The Secret Weapon of the New Climate Bill? Tax Credits

This bill, then, is a stealthy way of driving Americans around as a society towards a cleaner future. Small individual action (you can better afford a heat pump or solar panels) is turning into collective action.

But how much individual change matters in the face of systemic problems has been a thorny debate for years. For example, does it really matter if you decide to fly less to reduce your carbon footprint? After all, air travel is a tiny fraction of global emissions, and there is an entire international economic system that runs almost entirely on fossil fuels. Wouldn’t it be more impactful to change the behavior of, say, the airline or oil industries?

“There’s this debate in the climate community about individual action versus systemic action,” says Jamie Alexander, director of Drawdown Labs at Project Drawdown, a nonprofit that advocates for climate action. “I think this deal helps show how these aren’t really two completely different things. They’re very related, and demand even at the domestic level can help massively change the system.”

One idea among clean energy advocates is that in the power grid of the future, residents will not be consumers so much as participants. If more people have their own solar panels and store energy in large home batteries, such as Tesla’s Powerwall, they can give up some of their extra power when they don’t need it. And if more people park electric cars at home and connect them to a local microgrid, utility operators could tap into those extra batteries at home when there’s a shortage. That would mean people working together instead of relying on fossil fuel-powered utilities to keep the heat on or the air conditioners running.

“I think it’s really empowering, equipping people to address climate change and be better equipped for the world we’re going to be living in as it continues to change,” Alexander says. “Making homes more energy efficient will also help address resilience to climate change and these heat waves we’ve been seeing around the world.”

This month, for example, Texas’ precarious power grid faced another test during a punishing heat wave as people turned on their AC units. But desperately trying to cool poorly insulated homes with inefficient appliances strains the power grid, and this problem will only get worse as temperatures rise. The alternative is to put these types of tax credits to work before the heat gets worse by installing better insulation, thicker windows and ultra-efficient heat pumps, especially in low-income communities. The network—and public health in general—will thank us.

The trickiest part may be finding the manpower to do all this work. Last year, the Biden administration proposed the creation of a Civilian Climate Corps, which would put Americans to work rehabilitating homes and cultivating green spaces that cool urban areas. But that didn’t make it into this new bill. So as the cleantech revolution accelerates in the US, it may not be demand and devices that hold us back, but a shortage of skilled labor to deploy it all.

This new bill isn’t perfect, Casale says. For one thing, it actually calls for more offshore drilling. Nor does it punish companies for not adopting more renewable energy. And it still has to pass the Senate, where it will likely head to a vote in the coming weeks. But the tax credits have the potential to prepare American homes for a green energy future and an increasingly extreme climate. “The tax credits piece is really critical, very exciting,” Casale says. “This is a big step forward, if we can get it to the finish line, despite some of the parts that are definitely not perfect.”

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