Highlight
- The IRA is expected to generate a number of benefits for consumers over the next 10 years beyond the anticipated GHG reductions. These include: up to $28,500 in incentives to buy electric vehicles or appliances; up to $1,800 in annual energy costs saving; 1.5 million new jobs nationwide; and 3,900 lives saved by 2030 due to improved air quality. If the federal funding amount for EV incentives are apportioned equally by population, California would receive $1.5 billion.66 One of the requirements for these EV credits is that the batteries are manufactured in North America, and automakers have already announced new investments in domestic manufacturing. As of October, automakers have announced more than $13 billion in domestic EV manufacturing investments and $24 billion in batteries in 2022. Compared to 2020, that is three-times the amount invested in domestic EV manufacturing and 28 times the investment in batteries.67
66 Josefowitz, Nick. “The IRA Is Historic, but We Still Need Prop. 30 to Fight Climate Change.” SPUR. September 14, 2022. Available at: https://www.spur.org/news/2022-09-14/ira-historic-we-still-need-prop-30-fight-climate-change
67 Ma, Michelle. “ Companies are finally investing in making EVs in the US. Here’s a running list.” Protocol. October 19, 2022. Available at: https://www.protocol.com/climate/ira-ev-tax-credits-us
Opportunities
- Through the IRA, the federal government has set aside $27 billion to create a national green bank, which it also calls the Greenhouse Gas Reduction Fund (GGRF). The purpose of the fund is to provide at-will, low-interest loans for green projects which might struggle to get funding through traditional means. $20 billion of the funding will be distributed by the U.S. Environmental Protection Agency to clean energy projects by non-profits, and the remainder will be set aside for state and local governments to use in less-advantaged communities.68 There are encouraging signs that these funds can be deployed as soon as the green bank is established. A survey of the American Green Bank Consortium suggests there is already a $21 billion backlog of eligible projects, including $15 million worth of residential energy projects in California.69
- California’s agricultural sector, which is responsible for 11 percent of national agricultural demand,70 stands to win its share of support from IRA funding for green farming and ranching. The Congressional Research Service estimates that there will be a total of $82 billion spent on agriculture nationwide over the next 10 fiscal years. Of this, $13.3 billion will be spent to support grants for energy-efficient farming, and $8.5 billion will go to individual emissions reduction and conservation products through the Environmental Quality Incentives Program.71
68 “Establishing a national green bank with the GHG Reduction Fund will reduce emissions, promote environmental justice.” Ken Berlin. September 28, 2022
69 “National Green Bank: Project Ready Day One” Coalition for Green Capital
http://coalitionforgreencapital.com/wp-content/uploads/National-Green-Bank-Project-Ready-Day-One.pdf
70 “Agricultural Facts” Plant Sciences- California Polytechnic University-
https://aeps.calpoly.edu/about/hortfacts
71 “Inflation Reduction Act: Agricultural Conservation and Credit, Renewable Energy, and Forestry” Congressional Research Service. August 10, 2022
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