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What will the climate bill do for environmental justice?

The Inflation Reduction Act will make historic investments in disadvantaged communities with provisions for renewable energy, electrified transportation, environmental review and cleaner air.

Activists rally near the White House in April to press for passage of climate justice legislation. (Paul Morigi/Getty Images)
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Editor’s note, August 12: This story was originally published on August 10, 2022. It has been updated to reflect the passage of the bill by Congress.

The breakthrough bill that passed the House and Senate with $369 billion in climate funding includes up to $60 billion in environmental justice initiatives. (That figure depends on what you count, of course.) The money is intended to help communities of color and low-income areas that have been overburdened with pollution and pushed to the front lines of climate change by historically racist and classist practices.

The once-in-a-generation investments” in the Inflation Reduction Act will greatly benefit people adversely impacted by fossil-fuel operations and climate crises,” Dana Johnson, senior director of strategy and federal policy at WE ACT for Environmental Justice, told Canary Media.

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Senator Edward Markey (D-Massachusetts), who worked on some of the environmental justice provisions in the act, said in a statement prior to its passage that it would be the most significant investment in environmental justice and climate action in American history.”

So what exactly are the bill’s environmental justice investments? Here are some of the heftiest: 

  • $15 billion for projects that reduce greenhouse gas emissions in low-income and disadvantaged communities. This is part of a larger $27 billion Greenhouse Gas Reduction Fund, which will act like a federal green bank. The fund will provide competitive grants, loans and low-cost financing for clean energy projects (rooftop solar and electrified transportation, for example), and ideally will stimulate high levels of investment from the private sector. Leah Stokes, professor and climate policy expert at the University of California, Santa Barbara, recently told Canary Media Editor-at-Large David Roberts that the $15 billion for low-income and disadvantaged communities — more than 55 percent of the fund — is a major victory for environmental justice advocates. The money is split across two pots: $7 billion for zero-emissions technologies and $8 billion for other projects that help slash climate-warming emissions.

  • A projected $11 billion for cleaning up industrially polluted Superfund sites. These toxic sites — which harbor pollutants that threaten human health, including lead, trichloroethylene and benzene — disproportionately affect communities of color and low-income residents. The new funding for Superfund cleanups will be raised from a reinstated and beefed-up tax on oil production and import of 16.4 cents per barrel.

  • $3 billion for environmental and climate justice block grants for community-led projects. These grants will go toward community initiatives that track and combat air pollution and urban heat, fund climate resiliency and invest in clean energy, such as community solar. Johnson of WE ACT said that many communities already have projects they’ve started to develop. This [funding] gives them the flexibility and the autonomy to really pursue them.” The block grants can also be used to help community members participate in state workshops and rulemakings.

  • $3 billion for neighborhood access and equity grants. Communities that have been divided by highways or other infrastructure barriers will be able to use these funds to help them reconnect. Communities can also invest the funds in public transportation.

  • $3 billion in grants to clean up air pollution at ports. With these grants, port authorities will be able to buy and install zero-emission trucks and equipment that will allow port communities, which are often lower-income communities of color, to breathe easier.

  • $1 billion in grants for local governments to purchase zero-emission heavy-duty vehicles, such as school buses, transit buses and garbage trucks. This is another really important” provision, said Johnson. We want to see our public buses electrified to reduce pollution.”

  • $1 billion in grants and loans to make affordable housing more energy- and water-efficient and climate-resilient. Qualifying projects include weatherizing buildings and installing heat pumps, home batteries, rooftop solar and low-flow water systems. Given the high number of federally supported housing units, though, that could mean less than $200 for each one.

  • A bonanza of rebates worth thousands of dollars for low-income families looking to electrify their homes. From Canary Media’s Jeff St. John, here’s a breakdown of what households earning 80 percent or less of area median income could get: up to $8,000 to cover the full cost of equipment and installation for a heat pump for space heating, up to $1,750 for a heat-pump water heater, up to $840 for an electric stove or electric clothes dryer, and up to $1,600 for insulation, ventilation and sealing. Those that need to upgrade their household electrical system could receive up to $4,000 for an upgraded electrical panel and up to $2,500 for upgraded electrical wiring.”

