US Climate Bill: President Biden Signs the Inflation Reduction Act Into Law

The United States passed a sweeping bill, the Inflation Reduction Act (IRA), which includes the largest investment in climate in the nation’s history. 

One of a few goals in the Inflation Reduction Act, about $370B ([EUR] 372B) will go to climate change planning, mitigation, adaptation, and climate resilience. This is the largest investment in climate by the US and the largest environmental legislation since the Clean Air Act of 1970 [1]. 

The principal goal of the environmental legislation is to reduce the impacts of climate change. Despite this, oil and gas receive carve-outs in the bill, such as fee exemptions for companies responsible for methane leaks and emissions [2], as well as permits for drilling in the Arctic, Appalachia, and Gulf of Mexico [3]. 

Meeting Paris Agreements

The Inflation Reduction Act is a historic investment in climate for the United States, with $150M in competitive grants for climate change mitigation through forest resilience, $100M in forest resilience for small landowners, $50M in carbon sequestration for small landowners, and $15M for climate change planning, adaptation, mitigation, and resilience for US Islands [3]. 

Although many oil and gas companies would be exempt from oversight [4], the bill funds methane mitigation and monitoring–both $850M to the Environmental Protection Agency and $700M to administer charges for methane emissions of petroleum and natural gas production, transport, and storage facilities [3].

Disadvantaged communities receive $3 billion for climate change mitigation and adaptation under the bill including $220 million for climate resiliency and adaptation for tribal partners. In technology, $3 billion goes to low- and zero-emission vehicle development, and $2 billion for electric transmission financing [3].

Additional funding was made available for fire and flood resilience under the IRA:

  • $3B in grants and technical assistance under environmental and climate justice block grants
  • $200M for vegetation management projects
  • $1.8B for hazardous fuels reduction projects on National Forest System land
  • Part of $1.9B goes to neighborhood access and equity grants for flood resilience
  • $2.6B invested for coastal communities and climate resilience

Fossil Fuel Carve-outs

Two Democratic senators signaled their support last-minute, making it possible to pass the bill as a budget reconciliation package with 50 Democratic votes [6]. In addition to climate change funding, the bill supports major drilling projects, with mandatory oil and gas leases in Alaska, Appalachia, and the Gulf of Mexico [7].

For climate-warming methane emissions, the bill targets less than half of the oil and gas sector’s emissions [2], because only large emitters are targeted, while smaller companies skirt regulation. Most oil and gas companies are not subject to the regulation, altogether, small emitters are the greatest segment of greenhouse gas emissions in the US [2]. Methane was 10% of US greenhouse gas emissions in 2019 according to the Congressional Research Service [4].


Under the IRA, the United States is on track for the 50% emissions reductions by 2030 goal for the nation [8]. By funding domestic social and environmental projects for climate, the bill is a starting point for deeper commitments and cooperation from the United States on global climate goals.

Reference List:

[1] A. Rogers, et al., Senate passes Democrats’ sweeping health care and climate bill,, accessed on 8/17/2022
[2]  V. Volcovici and N. Groom, Conceding to Manchin, US climate bill exempts most oil industry from methane fees,, accessed on 8/17/2022
[3] N. Lakhani, Landmark US climate bill will do more harm than good, groups say,, accessed on 8/17/2022
[4] H.R. 5376 – Inflation Reduction Act of 2022,, accessed on 8/17/2022
[5] J. Dlouhy, Oil Drilling on Federal Land Gets a Rare Shake-Up in Climate Bill,, accessed on 8/17/2022
[6] Z. Colman et al., ‘Holy s–t’: Surprise Senate deal sets stage for record climate change package,, accessed on 8/17/2022
[7]  Manchin Wins Big Nods to Oil in Deal Ending Logjam on Climate,, accessed on 8/17/2022
[8] FACT SHEET: President Biden Sets 2030 Greenhouse Gas Pollution Reduction Target Aimed at Creating Good-Paying Union Jobs and Securing U.S. Leadership on Clean Energy Technologies,, accessed on 8/21/2022
Categories North America/Uncategorized

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