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Friday, October 7, 2022

Climate Change Legislation Declared to Be “Transformative” for the Automotive and Energy Industries

BusinessClimate Change Legislation Declared to Be "Transformative" for the Automotive and Energy Industries

The Democrats in the Senate have presented a $369 billion climate and tax plan this week. This package may have far-reaching impacts on the kind of automobiles that Americans drive, where those cars are manufactured, and how the nation generates its energy. Another goal of the law is to reduce China’s monopoly on the global battery supply chain.

The plan, which was brought back from the dead when a senator from West Virginia named Joe Manchin III suddenly abandoned his opposition to it, has the potential to significantly accelerate changes that are already taking place in the automobile and energy sectors.

The goal of the idea is to take action against climate change while also stimulating indigenous industry. This would be accomplished, for the most part, via tax cuts and various other incentives. This “carrot” strategy, as opposed to the “stick” one, is likely to be more acceptable in business boardrooms and with voters.

Democrats are proposing to increase monetary incentives for consumers of electric cars, in addition to allocating billions of dollars to automakers, battery manufacturers, and suppliers in the United States so that they may construct or retool plants here. Consumers may get financial assistance to cover the costs of installing solar panels on their rooftops, charging stations for electric vehicles, and heat pumps that are fuel-efficient.

The idea is very flexible and attempts to accommodate the needs of all parties involved in the energy business. There will be a ten-year extension of tax credits for wind, solar, and other forms of renewable energy. Additionally, there will be an extension of tax credits for carbon capture technology, which businesses like Exxon Mobil have invested in.

In addition to providing fossil fuel firms with more access to leases on federal lands and waterways, the plan would also impose a new price on methane emissions that are produced by oil and gas infrastructure.

However, this is not the only thing at risk, according to policy specialists. In addition to it, a substantial amount of industrial policy is included in the statute. It gives an advantage to businesses who get their components and raw materials from the United States or its allies, and it has the effect of barring enterprises from China from participation.

Leah Stokes, an associate professor of political science at the University of California, Santa Barbara, who specialises on energy and climate change, was quoted as saying, “I believe it is clearly a transformative measure.” It will put us on the right path toward fulfilling the objectives set by President Biden. It will result in lower monthly energy costs for all Americans.

Finding strategies to defend the economy of the United States against the threat posed by China has emerged as a primary concern for Congress. On Thursday, the House of Representatives followed the Senate’s lead and approved a package with a total cost of $280 billion that includes incentives to encourage manufacture of semiconductors in the United States. This cross-party legislation was motivated by concerns about becoming dependent on Taiwan for the majority of the world’s most sophisticated computer chips as China maintains its claim to control of Taiwan and works to establish its own semiconductor industry.

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