Inflation Reduction Act (IRA)

By Dan Gearino and Aydali Campa - Inside Climate News, October 31, 2023

The shift to electric vehicles is looking better today for U.S. auto workers than it did before a strike against the three major Detroit automakers, thanks to agreements that expand the reach of the United Auto Workers to include battery manufacturing plants.

But the legacy of the strike—at least as it relates to EVs—will depend on the extent to which the United Auto Workers can use its gains from new contracts to build momentum in organizing nonunion plants, like those operated by Tesla, Honda and Toyota.

The union reached a tentative agreement with General Motors on Monday, which follows similar resolutions in recent days with Ford and Stellantis, the parent company of Chrysler. The UAW made several major gains, including provisions that will ease a path to unionization of workers at battery manufacturing plants, even if those plants are not wholly owned by the automakers.

The proposals, which end a strike that began on Sept. 15, still need to be ratified by members.

“We’ve said for months, ‘We refuse to allow the EV transition to become a race to the bottom,’” said UAW President Shawn Fain following the Ford agreement. “Corporate America is not going to force us to pick between good jobs and green jobs.”

EVs are only 8 percent of sales of new cars and light trucks in the United States, but their share is growing as manufacturers introduce waves of new models and as governments and consumers take steps to reduce carbon emissions. Transportation is the country’s leading source of emissions that contribute to climate change.

The Inflation Reduction Act has helped to supercharge investments in EV manufacturing. Much of the investment is at joint ventures between automakers and battery companies, and the UAW was seeking an opportunity to represent this fast-growing part of the automotive supply chain.

By Robert Pollin, Jeannette Wicks-Lim, Shouvik Chakraborty, Gregor Semieniuk, and Chirag Lala - Political Economic Research Institute, September 18, 2023

The report Employment Impacts of New U.S. Clean Energy, Manufacturing, and Infrastructure Laws by PERI researchers Robert Pollin, Jeannette Wicks-Lim, Shouvik Chakraborty, Gregor Semieniuk and Chirag Lala estimates job creation, job quality, and demographic distribution measures for the three major domestic policy initiatives enacted under the Biden Administion—the Inflation Reduction Act (IRA), Bipartisan Infrastructure Legislation (BIL), and the CHIPS Act. Pollin et al. find that, in combination, total spending for these measures will amount to about $300 billion per year. This will generate an average of 2.9 million new jobs within the U.S. economy as long as spending for these programs continues at this level. The newly created jobs will be spread across all sectors of the U.S. economy, with 45% in a range of services, 16% in construction, and 12% in manufacturing. Critically, the study finds that roughly 70% of the jobs created will be for workers without four-year college degrees, a significantly higher share than for the overall U.S. labor market. As such, these measures expand job opportunities especially for working class people who have been hard hit for decades under the long-dominant neoliberal economic policy framework.

Download a copy of this publication here (PDF).

By Sydney Ghazarian - Labor Network for Sustainability, August 17, 2023

Welcome everyone! My name is Sydney, I am an organizer with the Labor Network for Sustainability, and I am honored to facilitate tonight’s Solidarity Call for United Auto Workers Union, which is currently bargaining for a fair contract with the Big 3 Automakers- Ford, General Motors, and Stellantis. 

What makes tonight’s call so special is that it’s a solidarity call by and for the climate movement because we recognize that UAW’s fight is our fight too.

What I love about the climate movement is that we are fighters. And our fight has spanned decades and across generations, and for the last several years, hundreds and thousands of us have rallied, door knocked, made calls, and done sit ins and direct actions to fight for a Green New Deal– which is a society-wide mobilization and just transition to decarbonize the economy while repairing historic harm and creating millions of high-paying, union jobs.

And I want to be clear: Without us fighting for a Green New Deal, there would be no Inflation Reduction Act and its historic investments in clean energy. But we also know that the IRA is not a Green New Deal, and falls desperately short of the Green New Deal’s vision of the world we are trying to build. Rather than massive investments in the public sector, frontline communities, and good, green, union jobs that uplift working people, the IRA invests primarily in private corporations– often the same ones responsible for perpetuating the climate crisis in the first place. 

Unlike the IRA, the Green New Deal understands that the implementation of climate policy, and how resources are distributed to achieve it, are key to ensuring climate justice and ensuring that millions of people are equipped to take that leap of faith away from fossil fuels and into a green economy. 

By Heidi Binko - Rural Urban Bridge Initiative, August 3, 2023

By Al Weinrub - Non Profit Quarterly, July 13, 2023

There are two very different (and antagonistic) renewable energy models: the utility-centered, centralized energy model—the existing dominant one—and the community-centered, decentralized energy model—what energy justice advocates have been pushing for. Although both models utilize the same technologies (solar generation, energy storage, and so on), they have very different physical characteristics (remote versus local energy resources, transmission lines or not). But the key difference is that they represent very different socioeconomic energy development models and very different impacts on our communities and living ecosystems.

Let me start by recounting some recent history in California—the state often regarded as a leader in the clean energy transition.

