Taking it on the (Man)chin
We were all set to lead this newsletter with a cranky roundup of the climate policy backtracking that happened in the US and Europe in July … but then the news got a lot rosier! Just when it looked like the coal-industry funded senator from West Virginia was about to sewer any hopes for meaningful climate action, the surprisingly robust $370B USD Inflation Reduction Act was announced. The bill takes aim at runaway inflation by making the biggest climate investment in US history. Finally! Some movement toward what the climate tech/impact investing crowds have been screaming — that investing in innovation that promotes climate sustainability and adaptation is a massive opportunity that will lead to economic growth. To be fair, the bill isn’t perfect and at a global scale there is PLENTY more work to do … but we’re all for celebrating wins as they come, and this is definitely in the “W” column.
Highlights:
Puts the US on track to reduce overall emissions to 40% below 2005 levels by 2030, which is near (but not all the way to) the Paris target.
Long term tax credits that incentivize new technologies to scale more quickly, including clean energy, clean hydrogen, and carbon capture, sequestration and storage.
Tax credits for manufacturing and supply chains, especially for domestic clean technologies.
Incentives to build renewable power generation facilities where coal plants and mines have closed.
And, by creating a minimum 15% tax on corporate profits, closing loopholes and funding tax enforcement, the total package reduces the overall deficit by $300B over a decade.
Our friends at Climate Tech VC have a more detailed summary here
Lowlights:
Requires the federal government to auction new lands and waters for fossil fuel development.
It hasn’t fully passed yet.
We’ve all had conversations with loved ones or strangers about climate change denialism, where it seems like reaching an agreement or changing someone's mind is impossible. Climate legislation in the US had us feeling similarly, but this historic package formed after so much contention (and barring any cataclysms in the ratification process) makes us hopeful that even the most disparate views can come together to make progress on this — the most important issue.