August 2022
Last week, Senator Joe Manchin (D -WV) and Sen. Chuck Schumer (D-NY) announced they reached a legislative deal to confront climate change and have since included that deal within the newly announced Inflation Reduction Act (IRA) of 2022.
What follows below is both a statement by the Indigenous Environmental Network as well as a briefing on what this climate deal means and its impacts on our communities.
IEN Statement:
This legislative bill continues where the Infrastructure, Investment and Jobs Act 2021 left off by propping up the same harmful industries Black, Indigenous, People of Color (BIPOC) and frontline communities are fighting now. The so-called “climate deal” is a wholesale investment into destructive climate false solutions designed to line the pockets of the fossil fuel and energy industries and cultivate the growth of the extractive industries.
What does this mean?
The most insidious framework in the bill is the attempt by Senators Manchin and Schumer to buy off BIPOC and marginalized communities by allocating comparatively meager amounts of grants and loans as “environmental justice investments”—dangling a carrot in the face of Tribal communities to open up their lands to harmful practices like carbon capture and storage, hydrogen, nuclear, forest and agriculture offsets, and biofuel development. Similar tactics to gain the support of the labor movement by haphazardly attaching boilerplate “prevailing wage requirements” are seen throughout the bill, without providing any meaningful pathways to a Just Transition for workers and frontline communities. Not only does the IRA ignore frontline communities’ calls to address the climate crisis at its source, the bill exacerbates the climate crisis by stymying the ability for a Just Transition to community-based renewable energy through an unprecedented quid pro quo with oil and gas leasing.
[For educational materials on false solutions read the Hoodwinked in the Hothouse report.]
The Democrats are mistaken if they believe that Indigenous communities will be duped into being a pawn for the fossil fuel industry. At a press conference last week, President Biden described the bill as “the most significant legislation in history to tackle the climate crisis…” It would be more accurate to state the IRA is one of the greatest disappointments coming from this administration. The IRA does not absolve the President from the responsibility to declare a climate emergency and address the crisis at the source. We will continue to pressure President Biden to declare a climate emergency and use his executive powers to stop the extractive industries from causing more violence, death and destruction. President Biden must declare a climate emergency under the National Emergencies Act and keep fossil fuels in the ground.
Below is a non-exhaustive list of some of the reasons IEN does not support the Inflation Reduction Act 2022:
1. The environmental justice investments in the IRA are not what they seem.
The package promises to provide over $60 billion in “environmental justice priorities.” These “priorities” are driven by channels of investments into low-income and disadvantaged communities to develop plans, strategies, capacities, and technologies to reduce emissions and build climate resilience. However, the bill offers no criteria for what qualifies as an EJ provision. As a result, there is no clear way to verify the promised amount of investment. Moreover, a provision that has no positive impact on EJ communities can claim to have EJ priorities.
Investment in provisions with “environmental justice priorities” are distributed in two main ways: 1) Either by the establishment of grants and funds to be administered by the (Biden) Administration, or the Treasury, or 2) increased/new funding for emission reduction and capacity enhancement programs/tax codes.
Overall Environmental Justice Investment Concerns:
While there are promising steps that can make meaningful contributions to environmental justice, the language and scope of some provisions risks perpetuating injustice to disadvantaged communities, particularly to Tribal nations and Indigenous Peoples.
- Eligibility guidelines for EJ provisions allow corporations and large NGOs, detached from on-the-ground realities, to apply for the grants.
- The provisions do not establish a minimum or maximum number of grants recipients but instead insists on a “competitive basis” to distribute the grant. This means that NGOs and for-profit companies can acquire large chunks, or the entirety, or the available funds.
- Nearly every mention of Tribal Nations eligibility for funding is coupled with state agencies, government agencies, non-profits and/or the private sector.
- Because receiver of the grants and funds are chosen on a “competitive basis,” NGOs backed by large corporations and polluters can apply with the resources to gain an advantage.
- Projects can be taken over by for-profit interests of investors even though they go through non-profit organizations.
Sec. 60103: Greenhouse Gas Reduction Fund – $27 billion (pg. 658)
- The Greenhouse Gas Reduction Fund (GGRF) provides $27 billion in funding for accelerating clean energy technologies, and paves the way for a national green bank, or potentially a few regional ones.
- The GGRF will fund and provide technical assistance for “Zero Emission Technologies” and other “qualified projects” to States, Municipalities, Tribal governments, and other “eligible recipients,” which includes NGOs with access to private capital and charitable contributions, and NGOs that invest in or finance projects in “conjunction with other investors.” This means that private entities and investors are eligible to profit from the GGRF.
- The concept of a green bank, or green banks, funded by the GGRF is problematic because the leveraging of private money allows business interests to drive climate mitigation and adaptation agendas. Green banks can also provide investment and production tax credits so the financiers and corporations can continue to benefit. Additionally, it prompts a conflict of interest when it comes to profits, outcomes, and benefit distribution.
