Inflation Reduction Act of 2022

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The Inflation Reduction Act of 2022 covers a broad array of issues, and this summary focuses only those related to climate change.  

The single largest budget allocation in the Inflation Reduction Act is for energy security and climate change programs. The Act would designate $369.75 billion for these programs over the course of the next 10 years, making it one of the most significant actions by Congress to address climate change.

The Act would combat climate change in four ways: (1) financial incentives; (2) energy efficiency programs; (3) restoration programs; (4) resilience programs; and (5) penalties. 

As for financial incentives, this would come in the form of tax incentives and rebates. To transition American consumers and industries away from fossil fuels, the Act would offer tax credits and rebates for renewable energy technologies, including solar panels, electric vehicles, and wind turbines.  In addition to financial incentives, the Act would invest funds in energy efficiency programs to help decrease industrial reliance on fossil fuels.  On top of that, the Act would provide funding for forest and coastal restoration efforts, as well as funding to help disadvantaged communities monitor and clean pollution. Finally, the Act would penalize companies for excess methane emissions through the imposition of methane fees.