Summer Sun, Somethin’s Begun; Let’s Talk Climate Legislation
I got chills, they’re multiplying — because after over a year of on-again off-again negotiations, the Inflation Reduction Act finally passed through the U.S. Senate this past weekend, and is now making its way through Congress (hopefully, like greased lightning). The bill seeks to invest in energy initiatives, lower the cost of medicine, and curb the deficit, primarily through the introduction of new corporate taxes. Of the $740bn package, $375bn will directed to investment in fighting the climate crisis over the next decade, under the “energy” bucket.
Why do we care? ’Cause the power this bill’s supplying, is electrifying! Among the incentives to be funded under this legislation are tax credits for consumers who add renewables to their household energy mix, such as heat pumps (see our prior newsletter!), rooftop solar, and electric HVAC. In addition to this, $60bn has been directed to production tax credits for solar panels, wind turbines and batteries within the U.S., and of course, something automatic, systematic and hyyyydramatic: electric vehicles, or more specifically tax credits for lower- and middle- income buyers to purchase new or used EVs.
Tell me more, tell me more, you say? Will this get very far? This climate spending package has already made it further than anticipated, largely due to the centrist West Virginia senator Joe Manchin who made the unexpected decision to support the bill a few weeks ago. While this is a positive moment in U.S. (and arguably global) climate policy history, it was also ultimately a bargain struck between the Democrats and the likes of Joe Manchin, a coal company owner, speaking on behalf of the of fossil fuel industry and its corporate donors. In exchange for agreeing to the bill, Manchin will get the greenlight from the President, the Senate and the House for the Mountain Valley gas pipeline to be completed which has long been delayed by legal fights with local communities and environmental groups.
While this bill will certainly help the U.S. to shape up in its contribution to mitigating the climate crisis and emissions will fall, a lot — the fossil fuel industry is not necessarily being challenged on its business model nor incentivized to cut back. The bill would impose fees on excess methane emissions from oil and gas drilling but would also create access to more leases for drilling on federal land and waters. Tax credits for nuclear power and carbon capture technology are also a step in the right direction, although these technologies have been heavily invested in by companies such as ExxonMobil, who also stand to benefit from these new credits.
Carbon dreams, ripped at the seams? We think not. No matter the means, the outcomes of this bill when executed should be unarguably positive, putting the U.S. on the path to 30–40% lower emissions by 2030 when compared to 2005 levels, which is still meaningful in respect of Biden’s initially intended 50–52% target with the Inflation Reduction Act. Our sister company, YvesBlue, estimates that even with the bill’s fossil fuel provisions, every additional ton of GHG emissions generated will correspond to 24 tons of emissions saved, avoided or reduced.
Source: Rhodium Group
And at FWP, we’re gonna prove (and better prove), that our faith is justified: these clean energy topics, ideas and technologies that we’ve been tracking and investing in since our inception, are the ones that we want (ooh, ooh, ooooh, honey!)
Hayley Mole, Vice President
While all this has been happening, Australia’s House of Representative has also passed a landmark climate bill to cut the country’s emissions back by 43% by 2030, relative to 2005 levels, and to reach net zero by 2050. As the world’s driest continent and also the third largest fossil-fuel exporting nation, Australia is also playing catch-up on climate legislation, but are now doing so with both ambitious goals and third party accountability to meet them through giving authority over monitoring to an independent group of experts, the Climate Change Authority. We don’t get much good “G” (governance) in our ESG chats, but once in a while, someone shows us how it can be done.
A new green-roof law in France requires all commercial buildings to have their roofs covered with either solar panels or with greenery. As a strong advocate of filling small spaces with houseplants, I found this list of ideas to transform your own small rooftop or terrace into something green.
The Grease theme of this newsletter was no accident as we pay homage to Olivia Newton-John, after her passing this week. The actress and singer was also a devoted campaigner for environmental and animal rights, and a Goodwill Ambassador to the UN Environmental Program.
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