- Application of “zero-emission technologies’” with the involvement of the private sector risks the proliferation of false solutions like carbon capture and storage and nuclear energy, and goes in tandem with the push for ESG reporting in Sec. 60111: Greenhouse Gas Corporate Reporting. Ultimately, this gives corporations, not EJ communities, credit for implementing green energy projects to make “sustainability” claims.
- The GGRF funds are only available until Sept. 30, 2024, which is comparatively little time to implement EJ projects, especially community-based projects. The “rapid deployment of low and zero emission products, technologies, and services” could also allow projects to bypass the National Environmental Policy Act (NEPA).
Sec. 60102: Grants to Reduce Air Pollution at Ports – $3 billion (pg. 653)
- Similar to the GGRF, the provisions of Sec. 60102 aim to channel funding to control air pollution at ports, especially in non-attainment areas. However, in this case, “eligible recipients” include both Tribal Governments with jurisdiction over a port authority or a port, and private entities.
- Because the grants are distributed on a competitive basis, entities with more resources and leverage are likely to be in a privileged position to receive the available funding.
Sec. 60501: Neighborhood Access and Equity Grant Program – $1.1 billion (pg. 699)
- Funding is to be managed and distributed by the Administration of the Federal Highway Administration on a “competitive basis.”
- The “eligible entities” section of this provision allow for NGOs and institutions of higher education to participate as long as they are in partnership with a State, local government, political subdivision of a State, a U.S territory, etc.
2. The IRA ensures the increased build out of fossil fuel development.
Instead of establishing a framework for a managed decline of the fossil fuel industry, the IRA – in a quid pro quo framework – ties wind and solar development to oil and gas leasing. Specifically, the IRA frames domestic energy production, including the expansion of fossil fuels, as an issue of national security. The logic goes that by increasing production at-home, the U.S. becomes more energy independent, and therefore, able to better protect its energy sources, markets, and prices.
Sec. 50265 Ensuring Energy Security (pg. 6.44)
- Toted as “energy security,” for the next ten years, the IRA would prohibit any offshore wind lease sales unless the DOI has held at least one offshore oil and gas lease sale within a year before the wind lease sale. The oil and gas lease sale must be at least 60,000,000 acres (p.644).
- This is of particular concern for Alaska Native communities, BIPOC communities in the Gulf South, coastal communities and communities near federal-owned lands.
3. The great majority of the dressed up climate provisions are investments into false solutions like CCS, nuclear, hydrogen, biofuels and carbon trading.
In essence, this bill continues where the Infrastructure, Investment and Jobs Act left off by propping up the same harmful industries BIPOC and frontline communities are fighting now.
Additionally…
- There is an emphasis on increasing domestic biofuel production and infrastructure, especially as it relates to aviation fuel (p.566). The increase of biofuels for aviation fuel is specifically noted as a carbon offset using CORSIA rules.
- Bioenergy with carbon capture and storage is given increased funding.
- Flying planes with Direct Air Capture
- Major investments are given to enhance and broaden CCS technology (including the Carbon Capture Tax Credit (13104).
Sec. 13104: Extension and Modification of Credit for Carbon Oxide Sequestration
- Allows CCS at power plants to qualify for 45Q tax breaks if the CCS removes 75% or more of emissions from the *unit*. This is problematic because there may be more than one unit at a power plant.
- The IRA will increase the 45Q credit amount up to $85 per ton of sequestered CO2 into geologic formation.
- It allows the 45Q tax credit to be transferred to “unrelated persons,” which enables the taxpayer to exchange the credit for money, without it being included on their taxable income.
- There are no restrictions on use for Enhanced Oil Recovery.
- To secure the support of the labor unions, there is language on wages to support CCS (page 235).
Sec. 50144: Energy Infrastructure and Reinvestment Financing (pg. 605)
- Includes financing for fossil fuels and petrochemical feedstock with specific funding for carbon capture and storage.
Sec. 50172 and 50173 Other Energy Matters (pg. 621)
- Billions for nuclear, uranium and more fossil fuels. Including $150 million to the Office of Fossil Energy and Carbon Management,
- The hydrogen section is based on money for dirty hydrogen infrastructure following on from the Infrastructure, Investment and Jobs Act of 2021.
4. Agriculture is awarded investments to quantify carbon and continue the work of setting up soil-based carbon offsets through “climate-smart agriculture.”
Carbon offsets are bought by the fossil fuel and other private industries to falsely claim they are “net-zero” or “carbon neutral.” The first step to build a carbon market is to measure the carbon. Efforts to study, quantify, and track GHG reductions and soil carbon sequestration associated with land-based conservation practices will encourage carbon markets. Increased funding for conservation programs will promote soil offsets for carbon markets. IRA increases funding for biofuels and bolsters national biofuel infrastructure.
