The Inflation Reduction Act—for the first time ever—couples high-road labor standards with clean energy deployment tax credits. By requiring that clean energy investments support a prevailing wage and workforce development pathways in order to receive the full value of the tax credit, these provisions will:
- Grow and diversify the middle class;
- Increase diversity in the construction workforce;
- Ensure the construction workforce has the skills necessary to build and maintain infrastructure; and
- Promote hiring of local residents to work on infrastructure projects in their communities.
Furthermore, the newly established Low Income Communities and Energy Communities Credits will help address racial and economic inequality by incentivizing locating projects in communities that have a significant share of the population below the poverty line and communities that have seen significant job loss in the fossil fuel economy. These credits will help ensure that the benefits of the clean energy investments spurred by the tax credits are concentrated in these communities that need them most. Properly targeting these credits will be important to address the historic geographic disparity of clean energy investment and ensure that communities that have primarily experienced economic pain in the transition to clean energy now share fully in the economic gain of that transition.
These provisions represent a game-changing investment. By getting the details right, the U.S. can meet its clean energy deployment and climate goals while creating good union jobs, growing domestic manufacturing, delivering public health and environmental benefits, and creating a cleaner, stronger, and more equitable economy for all.
See the comments.