How the Historic Climate Bill Also Boosts Healthy Buildings, Equity and Resilience

Over the weekend in a marathon session, the Senate passed really ‘big deal’ legislation, the Inflation Reduction Act of 2022, which includes a huge $369 billion investment to combat climate change. The bill is expected to pass the House later this week and then will be sent to President Biden for signature.

Widely lauded by climate advocates and heralded rightly as historic climate legislation, the bill aims to set the country on the path to reduce greenhouse gas emissions by 40 percent by 2030. While we know the bill has the power to rewrite America’s climate future, it also creates massive new opportunities for healthy buildings, equity and resilience.

The bill significantly boosts and extends three longstanding energy-efficiency incentives for buildings — one for commercial buildings, another for whole-home efficiency and a third one for home efficiency improvements. Each one, if smartly deployed, could couple energy efficiency with contiguous strategies to improve indoor environmental quality, supporting climate goals and health goals simultaneously. Many leading service providers in the building efficiency space are already deploying products that help reduce building energy consumption while also improving environmental air quality. Here’s more on those three building incentives:

Tax Credit for Energy Efficiency Home Improvements (25C)

• The credit is extended through 2032 and increased from 10% to 30%. It also replaces a lifetime cap on credits with a $1,200 annual credit limit, including $600 for windows and $500 for doors and $2,000 for heat pumps.
• In conjunction with the credit, state energy offices will receive $9 billion for programs supporting homeowners with energy-saving retrofits, part of which is available only to recipients who fall below 150% of the area median income.

Tax Credit for New Home Efficiency (45L)

• The credit is extended through 2032 and provides a new energy-efficient home credit of $2,500 for homes that are certified as ENERGY STAR, $5,000 for homes that are labeled as DOE Net Zero Ready, and up to $2,000 per unit in residential buildings of three or fewer stories.

Tax Deduction for Commercial Building Energy Efficiency (179D)

• The deduction increases from $1.80 per square foot to between $2.50 and $5 per square foot depending on the level of energy performance. The maximum deduction of $5 per square foot would require 50% better performance than ASHRAE 90.1.

Notably, the legislation makes significant strides to also help support community resilience and health, providing critical investments to cities, states and many of our most critical sectors to help strengthen and fortify against the impacts of climate change. Some of these provisions include:

$3 billion in Environmental and Climate Justice Block Grants

• Funding would address disproportionate environmental and public health harms related to pollution and climate change.

$1 billion to support more sustainable and healthier affordable housing

• Funding would support a HUD-led grant program to improve energy and water efficiency as well as other eligible uses including indoor air quality, building electrification, energy storage, zero-emission electricity generation and climate resilience.

$1.3 billion for farmers and rural areas for clean energy and energy efficiency

• Supports renewable energy production as well as energy efficiency upgrades.

$2.6 billion to help coastal communities

• Supports efforts to better prepare for extreme storms and other increasingly intense weather events.

$1.5 billion for urban tree planting

• Supports climate resilience through funding in urban forestry with a priority for projects that benefit underserved populations and areas.

$3 billion Neighborhood Access and Equity Grant program

• Supports a Federal Highway Administration (FHWA) program aimed at improving walkability and safety, reducing environmental impacts and supporting planning and capacity-building activities in disadvantaged communities.

$7 billion competitive grant program for low-income and disadvantaged communities

• Provides financial assistance for disadvantaged communities to deploy or benefit from zero-emission technologies.

$1 billion to incentivize states and localities to strengthen energy codes

• Supports states and localities that meet or exceed the 2021 International Energy Conservation Code and the 2019 ASHRAE 90.1 standard.

$225 million for the General Services Administration (GSA) Federal Buildings Fund

• Supports GSA’s continued work to advance healthier, high-performance buildings.

Climate Change + Health
This extraordinary climate bill reflects an historic opportunity for the planet and for our health. Indeed, as we have said many times before, human health and planetary health are inextricably linked. Climate change is a defining public health threat, one that already impacts all facets of our lives from more extreme weather, wildfires and disasters to rising sea levels, increased air pollution and the likelihood of more disease. In fact, a study this year published in Nature found that over half of the known human pathogenic diseases can be aggravated by climate change.

It’s why we have been unequivocal about winning this fight. At a time when we need it most, President Biden and Congress have stepped up and are now poised to bring forth legislation that will address our planet’s greatest challenge and make a world of difference for human health. We commend them for their leadership.