Climate Change is an issue that impacts the lives of everyone. It is a global problem and we need a collective effort to mitigate global warming. As a result, nearly every nation signed the Paris Agreement during COP 21, the UN Climate Change Conference, which basically outlined the framework and goals the world must achieve to avoid the calamitous consequences of world heating. One of the goals of said agreement is to reach net zero carbon emissions by 2050. What this means is that all carbon emissions by humans will be counteracted by other efforts, like carbon removal, to essentially have zero carbon emissions. To no one’s surprise, the United States is the country that emits the most CO₂ with projected emissions reaching 4,971 million metric tons of carbon. However, the Biden Administration has in fact passed legislation to combat the rising carbon levels. The Inflation Reduction Act (IRA) is one of the largest U.S federal laws outlining a 10 year plan to curb inflation, reduce federal debt, as well as lower drug prices. But most important regarding the topic of discussion, the Inflation Reduction Act details the largest piece of nation wide legislation to address the issue of climate change. Essentially the Inflation Reduction Act incentives renewable energy through the implementation of a variety of programs and tax breaks.

One of these programs that the IRA introduced are the “Investment Tax Credit”, ITC, and the Production Tax Credit, PTC. These two credits allow tax-payers in the United States to receive taxable deductions based on the cost and use of one’s renewable energy system. If you have solar, wind, geothermal, or tidal energy systems, you are eligible for both ITC or PTC. Other forms of renewable energy may only receive benefits from one or none of the programs. The investment tax credit stems from the cost of the appliances. Based on the Inflation Reduction Act, taxpayers are allowed to deduct 30% of expenses revolving renewable energy off of their federal tax. On the other hand, the production tax credit is based on the amount of electricity one uses.  For every kilowatt per hour produced from a renewable source, one would receive $0.0275. The average household used around 10,800 kilowatts per hour. That would mean the average household would get a writeoff of around $300 every year using renewable energy. The catch is that you can only use one of the tax credit programs so choose your plan based on your particular circumstances. 

The Inflation Reduction Act is a step in the right direction for the United States. However, climate change isn’t a national issue, it’s a global one affecting every corner of our world. Under the Biden Administration, less than 2% of the federal budget is allocated towards climate mitigation. Moreover, although commonly misrepresented, foreign aid similarly stands at around 1.5% of the federal budget. Just to put this in perspective, USAID, an agency dealing with international aid, receives about 50 billion dollars, slightly higher than the Small Business Administration. USAID gets less funding than the Department of Justice, the General Service Administration, and the Department of Labor just to name a few. All of the departments listed are essential for the sustainability of the United States but they don’t have as large of a responsibility compared to USAID, an agency that works on an international level. What we need is a substantial increase in the budget of agencies that deal with climate change nationally and internationally (USAID, EPA, etc). We need to promote legislation, like the Inflation Reduction Act, that mitigate the advancement of global warming. But most importantly, we need to enforce and educate the masses of such legislation. What is the point of such tax incentives if people don’t know about it? Without a discernible plan of action to deal with the widespread effects of climate change, not only will we not achieve carbon neutrality by 2050, billions of people will have paid the price for our inaction. But hey, it’s just a thought!