Biden’s historic climate spending bill includes incentives for clean energy projects, electric vehicles

The Build Back Better act, which the House of Representatives advanced on Friday, would result in chart-topping investments to reduce carbon pollution. Yet its passage by the Senate is far from promised.

House Democrats cheer as US House Speaker Nancy Pelosi, a Democrat from California, right, presides over a vote in the House Chamber at the US Capitol in Washington DC.Stefani Reynolds/Bloomberg

The House of Representatives has passed President Biden’s Build Back Better Act, a $1.75 trillion plan full of social and environmental initiatives. If the Senate passes the bill — which is still a big “if” — it will allocate $555 billion to carbon-reducing programs, marking the largest climate investment in history.

Casey Bowers, assistance vice president of government relations at the Environmental League of Massachusetts, said if passed, the legislation will be “transformative.”

“This bill aligns the nation with Massachusetts’ path to achieve a 50 percent reduction in emissions by 2030. It will also save people money on their energy bills, invest in front-line communities and communities of color, and increase renewable energy,” she said. “It’s notable that our delegation played an instrumental role in its passage — and we are grateful for their leadership.”

The majority of the act’s climate spending would come in the form of tax incentives. More than $300 billion would be allocated in credits for clean energy projects, including installing renewable energy, boosting energy efficiency, and purchasing electric vehicles. In the bill’s current form, the White House estimates that these credits would reduce the cost of installing rooftop solar by nearly a third and shorten the time to recover the cost of that investment by roughly five years.

The bill’s electric vehicle incentives would also reward Americans who buy electric cars with a $7,500 tax credit, with an additional $500 if the vehicle’s battery is domestically made. The act includes another $4,500 for US-made electric vehicles made by unionized workers, which would mark the first time that climate change-fighting tax incentives would ever be linked to labor standards.

Another key program would invest $30 billion to build a new Civilian Climate Corps, a program akin to the Peace Corps or Americorps that could create hundreds of thousands of public jobs. Young people would be employed to work on ecosystem restoration and public land maintenance, and adapt to climate change. The project is loosely based on President Franklin D. Roosevelt’s Civilian Conservation Corps, which in its nine-year run employed roughly 3 million people to build roads, trails, dams, and bridges. The Climate Corps proposal has been harshly criticized by Republicans.

Build Back Better includes another $12 billion in clean energy and efficiency rebates. Half of that pool is earmarked for converting fossil fuel-powered appliances to clean or more efficient alternatives, with nearly two-thirds of that sum set aside for communities most affected by the climate crisis, like Indigenous tribes and low- and middle-income neighborhoods.

The other $6 billion would help Americans with home retrofits to boost energy efficiency, with each rebate totaling up to $4,000. Multifamily-building owners will be able to qualify for up to $200,000 per building for retrofits that reduce energy usage by at least 20 percent, and up to $400,000 for ones with at least 35 percent modeled energy savings. Bigger rebates of up to $8,000 are included for lower-income residents specifically. The bill would also set aside $360 million in grants for programs to train contractors on how to install energy-saving retrofits.

There are other crucial climate and environmental measures included in the Build Back Better act, including money for local fire departments to purchase firefighting foam and gear that do not include toxic “forever chemicals” known as PFAS, increased funding to replace lead service lines and remove lead paint from houses, and grants to reduce pollution at ports. The current version of the plan would also halt the ability for oil and gas companies to drill in the Arctic National Wildlife Refuge while enabling the buyback of all existing leases.

The bill could also improve climate conditions. The plan would impose a fee on fossil fuel producers for emitting methane which one analysis found could raise $250 million while reducing planet-warming pollution. Crucially, the measure also aims to raise more than $100 billion in revenue from fossil fuel companies, mostly by closing a tax loophole regarding overseas income and restoring a lapsed tax for oil pollution.

The act would not, however, eliminate all fossil fuel subsidies, as many climate advocates were hoping it would. The bill leaves $15 billion every year in direct federal subsidies to oil and gas companies intact.

“As the Build Back Better Act moves to the Senate, we’re looking at Sen. Schumer to pass a bill that eliminates fossil fuel subsidies,” Janet Redman, Greenpeace USA Climate Campaign Director, said in an e-mailed statement. “Our tax dollars should support us, not kill us.”

Climate advocates also lamented the removal of a proposed measure to put limitations on conservation funding that would prevent funding from being given to polluting factory farms. And while the current bill would permanently ban offshore drilling in some regions, it would allow its continuation in other areas.

Another key climate provision which was cut from the House’s final bill was the Clean Energy Performance Program. The measure would have incentivized utilities to move to clean power and penalized those that refused.

Erich Pica, president of environmental advocacy group Friends of the Earth, called on the Senate to reinstate these missing provisions.

“It’s now up to the Senate to strengthen and immediately pass a Build Back Better Act that prioritizes people and the planet instead of corporate profits and dirty industries,” he said in a statement.

But the bill’s survival in the Senate is not guaranteed. Though the bill can be passed without Republican approval due to an esoteric process known as reconciliation, more conservative Democratic senators including Joe Manchin and Kyrsten Sinema have not announced their support for the package. It’s already been pared back from its original $3.5 trillion form, and as analyst Stephen Semler recently noted, it would amount to just a small fraction of the $7 trillion in climate, infrastructure, and social spending that Biden campaigned on.

“We’d be lying if we said the Build Back Better Act passing the House was not a historic moment for climate action, but it means nothing if the Senate does not pass it,” Varshini Praskash, executive director of the youth-led climate justice organization Sunrise Movement, said in a statement. “The Senate better pass the damn bill.”