Attorney General Kwame Raoul joined a coalition of 12 attorneys general in calling on the Department of Treasury and the Internal Revenue Service (IRS) to equitably implement the Inflation Reduction Act (IRA) to reduce greenhouse gas emissions, create good-paying green jobs and help states transition to a clean energy economy.
The IRA, which President Biden signed into law in August, makes the nation’s largest-ever investments in tackling climate change, directing hundreds of billions of dollars toward climate solutions. The IRA, among other things, provides incentives to foster clean energy generation, encourage energy efficiency, and support U.S.-based companies that pay a living wage and offer long-term career opportunities.
In their comments, Raoul and the attorney generals urge the Treasury and the IRS to draw on their states’ expertise with implementing programs to promote the transition to clean energy and offer guidance on centering equity and environmental justice in implementing the law.
“I commend the Biden administration on the passage of this historic legislation that will bring our nation closer to its targets for reducing greenhouse gas emissions, while also providing economic benefits for our state and creating good-paying jobs,” Raoul said. “To achieve these goals, the law must be implemented effectively and equitably with a focus on communities that are most harmed by climate change.”
Raoul and the coalition point out the significant harm climate change has inflicted – and continues to inflict – on the health of communities in the coalition states, including from droughts, flooding, and other extreme weather events. These harms will only worsen over time, the comments note, as will their disproportionate impacts on communities already overburdened with environmental injustices, including Black and Latinx populations and those with low incomes.
The comments suggest ways that the Treasury and the IRS should promote equity and environmental justice through implementation of the IRA’s climate and labor provisions, including proactive public outreach to ensure that communities have opportunities to provide feedback on implementation. The comments also urge the Treasury and the IRS to increase eligibility for low-income taxpayers and to take steps to monitor the IRA’s implementation and ensure that communities burdened by environmental injustices are seeing the benefits of the IRA’s incentives.
Other recommendations include:
- Working with the U.S. Environmental Protection Agency and the Department of Energy to ensure that the IRA creates an incentive for hydrogen fuels and other clean energy technologies with the lowest associated carbon emissions.
- Creating precise definitions for credit-eligible commercial electric vehicles.
- Implementing accountability and enforcement mechanisms for ensuring compliance with prevailing-wage and apprenticeship provisions.
- Urging the Treasury and the IRS to ensure consistency with state home energy efficiency audit programs – including auditor certification programs – and ensuring only low-emission technologies are eligible for energy efficiency credits.
- Developing clear procedures for identifying emissions-reduction technologies and clear policies to prevent tax benefits from accruing to entities with a history of environmental noncompliance.
- Issuing transitional guidance to make clean vehicle credits widely available as soon as possible.
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