‘Big Beautiful Bill’ Set to Slash Through U.S. Climate and Justice Drive – Inside Climate News

In the end, President Donald Trump’s giant tax and spending plan rocketed past both fiscal hawks and social moderates in the House with no changes on Thursday.

The $4 trillion One Big Beautiful Bill Act is now ready to reach across the U.S. economy, slicing into every aspect of the national effort to address climate change and environmental injustice.

The 887-page legislation largely erases the landmark investment in cleaner energy, jobs and communities that a Democratic-led Congress made only three years ago in the Inflation Reduction Act. 

It stomps out incentives for purchasing electric vehicles and efficient appliances. It phases out tax credits for wind and solar energy. It opens up federal land and water for oil and gas drilling and increases its profitability, while creating new federal support for coal. It ends the historic investment in poor and minority communities that bear a disproportionate pollution burden—money that the Trump administration was already refusing to spend. It wipes out any spending on greening the federal government.

President Joe Biden’s team left office expressing confidence that his climate legacy was secure because most of the $132 billion in private investment in clean energy manufacturing spurred by his programs was going to Republican districts and states.

But Republican members of Congress who spoke out in favor of clean energy—enough members to make a decisive voting bloc in both House and Senate—refused to hold up Trump’s larger agenda for the cause. The strategy of insisting on “one big” bill, coupled with political threats against would-be foes (two of whom announced in the past week they would not seek re-election), turned out to be a winning one for the president.

Amanda Levin, director of policy analysis at the Natural Resources Defense Council, called the bill “a massive hit to both our clean energy economy, the US economy as a whole, and to our future from a climate perspective.”

David Shadburn, the legislative director at the League of Conservation Voters, said the environmental movement aims to make sure the public understands what was in the legislation and that those who voted for it are held accountable.

“We know that in the fight for clean air and clean water and a healthy environment that we can’t afford to stop fighting,” Shadburn said. “So we’re going to keep doing that, and we know that the public is on our side.”

Here are a few of the ways the bill will make it harder for the world’s largest historic contributor of greenhouse gases to cut its emissions and protect communities from the worst impacts of a warming world.

Slashing Incentives for Clean Energy

The bill’s cuts to clean energy tax incentives are expected to save the Treasury $499 billion, according to the Joint Committee on Taxation’s scoring. Although it is one of the biggest offsets in the bill, it only pays for about 12 percent of the legislation’s $4 trillion in tax cuts.

But the economic impact could be profound. Trump has pledged to revive American manufacturing, but clean energy analysts expect it to have the opposite effect.

“Workers will suffer from factory closures and construction halts,” said a report this week from the think tank Energy Innovation. The analysis projected that job losses would reverberate for years, peaking at 900,000 by 2032, of which more than 230,000 would be manufacturing jobs.

The White House did not immediately respond to a request for comment on the report.

One of the cuts that will be most visible to consumers, and will happen most quickly, is the elimination of the $7,500 consumer tax credit for buying a new electric vehicle and the $4,000 tax credit for buying a used electric vehicle. The credits will be ending Sept. 30. 

This sets up a summer of brisk EV sales as buyers try to beat the deadline, followed by a dropoff in sales.

While many auto dealers will lament this change, they won’t miss the aspects of this policy that were frustrating. For example, the $7,500 credit is only available on the 29 models that meet requirements under the Inflation Reduction Act related to where they were assembled and the sourcing of battery components. The eligibility gets updated each year, and right now it’s not available on many models, including top sellers such as the Ford Mustang Mach-E and all EVs sold by BMW, Kia and Volkswagen.

The company that stands to lose the most is Tesla, which has 10 of the 29 models that are eligible and remains the country’s EV sales leader even after recent sales decline and loss of market share. Tesla CEO Elon Musk, who was part of the Trump administration before an attention-grabbing departure in May, had urged lawmakers to reject the bill.

Boosting Fossil Fuels

While the Biden administration had restricted oil and gas leasing in Alaska, the bill reinstates fossil fuel lease sales in the Arctic National Wildlife Refuge, with Alaska receiving a majority of the royalties from this new production. (This concession likely helped guarantee the vote of Alaska’s Sen. Lisa Murkowski, who was the last Republican holdout on the bill, in part over cuts to entitlement programs that would affect her vulnerable constituents.) 

The bill repeals the IRA’s historic increases on oil and gas royalty rates, lowering them to 12.5 percent from 16.6 percent; brings coal royalty rates from 12.5 percent to 7 percent—changes that make drilling and mining on federal land more profitable for companies and less so for taxpayers. The bill also establishes mandatory timber sales; rescinds federal funding to protect old-growth forests and boost forest resiliency; and implements minimum leasing mandates for minerals in public lands and waters.

“This historic legislation will help usher in a new era of energy dominance by unlocking opportunities for investment, opening lease sales and expanding access to oil and natural gas development,” American Petroleum Institute President Mike Sommers said in a statement. 

A last-minute addition to the bill would also provide millions of dollars of tax credits to U.S. companies producing metallurgical coal, often exported overseas for steelmaking. It also makes 4 million acres of known coal reserves available for leasing and authorizes mining on federal lands. 

Ending Help to Communities and Businesses

Trump’s bill cuts off all the funding that the Inflation Reduction Act was pouring into communities—especially the most vulnerable ones—to help increase energy efficiency and climate resiliency and hasten their transition to cleaner energy. 

