The clean energy spending in the recently unveiled Inflation Reduction Act (IRA) marks a victory for the sort of bottom-up, incrementalist, behind-the-scenes climate policy that progressive climate advocates have decried as inadequate for over a decade.
It is a credit to the climate left’s pragmatism that they ultimately championed this package of “neoliberal” tax credits and “all-of-the-above” energy subsidies that reward clean energy and fossil fuels interests alike. But in their celebration, climate hawks may be overestimating their own role in producing this legislation while underestimating the role of its most committed architect: West Virginia Senator Joe Manchin.
The real-time claim is that the IRA represents a come-from-behind victory for the climate progressives. The bill is “a historic achievement for the climate left and a tribute to both its moral fervor and its political realism,” wrote the New York Times’s David Wallace Wells last week. But the style of climate spending included in the IRA has always been broadly popular; Manchin himself has voiced strong support for clean energy tax credits and infrastructure spending throughout the negotiations.
The IRA, after all, strongly resembles the package of climate spending that Senator Manchin committed to supporting in a document he co-signed with Majority Leader Chuck Schumer over a year ago, and the $1.8 trillion proposal he reportedly offered the White House in December 2021. The bill is a kind of supercharged version of what was once called the Murkowski-Manchin bill, a package of clean energy spending that Democrats killed in early 2020 that was mostly revitalized in an omnibus spending bill passed in the final weeks of the Trump Administration.
It is bigger and stronger and more assertive, but unequivocally in the same lineage, as the technology R&D, tax credits, and loan guarantees advanced by the 2009 American Recovery and Reinvestment Act, the Energy Policy Acts of 2005 and 1992, and countless other “quiet” climate policy vehicles passed over the last several decades. If anything distinguishes the IRA from its legislative ancestors, it is that this newest bill “says the quiet part out loud,” in that it capitalizes on post-covid federal willingness to spend and directs that new spending towards strategically valuable investments in innovation and infrastructure.
Let’s peek under the hood. In addition to setting a corporate minimum tax of 15%, extending Obamacare health subsidies, and some other provisions, the IRA outlays $369 billion for “energy security and climate change.” Within this large sum are $40 billion in tax credits for manufacturing, $30 billion for low-carbon agriculture R&D, extended consumer tax credits for purchasing electric vehicles, and hundreds of billions for expanded and streamlined deployment subsidies for solar, wind, geothermal, nuclear, carbon removal, and other low-carbon energy technologies. It also increases federal statutory leasing targets for oil and gas projects.
What’s conspicuously missing from all of this are any of the top-line priorities that the climate left has advanced in recent years. This is not a $16 trillion program to fundamentally remake the nation’s energy, transportation, and agricultural systems. There is no green jobs corp, job guarantee, universal basic income, or any of the provisions variously appended to the strategically capacious Green New Deal. There is no nationalization of the electricity or transportation sectors. There is no prohibition of Federal Reserve liquidity support for the fossil fuel sector. There is no Clean Electricity Standard or Clean Electricity Performance Program. There is no ban on oil and gas leasing on federal lands or elsewhere. There is no federally declared climate emergency.
Read the rest of this piece at The Breakthrough Institute.
Alex Trembath is Deputy Director at Breakthrough. He has authored multiple Breakthrough publications, and serves as co-director of Breakthrough Generation, the Breakthrough Institute's annual summer policy fellowship. Alex has been published in Slate, the Boston Globe, Forbes, Bloomberg, Politico, and elsewhere. Follow him on Twitter @atremblath.
Photo: Breakthrough Institute
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