The United States legislature approved a few days ago the project to mitigate the most ambitious climate change in its history. The legislation, signed yesterday by Democratic President Joe Biden at the White House, has as its main purpose to reconfigure the US economy and remove it from the dynamic in which the pandemic and the armed conflict in Eastern Europe left it immersed. The bill, pursued by Democrats for more than a year and strongly opposed by Republicans, has been dubbed the Inflation Reduction Act.
US economists rule out a short-term impact on inflation levels. But what has been approved has a b-side: the legislation has already positioned itself as one of the great measures at the international level in terms of mitigating climate change. “It is the biggest step forward in terms of climate,” Biden said yesterday during the signing of the project that also seeks to improve the prospects of the Democratic party before the next midterm elections in November.
Biden has placed the fight against climate change as one of his top priorities since he was elected president. But his administration had not achieved any ambitious change like this. The project includes investments of around 370,000 million dollars over the next decade in new projects related to renewable energy and emission reduction. It would also raise taxes – to a minimum of 15% – on large corporations with profits above $1 billion a year. The latter would largely finance the ambitious plan.
“[The spending] would only account for 0.1% of the gross domestic product forecast for the same period [the next decade], but it could have a catalytic effect on the energy transition,” wrote economist Paul Krugman, in one of his columns in The New York Times . “And it could also transform the political economy of climate policy.” The Washington Post has also described the regulation as “the largest bill in the nation’s history.”
Biden’s plan, which has also been launched in search of regaining popularity among voters, is less ambitious than what the Democrats initially sought, yet it includes important measures, mainly new incentives for companies to produce more renewable electricity and for households to transform their electricity use.
The project contains at least $260 billion in tax credits for the construction of new renewable energy projects or the manufacture of parts used in the construction of wind and solar farms and provides a 30% credit for American households to install solar panels or improve your insulation or air conditioning installations.
The law also aims to give a boost to the use of electric cars. It raises tax credits of 80,000 million dollars for buyers of these vehicles, although it only includes models made in North America. And it gives rewards to big oil and gas companies that cut their methane emissions.
Analysts’ estimates, cited by American newspapers, indicate that, with this package, the United States could reduce its polluting gas emissions by up to 40% by 2030 , compared to what was emitted in 2005. The reductions would be below those of the Democratic administration , which had set a goal of up to 50% less emissions. But they would be enough to put the country at the forefront of the race for climate change mitigation.
Biden’s arrival at the White House -in January of last year- The US administration has indicated concern that its neighboring country is not taking action to reduce its use of fossil fuels. Last June, and after a series of visits by US officials and businessmen to Mexico, President Andrés Manuel López Obrador announced, as part of a decalogue, agreements with 17 US companies to generate more than 1,800 gigawatts of wind and solar energy. But the details of the agreements have not been disclosed and the beginning of the consultation process between Mexico, the United States and Canada due to disagreements in energy policy have left the announcements in suspense.