Schumer-Manchin reconciliation bill: Climate change provisions

Shaun H. Ruff


Senator Joe Manchin (D-WV) exits the U.S. Capitol following a vote, on Capitol Hill in Washington, February 9, 2022.

Tom Brenner | Reuters

Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Joe Manchin, D-W.V., on Wednesday unveiled a long-anticipated reconciliation package that would invest hundreds of billions of dollars to combat climate change and advance clean energy programs.

The 725-page piece of legislation, called the “Inflation Reduction Act of 2022,” provides $369 billion for climate and clean energy provisions, the most aggressive climate investment ever taken by Congress. The bill’s climate provisions (summarized here) would slash the country’s carbon emissions by roughly 40% by 2030, according to a summary of the deal.

The abrupt announcement of the deal came less than two weeks after Manchin, a key centrist who holds the swing vote in the 50-50 Senate, said he wouldn’t support any climate provisions until he had a better understanding of the inflation figures for July.

If passed and signed into law, the act would include funding for the following:

Manufacturing clean energy products, including a $10 billion investment tax credit to manufacturing facilities for things like electric vehicles, wind turbines, and solar panels, and $30 billion for additional production tax credits to accelerate domestic manufacturing of solar panels, wind turbines, batteries and critical minerals processing. It would also include up to $20 billion in loans to build new clean vehicle manufacturing facilities across the U.S., and $2 billion to revamp existing auto plants to make clean vehicles.

Cutting emissions, including $20 billion for the agriculture sector and $3 billion to reduce air pollution at ports. It also includes unspecified funding for a program to reduce methane emissions, which are often produced as a byproduct of oil and gas production, and are more than 80 times as potent as carbon dioxide in warming the atmosphere. In addition, the act allocates $9 billion for the federal government to buy American-made clean technologies, including $3 billion for the U.S. Postal Service to buy zero-emission vehicles.

Research and development, including a $27 billion clean energy technology accelerator to support deployment of technologies that curb emissions and $2 billion for breakthrough energy research in government labs.

Preserving and supporting natural resources, including $5 billion in grants to support healthy forests, forest conservation, and urban tree planting, and $2.6 billion in grants to conserve and restore coastal habitats.

Support for states, including about $30 billion in grant and loan programs for states and electric utilities to advance the clean energy transition.

Environmental justice initiatives, amounting to more than $60 billion to address the unequal effects of pollution on low-income communities and communities of color.

For individuals, a $7,500 tax credit to buy new electric vehicles and a $4,000 credit for buying a new one. Both credits would only be available to lower and middle income consumers.

“I support a plan that will advance a realistic energy and climate policy that lowers prices today and strategically invests in the long game,” Manchin said in a statement on Wednesday. “This legislation ensures that the market will take the lead, rather than aspirational political agendas or unrealistic goals, in the energy transition that has been ongoing in our country.”

The Senate is set to vote on the proposed legislation next week, after which it will go to the Democrat-controlled House of Representatives.

President Joe Biden on Wednesday said the tax credits and investments for energy projects in the agreement would create thousands of new jobs and help lower energy costs, and urged the Senate to move on the legislation as soon as possible.

The president has vowed to curb U.S. greenhouse gas emissions by 50% to 52% from 2005 levels by 2030 and reach net-zero emissions by mid-century. With no reconciliation bill, the country is on track to miss that goal, according to a recent analysis by the independent research firm Rhodium Group.

“This is the action the American people have been waiting for,” the president said in a statement on Wednesday. “This addresses the problems of today – high health care costs and overall inflation – as well as investments in our energy security for the future.”  


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