Late on July 27, Sen. Joe Manchin and Senate Majority Leader Charles Schumer announced an agreement on the Inflation Reduction Act (IRA): a reconciliation package that implements prescription drug pricing reform, invests in Affordable Care Act health care subsidies, imposes a corporate minimum tax and improves tax enforcement, and—most relevant for this post—provides $369 billion to support energy production and reduce greenhouse gas emissions.

This package presents the opportunity for Congress to finish legislating President Biden’s Build Back Better agenda, completing the story detailed in our series The ABCs of the AJP.  As we left the saga last summer, we noted that the effort to enact that agenda was Not Broken, Simply Unfinished.  Today we are updating that series to detail the following energy related elements of the IRA:

• Accelerating efforts to decarbonize the economy and address climate change
• Ten year stability for expanded clean energy tax credits
• New funding for a National Green Bank through a Greenhouse Gas Reduction Fund
• The Creation of a Methane Emissions Reduction Program
• Strong support for the electric vehicle sector and domestic supply chain
• Empowerment of environmental justice

As President Biden noted yesterday, “Sometimes seem like nothing gets done in Washington . . . But the work of the government can be slow and frustrating and sometimes even infuriating.  Then the hard work of hours and days and months from people who refuse to give up pays off.  History is made.  Lives are changed.”  As of this writing, these sentiments may still be premature; one key Democrat—Senator Krysten Sinema from Arizona—has yet to signal her support for the IRA.  Her endorsement will be necessary in an evenly divided Congress on what is expected to be a highly partisan vote. 

Regardless, the coming days will prove decisive for the future of U.S. energy and climate policy and we will continue to update and supplement our coverage as the bill moves through the final stages of the legislative process.

全球各国政府都在努力做出关于绿色能源政策的艰难决定:是保持绿色倡议，还是消除对经济增长的压力?在全球范围内寻找不同政府如何作出反应的例子是很有趣的。

最近几个月，英国选择"调整" 其环保税，预计每年平均为家庭节省50英镑。这一直是一个高度政治化的问题，国内天然气和电力成本成为英国生活成本上升的主要因素。特别是，政府表示将调整能源公司义务计划(ECO)，给大型能源供应商额外两年的时间来达到目标，并将计划的一些目标放宽33%，这取决于能源部的咨询结果。气候变化(DECC)。

那么，提议的改变是什么?首先，回顾经合组织最初的目标和目的是有帮助的。从2013年1月1日起，《环保条例》责成燃气和电力供应商通过达到三个目标来提高住宅客户建筑物的能源效率:

• 碳减排义务(CERO) -目标是节省2090万吨终身二氧化碳。供应商必须专注于难以处理的房屋，例如固体墙隔热和难以处理的腔墙隔热(第12条，英国2012年生态令);
• 社区碳减排义务(CSCO) -目标是减少680万吨的二氧化碳排放。 Suppliers must focus on the provision of insulation measures and connections to district heating systems to domestic energy users that live within an area of low income (Article 13, UK ECO Order 2012); and
• Home heating cost reduction obligation (Affordable Warmth (AW)) – targeted saving of £4.2 billion of costs. Suppliers must provide measures to help low income and vulnerable households afford heat, e.g. by replacing or repairing a qualifying boiler (Article 15, UK ECO Order 2012).

In early 2014, the ECO consultation will propose the following diluted scheme, to try to reduce the burden on fuel costs:

• Reducing the CERO target by 33%. The CSCO and AW targets for 2015 will remain the same.
• Extending the ECO beyond 2015 to March 2017. The CERO, CSCO and AW targets will be set at 2015 levels giving energy suppliers more time in which to reach their targets.
• Extending the CSCO element of ECO from the 15% to the 25% lowest income areas and simplifying the qualifying criteria.

This leaves a question about those suppliers who have already invested hard in hitting their targets, just to have these reduced, impacting on their relative competitiveness versus other suppliers.

The proposals will attempt to protect suppliers that have met their targets in three ways: (i) suppliers can carry forward any over-delivery against 2015 targets to count towards their 2017 targets; (ii) suppliers can carry forward their over-performance under the predecessor schemes CERT and CESP; and (iii) suppliers that have delivered substantial early progress against their current CERO target will also benefit from an uplift in scores for the measures delivered (plus, energy suppliers that fall short of their new 2015 targets will have their 2017 targets increased by the same multiple).

Normally, the UK’s big six energy companies are very astute to spot any regulatory change that impacts on them more onerously than on their close competitors. It remains to be seen how each will react to the finalised proposals, and the answer will largely depend on the outcome of the consultation.

The Energy Act 2011 is available at this link.