This article by Matt Simon originally appeared in Wired on August 16, 2022:
TODAY PRESIDENT JOE Biden signed the Inflation Reduction Act, a massive bill that represents the biggest investment in climate action in US history. It puts nearly $400 billion toward promoting domestic production of clean energy technology and generally retrofitting America to survive climate change. If all goes to plan, the act would slash US emissions by 40 percent by the year 2030.
In the immortal words of Uncle Sam, the bill screams: “I Want You” … to fight a war against climate change. The bill is packed with tax credits and rebates for Americans to buy electric vehicles (EVs), install heat pumps and better insulation, and slap solar panels on their roofs. We’re talking thousands upon thousands of dollars per household. In turn, all that extra investment in green technologies should juice the market, further accelerating the transition to a cleaner economy.
“It’s basically just a big green light for everyone—for the consumer, for the companies making these products, for building owners, for utilities, everybody—to start doing this stuff,” says Ben Evans, federal legislative director of the US Green Building Council, a nonprofit that promotes sustainability. “And we think that’s really going to change these markets. I don’t think it’s an overstatement to call this historic.”
It’s a stealthy way to encourage mass action on climate change: If homeowners across the US individually make their homes more efficient, collectively we’ll bring down carbon emissions, big time. A fifth of both national energy use and CO2 emissions come from homes. “What this bill does, in many ways, is at least as much psychology as economics,” says Gernot Wagner, a climate economist at Columbia Business School. “You have your average conversation with your contractor about: Wait, should I really be installing a gas boiler here, with gas prices pretty darn high?”
“The obvious thing to do,” Wagner adds, “is maybe spend a little extra today on stuff that literally pays for itself within months. So you can save 50 percent off your electricity bill if you insulate the place better.”
Having failed to legislate meaningful action on climate change with—heaven forbid—an actual phaseout of fossil fuels, the feds have turned to the tax code, using public money to fund the public good of mass decarbonization. Sure, taxes are no fun, and tax credits sound even more confounding. But it’s actually fairly straightforward for you to get your share of the Inflation Reduction Act.