BY DEVON BRADLEY
Image Source: Wix
Colossal wildfires in the Pacific Northwest, devastating hurricanes in the South, and unprecedented flooding across the US have become the norm in recent years. Under the mounting economic toll of climate change, the US federal government enacted the 2021 Infrastructure Bill and the 2022 Inflation Reduction Act with substantial provisions to tackle climate change. Within a short time, these laws have profoundly impacted the economy, investing billions into clean energy and electric vehicles, driving America toward carbon neutrality.
The 2021 Bipartisan Infrastructure Law provides sweeping investments in infrastructure, from transportation to sewage treatment and drinking water. The bill’s primary objective is to modernize America’s aging infrastructure and mitigate climate change impacts in vulnerable communities. The climate change provisions fall under two broad categories: climate technology and climate resilience. The bill invests $65 billion in clean energy and grid improvements, $7.5 billion in electric vehicle (EV) charging stations, $39 billion in public transit systems, and $66 billion in rail modernization. The bill also allocates $50 billion for climate adaptation, which includes funding for flood risk management, coastal resilience, and disaster recovery. These climate resilience provisions prepare communities for a current reality with climate change.
Expanding on the climate efforts under the Infrastructure Bill, the Inflation Reduction Act (IRA) passed in 2022 takes a proactive approach to curb greenhouse gas emissions. The Inflation Reduction Act is a major milestone in U.S. climate policy, providing an upwards of $369 billion in subsidies to decarbonize America over the next decade. The law provides tax credits to boost domestic renewable energy generation like solar, wind, and hydrogen. The IRA sets out to transform the automobile industry as well, with extensive tax credits for manufacturers producing electric vehicles and batteries domestically. The bill also drives decision-making at the consumer level by providing subsidies and tax credits for energy-efficient heat pumps to cool homes during heat waves, rooftop solar installation, and electric vehicles.
These laws have built the foundations for America’s path toward net zero. The Department of Energy projects that the combined effects of these laws will reduce greenhouse gas emissions by 40% by 2030, from 2005 levels, the year of America’s peak annual greenhouse gas emissions. While the United States remains behind most European countries in progress toward carbon neutrality, these bills steer the United States in the right direction to catch up.
Although these bills remain in their infancy, monumental shifts in electricity generation have already occurred. According to the White House Fact Sheet, over 800 wind, solar, nuclear, and other clean energy projects have been announced with private investments totaling $110 billion. These investments have translated into real growth in the renewable energy sector. For instance, while only two offshore wind farms operate in the U.S. today, dozens of projects are now in the pipeline that will significantly increase America’s offshore wind capacity. Spurred by the tax credits and federal approval, massive off-shore wind farms have begun construction off the coast of Rhode Island, Massachusetts, and New Jersey. The New Jersey wind project, Ocean Wind 1, will be America’s largest offshore wind farm to date.
On the solar front, Electrek reports over 51 solar factories have been announced since Biden’s announcement of the IRA. Thanks to the IRA’s incentives for homeowners, SEIA reports a record-breaking 700,000 homes installed solar in 2022, increasing total residential solar generation by 40% from 2021. The number of heat pumps sold in the U.S. also surpassed gas furnace sales for the first time with over 4.3 million units purchased according to Canary Media. This turning point indicates a trend toward home electrification, a crucial shift needed to achieve net zero due to the carbon emissions released by natural gas combustion.
In the automobile industry, the sale of electric vehicles has tripled since the passing of the IRA due to consumer subsidies, signifying the beginning of an EV boom in America. As TechCrunch reports, the number of U.S. battery plants in planning, under construction, or operational jumped from only four in 2019 to thirty in 2023. In cities across the United States, multi-billion dollar EV assembly plants are under construction, revitalizing industry and bringing thousands of manufacturing jobs. In some cases, the construction of new automobile manufacturing plants will transform rural towns. Stanton, a town with a population of only 400, races to build thousands of homes to accommodate the arrival of the 6,000 workers expected for Ford’s new manufacturing complex.
While these bills have clearly outlined America’s path toward net zero, one troubling challenge lies ahead: the sourcing of raw materials for batteries. Naturally, all-electric vehicles require batteries to store electricity. Due to the fluctuation in energy output by solar and wind, energy grids also rely on batteries to store excess energy and provide electricity during periods of minimal wind or sunlight. As the domestic production of batteries ramps up, the demand for crucial resources like lithium will rise accordingly. At the moment, the United States possesses a single lithium mine, located in Nevada. Currently, the U.S. relies on the import of lithium and other key components, raising questions regarding the sustainability of the battery supply chain. Mining and shipping still rely heavily on fossil fuels, undermining the carbon-neutral prospect of solar panels and electric vehicles. Significant land use and environmental pollution are also a concern, especially in lithium-exporting countries like Peru and Chile. While the United States is doubling down on domestic lithium production with the Biden administration greenlighting several new mines, the challenges associated with lithium mining must be addressed. Australia, the current leading exporter of lithium, aims to decarbonize its mining operations through hydrogen-powered trucks and acres of solar panels. The United States should look to Australia as a model for carbon-free lithium extraction.
The introduction of these new bills will undoubtedly affect the climate and economic landscape for years to come, as evidenced by the transformations already underway. While it remains to be seen whether America will successfully decarbonize by 2050 — especially due to the risk of administration change on climate policy — the Infrastructure Bill and Inflation Reduction Act have set America on the right track.