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The new U.S. Bill on climate action

GS Paper 2 and 3

Syllabus: Climate change, laws to govern global warming, regional and global grouping for climate action etc


Directions: Just go through it once. Can be used as examples. Not so important.

Source: The Hindu



  • The S. Senate approved a Bill titled the Inflation Reduction Act (IRA) 2022 with a focus on climate, healthcare and tax provisions to address inflation.
  • The bill is a scaled-down version of President Biden’s Build Back Better Act (BBBA), which failed to get approval from the Senate.

 What are the climate change provisions?

  • Package for the clean energy transition: The Bill marks the largest American investment aimed toward making the U.S. a leader in clean energy.
    • It includes packages worth $369 billion for the clean energy transition.
    • The Bill provides significant investment in renewable energy through heavy tax credits for wind and solar energy projects and electric vehicles.
  • Tax deduction to low and middle-income households: It provides a tax deduction to low and middle-income households to go electric and seeks to lower the energy bills of American households.
  • Bolster domestic production: It also aims to bolster the domestic production of heat pumps and critical minerals.
  • Tax on large and profitable companies to meet the green investment
  • Methane fee: It also imposes a fee on methane leaks from oil and gas drilling.
    • At the same time, the Bill also aims at more investments in fossil fuels.
  • Expand oil and gas drilling: It seeks to expand oil and gas drilling, with the federal government offering land for onshore and offshore drilling with the prerequisite that the entity will develop renewable energy.
    • Thus, it handcuffs the expansion of oil and gas with renewable energy development.

Issues with the bill:

  • Issues of fossil industry: Fossil fuel supporters criticize the bill as it does not take into account the communities that are dependent on the fossil fuel industry for their income.
  • Workers of coal plants: A protest by the workers of a coal plant in the state of West Virginia was recorded after their own Senator Joe Manchin agreed to back the bill.
  • Provisions for fossil fuels: Climate advocates criticise the bill for coupling the development of renewable energy, which is the cause of global warming, with land leasing for oil and gas drilling.
    • The Bill still contains giveaways to the fossil fuel sector.

How does the Bill help the U.S. achieve its climate targets?


Similar climate packages announced by other countries:

  • Invest in Kisida by Japan: In May 2022, Japan announced its ‘Invest in Kisida’ plan which aims for a $1.1 trillion investment to bolster the Japanese economy.
    • As part of the plan, the country aims to transition to clean energy and achieve a 46% reduction in greenhouse gas emissions by 2030.
  • Fit for 55 by EU: In June 2021, the European Union (EU) proposed a similar ‘Fit for 55’ plan to reduce emissions by 55% by 2030.
    • The plan is expected to become law soon.



  • Turning point for global climate action: Thus, the Bill can prove to be a turning point for global climate action as the S. is one of the largest emitters of greenhouse gases globally.
    • However, it does not address any issues of global climate finance which is a major impediment to global climate action.
  • Achieving Paris Agreement: It is a mere step toward achieving the climate target agreed upon in the Paris Agreement, where Article 2 states global temperature should be limited to below 2°C.
  • Benchmark for other emitters: Even though the Bill is not enough to address the climate crisis, such historic initiatives by global leaders in greenhouse gas emissions can be a benchmark for other large emitters to push their climate action programmes.


Insta Links:

Financial and technological commitments under UNFCCC and Paris Agreement


Mains Link

Q. Describe the major outcomes of the 26th session of the Conference of the Parties (COP) to the United Nations Framework Convention on Climate Change (UNFCCC). What are the commitments made by the India conference? (UPSC 2021)


Prelims Link

Among the following crops, which one is the most important anthropogenic source of both methane and nitrous oxide? (UPSC 2022)

a. Cotton

b. Rice

c. Sugarcane

d. Wheat

Ans: B


  • Irrigated rice or paddy crop cultivation has been identified as one of the leading global agricultural sources of anthropogenic methane (CH4) emissions.
  • It has been estimated that global rice production is responsible for 11% of total anthropogenic CH4 emissions.
  • Irrigated rice fields are the major source of methane from rice fields.
  • Although irrigated rice comprises only 50% of the harvested rice area, it produces 70% of the rice harvested.