Sec. 21002: Conservation Technical Assistance (pg. 536)
- The IRA will provide $1 billion to the Natural Resources Conservation Service along with “technical service providers and other partners” to provide services to enhance soil carbon sequestration. An additional $300 million will fund a program to quantify soil carbon sequestration from agricultural and conservation practices.
- This so-called “verification” program could lead to the increased use of soil offsets on voluntary markets, and/or encourage soil offsets to soon be used on compliance markets. This comes at a time when a lack of sound SOC verification has been cited as a reason for the slower adoption of soil offsets into voluntary carbon markets (and a reason why soil offsets are prohibited from compliance markets like California Cap and Trade and the RGGI).
- This effort (and Sec. 21001 described below) ignores the complicated reality of soil carbon sequestration. Land use changes or natural disasters can immediately reverse sequestration. Sequestration measurements— even on a single farm— can vary by location, depth, time. Fossil carbon and soil carbon are not equal, making it impossible for massive amounts of fossil carbon to be stored in soil.
- The effort will bolden the case for the false solutions proposed in the Growing Climate Solutions Act, which would enable the USDA to establish, coordinate, and promote soil offsets for use in voluntary carbon markets.
- This latest soil sequestration verification system will increase the likelihood of a national carbon bank.
Sec. 21001: Additional Agricultural Conservation Investments (pg. 527)
- While the IRA increases funding to $20 billion over the next four years for the Environmental Quality Incentives Program, Conservation Stewardship Program, Agricultural Conservation Easement Program, and Regional Conservation Partnership Program, the new funds are to prioritize projects that enhance soil carbon sequestration and reduce GHGs. These practices can redirect these historically important and underfunded programs to shift their focus to soil offsets for use on carbon markets where polluting corporations can purchase credits to avoid cutting emissions.
- Under new EQIP funds, USDA will “prioritize proposals that utilize diet and feed management to reduce enteric methane emissions from ruminants.” The USDA supports higher grain diets, certain types of corn, grains/plants with fat, and increased forage to minimize methane output from cattle. If these diet changes are pursued, Big Ag seeks to profit from the increases in monocropping, while Indigenous Peoples and small farming and ranching communities could encounter abuses as land is targeted for agricultural expansion or grazing.
- Under RCPP, there is a special prioritization to “models that pay for outcomes from targeting methane and nitrous oxide emissions associated with agricultural production systems.” This would support increased funding for methane digesters, a false solution that impacts animal, plant, air, and soil health due to runoff.
Sec. 22003: Biofuel Infrastructure and Agriculture Product Market Expansion (pg. 541)
- IRA funding for domestic biofuel production is set to expand as the Alternative Fuel and Low-Emission Aviation Technology Program is given $297 million to utilize inputs, like corn, to be blended into new fuels.
- The IRA provides credits and grants to innovate blended fuels that incorporate biofuels. An increase in biofuels could lead to land grabs for more monocrop production, which increases the likelihood of soil erosion, negative impacts from chemical runoff/water, increased fossil fuel dependency, etc.
- Sec. 22003 provides $500 million for installing, enhancing, and retrofitting national biofuel infrastructure. The grant funding is to provide up to 75% of the “total cost of carrying out a project” that increases the sale and use of agricultural commodity-based fuels.
Sec. 60108: Funding for Sec 211(O) of the Clean Air Act (pg. 670)
- IRA gives $10 million to further develop “advanced biofuels,” which can expand uses for agricultural-based products, such as soybean oil, or gasses from bio-digesters.
5. Like agriculture, the IRA’s forestry efforts aim to increase sequestration, which will benefit carbon markets and the fossil fuel industry.
The forestry section aims to increase funding for the “participation of underserved forest landowners in emerging private markets for climate mitigation or forest resilience…” The “emerging private markets for climate mitigation” are to be used to prop up carbon markets that benefit the fossil fuels industry. This is not environmental justice nor climate mitigation (p.546).
Additionally…
- There is at least 4.5 million in investments to prop up the emerging private markets for forest offsets.
- $1.5 billion for tree planting through the Urban and Community Forest Assistance program. This money can be granted to State and Government agencies as well as non-profits or an Indian Tribe.
Sec. 23002: Competitive Grants for Non-Federal Forest Owners (pg. 552)
- Provides non-federal forest landowners direct funding to increase private markets for climate mitigation. This can allow forest-generated soil offset credits to be used on voluntary carbon markets.
6. The passing of the IRA will secure a future for the fossil fuel industry.
An agreement to a future deal that will “streamline” the permitting process for pipelines and export terminals in exchange for Manchin’s support on the IRA, and this could have implications for NEPA and potentially weakening the Clean Water Act. More on this development in the future.