The Inflation Reduction Act for Oregon

Only a few months ago, things were not looking good for federal climate action. The Supreme Court had just voted to strike down the Clean Power Plan. Senator Manchin of West Virginia had just announced he would not support a reconciliation package with new spending on climate change. And, after decades of denial, delay, and failed attempts, everyone’s hope was wearing thin. 

Then, seemingly out of thin air, Senate Democrats announced they had struck a deal on a new package that would inject an unprecedented $370 billion in climate and clean energy programs nationwide. Weeks later, President Biden signed the Inflation Reduction Act (IRA) into law. 

The IRA is hands-down the most significant climate action the U.S. Congress has ever taken, and the bill’s investments will put our country firmly on the path to cutting climate pollution in half by 2030. That means people in Oregon can breathe a sigh of relief that our families and future generations now have a fighting chance at a healthy climate future.

To highlight the magnitude of this legislation, consider that, by 2030, the IRA could:

In the months and years to come, the IRA will supercharge the benefits of Oregon’s existing climate programs and policies, drive down energy costs for Oregon families, boost job creation in a clean-energy economy, and help our communities prepare for and adapt to the impacts of climate change. By increasing our supply of clean renewable power, the IRA will help to create thousands of high-quality jobs for Oregonians, build on our existing clean energy workforce and save Oregon families and businesses money on energy bills. 

To break this down even further, here are just a few examples of how the IRA’s investments will translate into tangible benefits for Oregonians. According to the White House’s own estimates

However, securing the full economic development and climate potential of this law hinges in large part upon strong state and utility implementation.

Clean, Affordable Energy

One of the key drivers of decarbonization and lower consumer energy costs in the IRA is the long-term extension and expansion of clean electricity tax credits. The bill extends the current federal investment and production tax credits for solar and wind energy and establishes new technology-neutral tax credits for all zero-carbon electricity generation. That means more clean electricity sources will come on the market sooner, accelerating the pace of removing fossil fuels from the grid and achieving the goals established by Oregon’s 100% Clean Electricity law, HB 2021. Larger credits are available for projects that meet certain labor standards, which will increase the competitiveness of Oregon clean-energy projects and ensure more good jobs for Oregonians since many of the IRA’s labor standards mirror those in HB 2021.

Significantly, electric cooperatives–which serve about 215,000 homes, businesses, and other customers in Oregon–will for the first time be eligible for “direct-pay” clean energy tax credits, which will make these incentives more accessible. The bill also dedicates nearly $13 billion in targeted investments to help rural communities deploy more clean energy, including $9.7 billion for rural electric cooperatives to boost resiliency, reliability, and affordability, including through clean energy and energy efficiency upgrades, and a further $3 billion for rural energy loans and grants for renewable energy.

Clean, Efficient Buildings

The IRA will increase access to the clean energy economy by helping to ensure that people of all incomes can afford efficient appliances, electric vehicles, rooftop solar, and other clean energy technologies that will cut climate pollution and further reduce energy costs. The IRA also provides $37 billion in clean energy rebates, or upfront discounts, and other incentives for individuals and families, including expanded tax credits for residential rooftop solar, and more than $30 billion dollars in expanded production tax credits to boost domestic manufacturing of clean energy technologies–from solar panels to heat pumps–which will in turn help strengthen domestic supply chains and create good jobs in Oregon. The Blue Green Alliance estimates that these expanded manufacturing tax credits alone will support the creation of more than 67,000 jobs nationwide each year over the next decade.

Clean, Equitable Transportation

Building on the significant investments in the Bipartisan Infrastructure Law, the IRA includes new and expanded tax credits and incentives to address emissions from the transportation sector. This includes consumer tax credits for electric vehicles and billions of dollars in investments in zero-emission heavy-duty vehicles, as well as related infrastructure and workforce development.

Climate-Smart, Resilient Lands, Water, and Rural Communities

Likewise, the IRA will support resilient rural communities in Oregon by investing in farmers and forestland owners to be part of growing climate solutions, injecting billions of dollars into rural electric cooperatives and other clean energy development, and ensuring rural Oregonians are able to better adapt to a rapidly changing climate. Recognizing the vital role that healthy forests, waters, and agricultural lands play in both achieving our climate goals and ensuring a healthy climate future, the IRA also includes key provisions to tackle agricultural emissions like methane, while also investing in resilient forests, oceans, and lands as enhanced carbon sinks.

The IRA injects $20 billion into various agriculture conservation programs to reduce methane emissions, improve soil carbon, sequester carbon pollution, and increase the resilience of our farmlands. The bill also provides $1.3 billion in conservation technical assistance to help producers access and implement these programs. This climate-smart agricultural funding will be critical to help Oregon’s 37,000 farms lead on climate solutions and reward their stewardship. The bill also includes $4 billion for drought relief programs, which will enable water conservation projects and ecosystem restoration efforts through grants and contract support. It will also compensate users for their efforts to reduce water use. $12.5 million in direct financial assistance will be available to Tribes for emergency drought relief, and another $550 million will be available to disadvantaged communities to plan, design, and construct water-supply projects.

As with the other provisions in this bill, states will be responsible for the success of resilience programs through their planning, grant-making, and implementation responsibilities. The Oregon legislature can and should leverage these funds to achieve our climate sequestration and resilience goals, such as moving forward with soil health plans and helping steer landowner incentive programs toward priority regions and practices to ensure that communities with the greatest need can benefit from these funds.

Environmental Health & Climate Justice

The bill also provides $3 billion for community-led projects covering a range of eligible activities, from pollution monitoring and prevention to mitigating health risks from climate events like heat and wildfires, climate resilience and adaptation, and increasing community engagement in public processes like rulemaking. These and other programs in the bill could be powerful force multipliers, especially for underserved communities, by providing resources that can be used to leverage other public and private sector funds for reducing pollution and driving sustainable economic development. 

IRA Force Multipliers

In addition, the law invests $27 billion dollars in a Greenhouse Gas Reduction Fund that has the potential to supercharge the IRA’s investments and further accelerate an equitable transition to a healthy climate future, by transforming the way the U.S. funds clean energy projects. While not explicitly required by the law, the IRA allows for the Greenhouse Gas Reduction Fund to capitalize a national green bank, which would partner with the private sector and community lenders to invest in clean energy technologies and energy efficiency improvements. 

This fund will allocate billions of dollars in competitive grants for states, municipalities, Tribal governments, and nonprofit organizations to invest in clean energy projects, like rooftop solar, and other projects that reduce climate pollution, and prioritize a majority of funding for low-income and disadvantaged communities. According to some analyses, every $1 invested in the GHG Reduction Fund could leverage between $5 and $9 in total public and private sector investment, depending on the project use.

Maximizing the IRA’s impact in Oregon

The IRA is a historic win that deserves to be celebrated. At the same time, there is much more work to be done at the state and local levels to be sure we can make the most of this opportunity. While the IRA provides critical incentives to help accelerate the transition to a clean energy economy, it is up to advocates, businesses, and decision-makers in Oregon to ensure our state is well-positioned to leverage and maximize benefits for Oregon’s climate, jobs, and communities. The extent to which everyday Oregonians see the benefits of these transformative investments will depend in part on whether the state has strong programs and policies in place to implement them.

The 2023 Oregon legislative session will be key to ensuring that Oregon is best-positioned to harness these incentives and maximize benefits for everyday Oregonians. The more policies and programs we have in place to drive down climate pollution and ensure a strong and thriving workforce, the more competitive Oregon will be in securing these funds, and the faster we can translate these investments into real, on-the-ground benefits for our local economies and people across the state. 



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