The Inflation Reduction Act has been a source of much discussion ever since President Biden signed it into law in August.
Whether our feelings about this partisan bill are positive or negative, the money has been allocated, and we should make sure that money works for Arkansas residents.
The act combines programs, fees and tax credits to increase the speed at which the U.S. adopts clean energy, including solar, wind, nuclear and hydrogen. It will give Americans rebates covering 50% to 100% of the cost of installing new, energy-saving home electric appliances, such as heat pumps, water heaters, clothes dryers, stoves and ovens, as well as a 30% rooftop solar tax credit to lower utility bills.
Even without the rebates and credits, it’s estimated that American households will save $170 to $220 per year by 2030, thanks to lower electricity costs. The funding for clean domestic energy will also decrease the burden on American taxpayers to subsidize fossil fuel costs or the deployment of our military to protect global trade routes around foreign oil production.
Farmers and ranchers – who can implement important climate solutions but often can’t afford to pay for investments out of pocket – will get money for conservation. The cash will finance projects to help store carbon in soil and trees, reduce methane and switch to sustainable fertilizer and crop rotation methods. Meanwhile, foresters will benefit from funds for forest health and resilience, as well as incentives to maximize the amount of carbon dioxide removed from the air.
Here in Arkansas, some of the benefits for residents include the following:
Lower Energy Costs
The Inflation Reduction Act will make it more affordable for Arkansas families to purchase energy-efficient appliances when they need to, make repairs around their homes and save money on their utility bills each month through:
- Tax credits covering 30% of the costs to install solar panels and battery storage systems, make home improvements that reduce energy leakage or upgrade heating and cooling equipment. No income limits apply. For solar, uptake projections estimate that over 150,000 additional Arkansas households will install rooftop panels as a result.
- Tax credits covering 30% of the costs of community solar projects – owned by local businesses that sign up families to save on their electric bills – with additional bonus credits of 20% for projects at affordable housing properties and 10% for projects in low-income communities.
- Grants to help state and local governments adopt the latest building energy codes, which would save the average new homeowner in Arkansas 30.2% on their utility bills – $783 annually.
Manufacturers employ 157,100 workers in Arkansas, and the Inflation Reduction Act will help us make the technologies of the future at home – supporting local economies and strengthening supply chains. The Inflation Reduction Act will boost U.S. manufacturing of clean energy and transportation technologies, as well as investments in a new Advanced Industrial Facilities Deployment Program to position America to lead the growing global market for clean steel, aluminum, cement and more. The act contains a huge investment in low-carbon technologies and is expected to help reduce greenhouse gas emissions 40% below 2005 levels by 2030, reducing the air pollution that sickens millions of Americans and adds up to billions of dollars in public health costs.
The Inflation Reduction Act supports climate-smart agriculture practices, which will help Arkansas’s 42,000 farms lead on climate solutions and reward their stewardship. Electric cooperatives, which serve about 520,000 homes, businesses and other customers in Arkansas, will for the first time be eligible for direct-pay clean energy tax credits. And this legislation dedicates investments for rural electric cooperatives to boost resiliency, reliability and affordability, including through clean energy and energy efficiency upgrades.
You can read the full list of benefits to Arkansans here.
The transition to clean power will benefit Republican districts around the country — more than two-thirds of renewable capacity can be found in rural districts which are ideologically more conservative.
And as the American Nuclear Society has stated, the IRA provisions for nuclear energy will “help preserve the existing nuclear fleet, and scale-up new and advanced reactors leading to tens of thousands of American jobs.”
The economic opportunities here in Arkansas include boosts to small businesses and some of the state’s most cherished industries, such as agriculture.
In Arkansas, we’re already feeling the impact of an altered climate. For example, summers of unprecedented heat waves are devastating family farms, leaving many farmers to wonder whether they’ll be able to carry on 5th and 6th-generation traditions. What the heat doesn’t destroy, unpredictable tornado seasons, life-threatening floods and a plethora of crop-eating pests threaten to finish off. We must embrace solutions that are good for people and the economy while ensuring we slow the emissions warming our world and causing costly extreme weather events.
The Inflation Reduction Act was passed to clean up the air at home, but we still need to fix the problems it does not address — specifically, while we reduce pollution in the U.S., other countries continue to release heat-trapping gasses into the air, which warms the planet for all of us.
One way to increase responsibility elsewhere is to impose a fee on imported products from nations that release more pollution in their manufacturing process. The E.U. is rapidly moving forward with a carbon border adjustment mechanism (CBAM), which will force countries trading with it to produce products with a lower carbon footprint or pay a fee. We, too, can level the playing field by placing a CBAM on foreign manufacturers undercutting our U.S. businesses with their cheaper, higher carbon-intensive goods.
Now it falls to Republicans to hold other countries accountable. As the new Congress approaches, we urge Senator Tom Cotton, Senator John Boozman, Congressman Steve Womack, Congressman Rick Crawford, Congressman Bruce Westerman and Congressman French Hill to support federal policy that does just that.
With the Inflation Reduction Act now the law of the land, it’s essential our communities in Arkansas secure the full benefits available. We can also send a firm message to high-polluting countries — if you don’t follow our lead, you’ll pay to do business.
Drew Eyerly is Conservative Outreach Director of Citizens’ Climate Lobby. Katie Zakrzewski is a Staff Writer at Arkansas Money and Politics, a conservative organizer and the Communications Coordinator for Citizens’ Climate Lobby.