Inflation Reduction Act (IRA)

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.

By Kenny Stancil - Common Dreams, May 31, 2023

"Total employment in the nationwide U.S. energy sector could double or even triple by 2050 to meet the demand for wind turbines, solar panels, and transmission lines," according to a new study.

Achieving net-zero greenhouse gas emissions in the United States by mid-century would lead to a net increase in energy-related employment nationwide, and Republican-voting states whose leaders have done the most to disparage climate action would see the largest growth in green jobs.

That's according to research published in the latest issue of the peer-reviewed journal Energy Policy. The new study, summarized Tuesday by Carbon Brief, undercuts the old right-wing canard that environmentally friendly policies are inherently bad for workers.

Four academics led by Dartmouth College engineering professor Erin Mayfield found that shifting to a net-zero economy could create millions of jobs in low-carbon sectors—enough to "offset" losses in the declining fossil fuel industry, not only in the aggregate but also in most dirty energy-producing states, which tend to be GOP strongholds.

"Total employment in the nationwide U.S. energy sector could double or even triple by 2050 to meet the demand for wind turbines, solar panels, and transmission lines," Carbon Brief reported. Such growth in clean power generation and dissemination "would outweigh losses in most of the country's fossil fuel-rich regions, as oil, coal, and gas operations close down."

The study adds to mounting evidence that so-called "red" states now dominated by Republicans and fossil fuel interests—including particularly sunny and windy ones like Oklahoma, Texas, and Wyoming—stand to reap the biggest rewards from the green industrial policy provisions in the Inflation Reduction Act passed by congressional Democrats and signed into law by President Joe Biden last year.

At the same time, the authors acknowledge that some GOP-controlled dirty energy-producing states, such as North Dakota, are likely to see net decreases in energy sector employment, and they stress that "many communities will still require help to ensure a 'just transition' away from fossil fuels," as Carbon Brief noted.

By Kenny Stancil - Common Dreams, May 24, 2023

"It's time that the steel industry take the growing need and demand for fossil-free steel seriously," said one advocate.

Progressive organizers on Wednesday urged steelmakers to swiftly adopt the clean manufacturing methods needed to achieve a shift from coal-based steel to "green steel."

At the Great Designs in Steel conference held in a Detroit suburb, Public Citizen and Mighty Earth activists used a series of digital ads and mobile billboards to call on industry insiders and automotive executives to accelerate the nascent transition from dirty to clean steel by fully embracing low- to zero-carbon production processes—one of many changes that scientists say are necessary to avert the worst consequences of the fossil fuel-driven climate crisis.

"Steel manufacturing remains one of the most energy-intensive and polluting aspects of making a vehicle, but there are solutions to clean it up," Erika Thi Patterson, supply chain campaigns director at Public Citizen, said in a statement. "As companies and governments work to meet net-zero climate commitments, it's time that the steel industry take the growing need and demand for fossil-free steel seriously and embrace the cleaner technologies that exist today."

"Insiders at this conference," Patterson continued, "need to recognize the inevitability of green transportation and move in that direction quickly and forcefully."

At the conference venue, mobile billboards denounced steelmaker Cleveland-Cliffs Inc.'s recent announcement that it plans to stick with coal-powered blast furnaces in the near term. Rival company U.S. Steel, by contrast, is ramping up the use of lower-emission electric arc furnaces at its mini-mills.

Billboards with the message, "Cleveland-Cliffs: Ditch the past, embrace the Green Steel future!" circled the venue for the duration of the meeting.

By Katie Myers - Grist, May 11, 2023

In the Mon Valley of western Pennsylvania, steel was once a way of life, one synonymous with the image of rural, working-class Rust Belt communities. At its height in 1910, Pittsburgh alone produced 25 million tons of it, or 60 percent of the nation’s total. Bustling mills linger along the Monongahela River and around Pittsburgh, but employment has been steadily winding down for decades.

Though President Trump promised a return to the idealized vision of American steelmaking that Bruce Springsteen might sing about, the industry has changed since its initial slump four decades ago. Jobs declined 49 percent between 1990 and 2021, when increased efficiency saw the sector operating at its highest capacity in 14 years. Despite ongoing supply chain hiccups and inflation, demand continues growing globally, particularly in Asia. But even as demand for this essential material climbs, so too does the pressure to decarbonize its production.

Earlier this month, the progressive Ohio River Valley Institute released a study that found a carefully planned transition to “green” steel — manufactured using hydrogen generated with renewable energy — could be a climatic and economic boon. It argues that as countries work toward achieving net-zero emissions by 2050, a green steel boom in western Pennsylvania could help the U.S. meet that goal, make its steel industry competitive again, and employ a well-paid industrial workforce.

“A transition to fossil fuel-free steelmaking could grow total jobs supported by steelmaking in the region by 27 percent to 43 percent by 2031, forestalling projected job losses,” the study noted. “Regional jobs supported by traditional steelmaking are expected to fall by 30 percent in the same period.”