A Republican push to dismantle clean energy incentives threatens to reverberate across the US by costing more than 830,000 jobs, raising energy bills for US households and threatening to unleash millions more tonnes of the planet-heating pollution that is causing the climate crisis, experts have warned.
A major tax bill passed by the Republican-held House of Representatives on Thursday morning will, as currently written, demolish key components of climate legislation signed by Joe Biden that has spurred a record torrent of renewable energy and electric vehicle investment in the US.
Under the reconciliation bill, tax credits for cleaner cars will end this year, with incentives for wind, solar and even nuclear energy projects scaled down and then eliminated by 2032. Clean energy manufacturing tax credits will be axed by 2031, while Americans seeking to upgrade their homes to cleaner or more energy efficient appliances will get no further subsidy after the end of this year.
“This bill is worse than what people envisioned – it pulls the rug out from facilities banking on these incentives, it raises everyday household costs by hundreds of dollars and undercuts any sort of action on climate change,” said Robbie Orvis, senior director at Energy Innovation, a non-partisan climate policy thinktank.
“You can’t overstate how significant this will be in weakening the US’s position. With inflation, tariffs and rising electricity use, it really couldn’t come at a worse time. It’s a really damaging bill.”
Since the passage of the 2022 Inflation Reduction Act, more than $320bn has flowed mostly to Republican-held districts in the form of new clean energy development and electric car construction. A further $522bn in investment is in the pipeline but is now menaced by the Republican bill’s removal of tax incentives.
“You’re talking about half a trillion dollars of investment at risk from these changes,” said Orvis. “Over 10 years, we found that these changes would reduce US GDP by over $1tn.”
The legislation also follows months of attacks on green spending from the Trump administration, including the end of energy efficiency programs and climate-focused grantmaking and loans.
“If you take all of that together, all of these pieces have the same effect: it’s going to increase prices on everybody,” one former senior Department of Energy official said.
Republicans wrangled over how far to slash the IRA’s tax credits.The bill as it stands will cause Americans’ energy bills to spike by stymying new renewable energy – often the cheapest form of new electricity generation – the non-partisan thinktank Energy Innovation calculated. The average household will see their bills rise by more than $230 by 2035. This…
Read More: Trump’s tax bill to cost 830,000 jobs and drive up bills and pollution
