I don’t begin to understand quite how the US political system works, but it seems like the last few days have seen something very unusual happen. No, I’m not talking about the FBI turning up to a former president’s home with a search warrant and breaking into his safe. I’m referring to the largest climate investment in US history – the Inflationary Reduction Act. Thanks to a tie-breaking vote from Vice-President Kamala Harris, this Democrat-backed bill has just passed through the Senate.

The act aims to curb inflation in the US by reducing the deficit, lowering prescription drug prices and investing into domestic energy production while promoting clean energy solutions. Estimates suggest that it could help the Biden administration achieve 80% of its goal of halving overall emissions by 2030.

Driving employment

Virtually all experts agree that the bill will dramatically increase the need for labour. The IRS will need thousands of additional employees and thousands more again will be needed to retrofit insulation and green energy solutions to existing homes. Now that would be a good idea for a Tory leadership candidate, just in case any are reading this on the Tube!

This need for extra manpower does raise an additional issue of where the workers are going to come from. The extraordinarily tight US labour market may result in a revival of the immigration reform debate next year.

Taxing corporations

The bill that’s passed includes caps on the cost of drugs for older citizens (which we are of course broadly insulated from via the NHS once we’ve paid the taxes used to run the system) and will pay off some of America’s national debts.

The money needed to fund this will be raised by new corporate taxes, including one designed to ensure big corporations can’t skip paying any tax at all. (Which rather begs the question of how anyone has been getting away with that in the first place?) Companies making more than US$1bn in profits will pay 15% tax, a rule which is estimated to raise around US$285bn over the next decade. Some of this money will be aimed at recruiting more people for the IRS, with a view to going after tax cheats. I wonder if that will include anyone famous who lives in Florida and is currently looking for a new safe?

Tackling climate change

The bill also invests US$375bn – which is a number so large I can’t get my head round it – in strategies to fight climate change. Included are incentives to manufacture and install solar and wind farms as well as using carbon capture technology. As I understand it, this concept of effectively sucking carbon out of the air and hiding it in a drawer in the spare room for a few thousand years is yet to be proven to actually work on a commercial level and is therefore unlikely to immediately help reduce the carbon in the atmosphere.

Both new AND used electric vehicles will enjoy tax breaks of US$7,500 and US$4,000 respectively. Imagine that being implemented here in the UK; at a stroke, EVs would be less expensive to buy than the fossil fuel alternatives, which, combined with much lower running and service costs would encourage a lot more people to make the switch.

The severe drought in the west is also on the agenda, with tactics to combat it including conservation in the Colorado River basin. If the US find a drought solution, perhaps they can let us know; green and pleasant Kent is looking more like a desert with each passing day of our dry and very hot summer.

Having rejoined the Paris Agreement on his first day in office, Biden signalled his intent to move tackling climate change back up the US agenda. With this Inflationary Reduction Act making it through the split Senate, he’s proving his commitment to the cause. Hopefully other nations, including our own, will take notice and follow suit with the large-scale reforms required to hit global temperature targets. After all, there’s only so much difference we can make as individuals with our reusable water bottles and shopping bags…