In recent years, California’s energy system has failed the state’s communities in almost too many ways to count: utility-caused wildfires, utility power shutoffs, and skyrocketing utility bills, for starters. Currently, state energy institutions are advancing an all-out effort to suppress local community ownership and control of energy resources—the decentralized energy model.

Instead, they are promoting and enforcing an outmoded, top-down, utility-centered, extractive, and unjust energy regime—the centralized energy model—which effectively eliminates local energy decision-making and local energy resource development. This model forces communities to pay the enormous costs of unneeded transmission line construction and bear the massive burden of transmission line failures.

Using the power of the state to enforce the centralized energy model is at the heart of California’s new renewable energy tyranny. And this tyranny has now spread to the federal level, as substantial public investment is now set to go toward large-scale renewable energy projects across the country. These projects will be controlled by and benefit an increasingly powerful renewable energy oligarchy. Being touted as a solution to what is popularly regarded as the “climate emergency,” this centralized energy model has actually failed to meet our communities’ energy needs, and at the same time has exacerbated systemic energy injustice.

By Jacob Whiton and Greg LeRoy - Good Jobs First, July 2023

Under a provision of the Inflation Reduction Act, some factories making batteries for electric vehicles will each receive more than a billion dollars per year from the U.S. government, with no requirement to pay good wages to production workers. Thanks to the Advanced Manufacturing Production Credit, also called 45X for its section in the Internal Revenue Code, battery companies will receive tax credits that they can use, sell, or cash out.

The 45X program alone will cost taxpayers over $200 billion in the next decade, far more than the $31 billion estimated by Congress’s Joint Committee on Taxation. On top of 45X and other federal incentives, factories manufacturing electric vehicles and batteries have also been promised well over $13 billion in state and local economic development incentives in just the past 18 months.

What do local communities get from companies in exchange for public money? The Biden administration says the IRA will create “good-paying union jobs,” but the federal tax credit has no job quality requirements for permanent jobs and doesn’t mandate companies pay market-based wages or benefits.

Good Jobs First did the math for five recently announced battery factories. Here’s what we learned:

• Total subsidies will range from $2 million to $7 million per job.

• Average annual wages, as announced, will be below the current national average for production workers in the automotive sector.

• The 45X credit alone is large enough to cover each facility’s initial capital investment cost and wage bill for the first several years of production.

Download a copy of this publication here (PDF).

By Rhiana Gunn-Wright - Hammer & Hope, Summer 2023

I’m an architect of the Green New Deal, and I’m worried the racism in the biggest climate law endangers our ability to get off fossil fuels.

This summer, the earth raged. Fires in Maui and Canada, floods in Delhi and Beijing, heat everywhere — this is the beginning of the climate impacts scientists have long predicted, and the U.S. is unprepared in terms of everything from infrastructure to public health. And if I’m honest, I raged, too. Never in my life have I wished more to be a cyclone, blowing away everything in my path, or an earthquake, shaking everyone to their core until they take seriously the concerns of Black and Indigenous frontline communities.

August marked a year since the Inflation Reduction Act passed, arguably the most significant climate legislation in U.S. history. But the racist compromises and the marginalization of Black people and their demands that facilitated the bill’s passage have seeped into the climate movement, sowing division and narrowing discourse in ways that not only threaten to keep Black people at the bottom of a new green economy but also undermine efforts to address thornier issues, such as who owns energy resources or how to navigate conflicts about resource distribution and land use, questions that money alone cannot answer.

By Betony Jones and David Roberts - Volts, June 16, 2023

Will the US clean-energy transition be hampered by a shortage of electricians, plumbers, and skilled construction workers? In this episode, Betony Jones, director of the DOE’s Office of Energy Jobs, talks about the challenge of bringing a clean energy workforce to full capacity and the need for job opportunities in communities impacted by diminished reliance on fossil fuels.

• Listen HERE
• Transcript HERE

By Yohan Min, Maarten Brinkerink, Jesse Jenkins, and Erin Mayfield - Blue Green Alliance, June 9, 2023

Researchers at Dartmouth and Princeton released a BlueGreen Alliance-funded report on the estimated impacts the Inflation Reduction Act will have on the U.S. wind and solar industry, including changes in wind and solar manufacturing, labor standards for clean energy workers, job creation, and demand for materials. Specifically, the report explores the impacts of the law’s clean electricity production and investment tax credits (PTC and ITC) and the 45x Advanced Manufacturing Production Tax Credit.

The report finds that the Inflation Reduction Act offers wind and solar developers an airtight business case to use U.S.-manufactured components and pay workers fair wages. It has always been the right thing to do. Now it’s also the most economical thing to do. 

By transforming the economics of wind and solar power, the Inflation Reduction Act will spur the creation of millions of new U.S. solar and wind manufacturing and deployment jobs, with strong incentives for fair wages and career pathways.

The findings show strong, unprecedented potential to build our clean energy future on a foundation of good jobs, clean manufacturing, a reliable industrial base, and greater equity.