An analysis by the REPEAT Project from the Princeton University ZERO Lab and Evolved Energy Research showed that the bill is expected to contribute an additional 470 million metric tons of greenhouse gas emissions per year by 2035, the annual equivalent of more than 100 million gas-powered cars on the road. Much of that impact would come from beyond the power sector.

The bill “moves to rescind unobligated funds that went to all these different types of grants to monitor pollution, … improve local air quality and reduce public health risks,” said Levin of NRDC. The affected programs represented “direct funding to nonprofits, to schools, to other local governments to support investments that the community itself wants to lead on,” she said.

A slew of initiatives—ranging from efforts to address air pollution at schools, to cutting heavy vehicle diesel emissions—were rescinded.

“Across the board, Republicans are using this bill to repeal clean air and environmental protections, rescind funding from environmental protections—all to justify and pay for tax cuts for billionaires,” said Shadburn, of the League of Conservation Voters.

The bill also rescinds the Inflation Reduction Act’s Environmental and Climate Justice Program, which provided grants for community-based initiatives in disadvantaged communities. 

Already Trump’s Environmental Protection Agency had terminated funding for grants awarded under the program, for initiatives aimed at disaster preparedness, workforce development, air quality, flood control and high energy costs. The projects involved things like installing pollution notification systems and replacing lead pipes and were designed to strengthen communities against more damaging weather events while including community members in decision-making that affected their environment and health. Environmental groups had filed a class-action lawsuit to try to reinstate the canceled grants.

Now the bill rescinds all unobligated funding for the program for things like technical assistance and staff budgets aimed at supporting the successful implementation of the grants, said Zealan Hoover, former director of implementation at the EPA who oversaw the program under the Biden administration.

“This is another step by the Republican Party to try to undermine local communities’ ability to reduce pollution in their air and their water and solve problems,” he said. “The EPA has already been trying to terminate the grants, and now Congress is clawing back the money that would be used to pay the staff managing and implementing those grants and helping them be successful.”

Cutting Support for Public Lands

One of the few wins for the environment in the megabill was the stripping of an attempt to sell off millions of acres of public lands across 11 Western states. But the bill still carries an array of provisions opening up public lands to developers and the cutting of funding to agencies like the National Park Service. 

“This is a full-scale assault on the air we breathe, the water we drink and the wild places we cherish,” said Stephanie Kurose, deputy director of government affairs at the Center for Biological Diversity, in a statement. “Republicans just opened the floodgates to turning some of our nation’s most beloved landscapes into sacrifice zones for polluter profits, while ensuring that the voices of impacted communities are silenced.”

The proposed cuts will also be seen by most Americans, with $267 million in funding to the National Park Service for staffing rescinded. 

“At a time when our national parks are facing record visitation and historic staffing shortages, lawmakers are making a choice to cut funding,” Daniel Hart, director of clean energy and climate policy for the National Parks Conservation Association, said in a statement. “Their continued failure to champion national parks puts irreplaceable landscapes, historic treasures and visitor safety at risk.”

A Win for Biofuels and Big Commodities

While the bill slashes incentives and tax credits for clean energy, it accommodates the farm lobby’s push to extend tax credits for crop-based aviation fuels, which have been touted as a cleaner alternative to fossil fuels but critics say is anything but.

The credit, known as the 45Z tax credit and established by the Inflation Reduction Act, gives producers and sellers of crop-based aviation fuels between 35 cents and $1.75 per gallon for sustainable aviation fuel.

But the new bill gets rid of the existing requirement to calculate indirect emissions—those generated when agricultural land is expanded to grow corn or soy—when determining what qualifies for the credit. That, critics say, makes the fuel less “sustainable,” an attribute that some researchers question to begin with.

The bill’s passage comes as Congress has all but stalled out on negotiations over the Farm Bill, the massive legislation that covers food and farm policy, including food assistance for the poor and subsidies for farmers. In effect, the new measure contains a Farm Bill of sorts.

One of the big hits, critics say, will be to the poor. The bill is projected to slash food assistance for low-income people by nearly $186 billion over 10 years by tightening work requirements for the Supplemental Nutrition Assistance Program. This will likely have ripple effects across farming communities.

“It’s unconscionable to cut funding for people in need to pay for tax cuts to the wealthy,” said Stephanie Feldstein, a director with the Center for Biological Diversity. “It will wind up harming rural communities, retailers and farmers themselves.”

The economic impacts will likely mean farmers who are trying to employ conservation and climate-friendly farming practices will have to cut back or stop altogether.

At the same time, the bill boosts farm subsidies for the country’s big commodity growers, especially corn and soybean farmers. The bill would increase crop price guarantees by as much as 20 percent, which would mostly benefit bigger, wealthier farms.

The American Farm Bureau Federation applauded the legislation when it passed the Senate. “Farmers and ranchers are the foundation of America’s food supply chain, and they need the certainty that this legislation will provide,” said its president, Zippy Divall, in a statement. “Improvements to farm safety net programs that reflect today’s agricultural economy and maintaining important tax provisions will directly benefit farm and ranch families.”

The Congressional Budget Office projects that the bill will increase mandatory spending on farm subsidies by more than $50 billion, the second largest source of new government spending after immigration enforcement. Most of that will flow to those who grow corn and soybeans, which largely end up in gas tanks as biofuels or as feed for confined livestock. 

“It’s just pouring more money into the most destructive parts of our industrial food system,” Feldstein said.