Now! spoke to Tara Houska, Indigenous lawyer, land and water defender and founder of the Giniw Collective, after the law — or, the bill at that time was passing in the Senate.

TARA HOUSKA: You’ve got a bill that in order to get access to renewable energy dollars and investments, upfront, the fossil fuel industry has handed off millions and millions of acres of public lands, of waters, side project deals where you see the rolling back of bedrock environmental law, all of this just to get investment into renewable energy. I mean, that is not a climate solution. Mother Nature does not deal in U.S. dollars. That’s my response.

AMY GOODMAN: Well, for more, we’re joined in Rosendale, New York, by Ashley Dawson, professor of environmental humanities at the City University of New York, author of People’s Power: Reclaiming the Energy Commons and a member of the Public Power New York campaign.

Welcome back to Democracy Now! Professor Dawson, if you can start off by responding to the law? Many environmental groups also, while harshly critical of what could have been in it, said if this is the best we can get, we should start here. Can you talk about the pitfalls, but also what you think can be accomplished under this new law?

ASHLEY DAWSON: OK, Amy. It’s good to be with you.

I’ll start by talking about some of the positive sides of the law. You know, it’s called the Inflation Reduction Act, but it’s basically a climate bill, since it includes $370 billion to address the climate emergency. And that includes a 10-year extension of existing credits for wind and solar. There are also provisions for consumer rebates for heat pumps, rooftop solar, purchases of electric vehicles. And all these measures are projected to decrease U.S. carbon emissions by about 40% from 2005 levels by 2030. And that represents 80% of the U.S. commitment to the Paris Agreement of 2015, which was designed to keep global warming below 2 degrees Celsius. So, this is, obviously, absolutely crucial legislation. And the fact that just a couple weeks ago it looked like any kind of measures to address the climate emergency were completely dead has led some environmental groups to really celebrate this.

You know, there are also other important measures here. There’s methane regulation. Methane emissions have reached historic records in recent years because of the fracking revolution. And methane is 86 times more potent than carbon dioxide. So curbing methane is absolutely necessary. And it also closes some tax loopholes for wealthy people and big corporations, which is a climate measure — although it often isn’t described that way — since these wealthy people and corporations are responsible for so much of carbon emissions. And then, as you — as President Biden said in the clip you played, the measure also includes $60 billion worth of funding for frontline and fence-line communities. So, there are positive measures in the IRA, but there are also lots of issues, as Tara Houska said in her interview last week.

AMY GOODMAN: You’ve also been talking about the bill creating a lot of jobs in green energy and carbon reduction, but also concerns about the nonunionized labor in that large area.

ASHLEY DAWSON: Right, right. So, what the bill does is to essentially continue Obama-era policies of providing tax credits to for-profit renewable energy companies. And that comes in the form of investment tax credits and production tax credits for clean energy projects. Now, you know, the for-profit renewable energy sector is notoriously ununionized. There are measures in the IRA which specify that their projects have to have some kind of unionized elements, but we don’t know whether that will — how that will actually play out.

And there’s a history here that we need to really unpack behind these tax breaks. These are policies that go all the way back to the Reagan administration in the 1980s, which mean that developers who want to have some kind of new renewable energy program will get tax credits for generating solar power and wind energy. The thing is, most of these developers don’t owe taxes upfront. They don’t have any existing tax bills when they approach these projects. And that means that they need to partner with third-party financial partners in order to take advantage of these tax credits. Who exactly are those third-party financial partners? Well, they tend to be big banks, like JPMorgan Chase and Bank of America. So, essentially, renewable energy developers kind of sell their tax breaks to these big banks in return for the upright funding that the banks invest in the project. It’s a deal called tax equity. The problem, though, is that wind and farm developers sometimes can’t attract enough tax equity partners. And if that doesn’t — if that happens, then the projects don’t actually get built.

So, you know, the projections about how this is going to decrease emissions by 40% are based on a history of attracting funding that we can’t be absolutely sure will work, and which is quite problematic because it means, essentially, you know, we’re giving big banks deciding power over what projects get built and where they get built and who builds them. And, you know, we feel, at Public Power New York campaign, that these decisions should be made genuinely democratically, and projects should be built when and as needed, not depending on when they’re going to make money for big banks.

AMY GOODMAN: Let’s end with that issue of Public Power. You wrote the book People’s Power: Reclaiming the Energy Commons, and you’re a member of the Public Power New York campaign. What is that? And how can that be unleashed in the country?

ASHLEY DAWSON: Well, the Public Power campaign began in New York state because we looked at what this history of tax credits for for-profit renewable corporations had accomplished, and we felt that it really had not come — had not come through. In New York state, we only have about 4% wind and solar power. And that’s despite over a decade of these kinds of policies and despite the passage of a law in 2019 in New York state called the Climate Act, that mandates a very speedy transition to renewable energy.

So, what we felt was that we need to have public power. We need to make sure that there’s an entity, which is democratically controlled, which can step in when market forces are not doing what we want them to do, and what we need them to do, given the climate emergency.

So, the Public Power New York campaign has put forward a bill, which almost passed in the state Legislature during the last spring session, which would mandate that the New York Power Authority step in and get the state to its renewable energy goals. And the New York Power Authority is something that was created back during the New Deal era by Franklin Delano Roosevelt when he was governor of New York state. And something quite similar was happening back then. You know, there were these for-profit utilities that were gouging people with high utility rates, and so FDR decided, well, you know, we need a kind of public alternative, something that can bring energy to people who need it and something that can charge affordable rates to people.

And we feel that because of some of what I’ve outlined about how these tax credits put power in the hands of for-profit enterprises linked to big banks, which incidentally are the same banks which continue to fund fossil fuel projects, you know, we feel that we need a public alternative which can be democratically controlled and which can be mandated by law to build out renewables at the speed that we need to prevent the climate emergency, and which, incidentally, can also include very strong pro-union clauses so that we can be guaranteed that it’s a just transition which saves not just frontline communities but also the working class, more broadly.

AMY GOODMAN: Ashley Dawson, we want to thank you for being with us, professor of environmental humanities at the City University of New York, author of People’s Power: Reclaiming the Energy Commons.

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