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House passes biggest climate investment in U.S. history

On November 17th, 2021, Senate Majority leader Chuck Schumer (D.NY), speaks at a news conference in Washington with House Democrats.

Drew Angerer | Getty Images

House Democrats have passedPresident Joe BidenThe United States’ $1.75 Trillion Social Policy and Climate Bill, which is by far the biggest effort ever made to reduce climate change and greenhouse gas emissions.

This allows the U.S. and other countries to reduce their emissions by 50% by 2030 and attain net-zero emission by mid-century.

This bill allocates $555 billion to climate programs. It mainly does so by providing tax incentives for energy resources that emit low emissions. This is less than $600 billion from the Democrats original $3.5 trillion plan. However, it still ranks as the largest category in Biden’s bill.

If enacted, Biden’s framework would enshrine climate change action in law, making it difficult for future administrations to roll back these measures. In 2009, the last time that America attempted to adopt climate legislation, Congress Democrats did not approve a system of carbon pricing under President Obama. Barack Obama

Climate spending is the largest component of the bill. It includes 10-year tax credits that expand and accelerate investments into renewable power. A proposal is included to increase the tax credit for electric vehicles to as high as $12,500 for those made in a U.S. unionized plant.

Additional climate-related topics are also included in the legislation:

  • Consumer rebates to help customers switch to electrification and clean energy
  • Promoting environmental justice through investing in communities that are disadvantaged
  • A new Civilian Climate Corp was created to conserve public lands and create employment.
  • Investing in soil conservation, coastal restoration and forest management.

American President Joe Biden takes part in a meeting regarding the Build Back Better world (B3W), during the UN Climate Change Conference, (COP26), in Glasgow, Scotland. November 2, 2021.

Kevin Lamarque | Reuters

The president stated that the Build Back Better World will show how we can increase our economies and fight climate change to leave a cleaner, safer, more livable world for our children.

Manish Bapna (president and chief executive officer of the Natural Resources Defense Council) stated in a statement that “this is the most consequential vote in our history.” It’s all about creating jobs and driving innovation. Equity is being advanced and facing the mounting risks and rising costs of climate change.

It could be difficult to get the Senate plan passed. Democrats cannot afford to lose any of their 50 members. And two key Democratic centrists, Sen. Joe Manchin of West Virginia and Sen. Kyrsten Sinema of Arizona, have not endorsed the president’s framework.

Manchin succeeded in sinking the program for clean electricity, an element of President Obama’s original framework. It would have provided incentives to energy companies and punish those who didn’t. Manchin’s State is the top producer of coal and natural gas. Last year, his only source of income was a coal consulting company he started.

Senate Democrats hope to pass the bill before Christmas. They also plan on completing their agenda by next year’s midterm election. If it’s revised, the House must pass the bill once again.

Mike Robinson
Mike covers the financial, utilities and biotechnology sectors for Street Register. He has been writing about investment and personal finance topics for almost 12 years. Mike has an MBA in Finance from Wake Forest University.