Sylvia Chi, senior strategist at the Just Solutions Collective, also lauded a provision that could bring wind and solar projects to disadvantaged communities. The bill will offer extended tax credits to developers of clean energy projects, plus a 10 percent bonus for projects sited in low-income communities and another 10 percent for projects on land contaminated with industrial pollution or within energy communities” that have historically depended on coal, oil or fossil gas.

Chi pointed out another juicy and wonky provision in the bill: Tax credits for clean energy projects will have a direct-pay” option. Currently, wind and solar tax credits are applied against an organization’s annual tax bill, so companies that owe sizable amounts of tax can most easily access them. Nonprofits and other tax-exempt entities — such as rural electric cooperatives, publicly owned utilities, and state, local and tribal governments — now need to partner with banks or corporations with big tax liabilities in order to take advantage of the tax credits. But that’s an uncertain and often expensive proposition. Under the Inflation Reduction Act, nonprofits could get direct payments for tax credits from the federal Treasury — unlocking far broader potential for the communities that most need clean energy to deploy it. 

Smaller environmental justice gems

The bill also has smaller provisions poised to serve environmental justice goals.

For example, the bill will provide a much-needed $281 million to state agencies for air-quality monitoring. Air monitors are not equitably distributed,” Johnson said. She cited the example of northern Manhattan in New York City, where WE ACT is based: Four of the five bus depots in the city are in northern Manhattan,” but we only have one air quality monitor in our community.” This provision gives us an opportunity to really dig deep and have the data that we need to monitor what’s happening,” she said. 

The bill will also provide $697 million to federal agencies to conduct environmental reviews and gather community input for major infrastructure projects, WE ACT estimated, a process required under the National Environmental Policy Act of 1970. These reviews historically have been underfunded, according to Johnson. 

When agencies carry out robust impact studies under NEPA, communities are able to make their voices heard about whether a proposed project could expose them to pollutants or tear their social fabric, as well as suggest solutions. The community-engagement piece is so important and critical,” said Johnson. You bring government, the private sector and the community together to really come up with the best [approaches] for moving a project forward and preventing harm.” 

Word on the street

The success of the bill’s billion-dollar grant programs will now hinge on thoughtful implementation, according to Sneha Ayyagari of the racial and climate equity nonprofit The Greenlining Institute. Government agencies will need to get the word out early and often — for example, through partnering with existing advocacy networks — to engage potentially under-resourced community groups.

Organizations that…aren’t as familiar with the process or are dealing with the realities of climate injustices might take a bit more time to gather an application,” said Ayyagari, clean energy initiative program manager at Greenlining. 

To give community organizations the best chance of success, administrators could assist them with the technical aspects of applying and connect them with other groups to create regional learning networks, according to Ayyagari. A model might be California’s Transformative Climate Communities program, which helps groups develop their project ideas and implement them, she said. 

Without these kinds of support strategies, there is a real risk of perpetuating the status quo,” with most of that funding going to people who already have the capacity to apply for those grants, like wealthier cities,” said Ayyagari. We have such a widening racial wealth gap. […] It’s important to see how we can use this funding as a way to really deliver the economic, environmental and health benefits.”

The good and the ugly

For all its environmental justice provisions, advocates have pointed out that the bill is not all roses. Thorns include permitting reform that could expedite fossil fuel projects and a mandate to auction offshore oil and gas drilling leases in step with offshore wind leases, which could threaten coastal communities of Alaska and the Gulf of Mexico. Those compromises don’t support transitioning our economy in a way that sets all Americans up for environmentally sound, economically vibrant communities,” said Johnson. 

Ayyagari shares the sentiment: We think there’s still significant work that needs to be done to address the long legacy of environmental injustice.”

Still, the bill is historic,” she said. We need such climate policy action at the federal level.”

Alison F. Takemura is staff writer at Canary Media.