The passage of the most historic climate legislation in U.S. history should give us a moment of hope for the process of lawmaking and Democracy in our country - a brief, sweet moment of exaltation.
Now on the next beat, as heatwaves, wildfires, and floods rage across the globe, we must also take some time to recognize the urgent need for the legislation and the bitter tradeoffs that occurred with the passage of the Inflation Reduction Act (IRA). We are looking at the sacrifice of millions of acres of offshore oil and gas leases in Alaska, the Gulf of Mexico, and elsewhere before federal leases for renewable energy production can be offered. This means, in many instances, especially in Alaska, that coastal and Indigenous lands are Joe Manchin’s tradeoff for the compromise that got the bill through congress. This is a bad compromise, even with the IRA's historic investment in environmental justice.
On the next beat, it is good to remind ourselves that this is just the starting point for a much larger race to save the planet, defeat racism and protect Democracy. The majority of Americans are with us, and momentum continues toward a just future.
Many of the provisions of the IRA will reverberate in Alaska. The bill contains important apprenticeship and wage requirements that will provide good jobs for Alaskans, and makes sure the clean energy industry catches up to the union-created standards of working that the fossil fuel industry requires.
The IRA substantially increases support for the U.S. Environmental Protection Agency (EPA)'s existing efforts to address methane emissions. It creates a new system of fees that would impose charges on oil and gas infrastructure owners if methane emitted from that infrastructure exceeds specified thresholds. Methane emissions are a significant problem for Alaska's aging oil and gas infrastructure. Methane is a potent greenhouse gas causing steep increases in global temperatures.
The IRA will extend and create clean energy tax credits, including the existing tax credit for electricity produced from renewable resources, which has been a major benefit to the Solarize Anchorage, Fairbanks, Kenai, and Mat-Su programs. The IRA also creates a new tax credit that rural electric cooperatives like ours on the railbelt in Alaska can apply for to finance new clean energy generation facilities. This will make policies to require utilities to adopt renewable energy generation (like the Renewable Portfolio Standard) more financially achievable in the near term.
The IRA creates a Greenhouse Gas Reduction Fund to be funded at $27 billion over the next decade to better leverage private sector investment and community lenders to build wind, solar, electric vehicle, and energy efficiency projects at the community level. Of that money, $7 billion will go directly to state-operated Green Banks. The legislation to establish an Alaska state Green Bank will likely be re-introduced in Alaska in the 2023 legislative session. (Note that previous legislation proposed to put the Green Bank in the Alaska Industrial Development and Export Authority, an agency that lacks transparency and accountability, so many groups opposed this.) With your help, we can ensure that a state Green Bank in a more trusted agency like the Alaska Housing Finance Corporation becomes a reality.
The transition to clean transportation is facilitated by a $4,000 consumer credit for lower/middle income individuals (i.e., couples making less than $300,000 and individuals $150,000 annually) to buy used electric vehicles and a $7,500 tax credit to buy new electric vehicles. We must advocate with our local utilities and governments to continue the rapid build-out of fast charging stations in Alaska.
With the passage of the IRA, there will be many programs and opportunities for individuals, homeowners, business owners, utilities, local governments, state agencies, Tribes, Native Corporations, and NGOs to save energy costs, decrease emissions, and more in Alaska. We need to work with our elected leaders to ensure that the benefits of the new legislation move forward with equity and at a speed that meets the moment of our climate crisis.
Onward!
The Alaska Center
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