A Very Big Deal: New Climate Law Will Impact Every Sector of the Economy


Image by Gerd Altmann from Pixabay

Finally, after nearly 50 years of effort, the United States Senate has passed an ambitious, transformative bill on climate change. This is a very, very big deal. Assuming it passes the House and makes it to President Biden’s desk in the next week, as expected, it will unquestionably be the most important climate law ever passed at the federal level.

The Inflation Reduction Act is 775 pages long and impacts nearly every sector of the economy. At the highest level, it can be summarized like this: It will dramatically cut the price of clean energy, making climate solutions including EVs, solar panels, wind turbines, and heat pumps more affordable and accessible. It will create an enormous number of jobs, importantly including bringing manufacturing of solutions back to the United States. And it will invest billions in communities that have been most hard hit by pollution and are most impacted by the transition away from fossil fuels.

Taken alone, the Inflation Reduction Act will accomplish a lot. Put together with three other major levers and we finally have four major pillars to form the foundation of climate action in the U.S. at a meaningful scale. The four major pillars now in place are:

  1. Massive federal investments. The Inflation Reduction Act, along with the Infrastructure Investment and Jobs Act that passed last November, represent by orders of magnitude the largest investment in climate solutions in the nation’s history.
  2. Significant state policies. In the past several years, there has been a sea change in climate action at the state level. A large number of states including Washington, Oregon, California, Illinois, Massachusetts, New York, and Colorado have passed major climate policies. Taken together, these leadership states represent well over one-third of the population of the nation.
  3. Private sector commitments. Hundreds of businesses have stepped up in recent years to make very large climate commitments, including many of the largest corporations on the planet. While it remains to be seen whether businesses make good on their pledges, there is little doubt that there has been a major shift in much of the business community. 
  4. Local government action. Hundreds of local governments have passed important climate policies in recent years on a wide variety of topics including 100% clean electricity, phasing out of gas in buildings, and transitioning local bus fleets to electric.

This is real momentum.

That said, there are some important caveats to this rosy picture. The Inflation Reduction Act is far from perfect. The bill continues to harm those on the front lines of the climate crisis, particularly those in the Gulf Coast and Alaska. As my friend and long-time climate advocate KC Golden likes to remind me, the first rule of holes is to stop digging. The new federal bill does some more digging, allowing for the continued build-out of fossil fuel infrastructure that will enable increased oil and gas production and continue to pollute the air that too many people will continue to breathe.

Let’s also not forget the reason it has taken so long for this country to get serious about climate change – the fossil fuel industry, more recently often working hand-in-hand with a Republican party that has lost its way on climate change just 14 years after its standard bearer for President ran on climate action. Just because these opponents lost the battle over the federal climate bill does not mean they are done. In fact, the fossil fuel industry is better resourced and as organized as they have ever been. As two examples, consider their efforts to put the brakes on private sector action on climate change and their fierce pushback to transitioning to powering our buildings with electricity rather than fossil gas.

Now the hard work begins. We have a foundation, which is a start. But a foundation does not guarantee anything. It just provides us with the opportunity to turn the promise of massive investments from the public and private sector and strong state and local policies into real progress on the ground. The key next steps include:

  1. Implement and invest well. It is going to take a laser focus from activists, the media, policymakers, and just about everybody to make sure that the bills passed and the dollars invested are done well. This means showing up strong at public utility commission meetings, state regulatory processes, legislative hearings debating how to spend dollars, and more. The amount of policies and investment dollars is unprecedented. So too must be our collective work to maximize the opportunity.
  2. Embed environmental justice into every step and decision. For far too long, many communities have suffered a severely disproportionate impact from the ravages of climate change and associated air pollution. For far too long, the people living in those same communities have been left out of the decision-making process at a meaningful level. While there is starting to be some real progress on this front, it is nowhere near enough. Policy implementation and investment decisions need to prioritize investing in these communities, with meaningful input at the beginning all the way through to the final decisions. Not tomorrow, today.
  3. Spread the benefits of the emerging clean energy economy. It is critical that the benefits of the emerging economy be spread throughout the nation. For the scale of change required, we must build long-term political support to maintain and keep doing more. The best way to do that is to make sure that the benefits reach as many people as possible. This means investing in solutions in rural communities, in Tribal lands, in states that are not historically climate leaders, in low-income communities. Durability requires deep support, and that requires a shift in where we invest and where we focus on implementing our state and local policies. 
  4. Tell more stories and change the narrative. One of the biggest barriers to climate action has been the broadly shared view that making progress on climate change means increased costs for individuals to heat their homes and drive their cars, and a loss of jobs in their communities. That narrative is woven deeply into a large portion of the public, and it is deeply problematic. If we are successful in changing the facts on the ground by creating jobs in rural and urban communities, and if we can succeed in providing affordable solutions, we can also shift that narrative. These policies and investments should create a lot of important stories about jobs being created in communities that have been left behind in the past, about clean electric buses replacing diesel spewing ones that pollute our kids’ lungs, about low-income renters getting a highly efficient heat pump that finally allows them to stay cool in the increasingly hot climate we live in. We need to tell those stories, and flip the narrative on its head.
  5. Break down barriers to building solutions. The scale of renewable energy, electric cars and trucks, batteries, heat pumps now possible is staggering. All of these solutions will be turbocharged with the capital and momentum now available. As a nation, we need to get much better, and faster, at building solutions while balancing other environmental and community needs. It won’t be easy to site solar and wind at this scale, or to find locations to manufacture new heat pumps and critical components in the supply chain for electric cars. But if we want to reach our goals, we are going to have to come together and work through the challenging issues.

I have been working on public policy issues for nearly 30 years. I have never been more hopeful that we can succeed, or more daunted by the many new challenges that these successes will soon unearth. Let’s take these huge wins and build the better future we all want.

Gregg Small
Gregg Small
Gregg Small is the Executive Director of Climate Solutions, a clean energy economy nonprofit that has been at the forefront of establishing the Northwest as a national leader in addressing the climate crisis.


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