Rejecting False Solutions: The Inflation Reduction Act and the Fight for a Just Energy Transition
By Savannah Collins and Mia Montoya Hammersley
In 2024, scientists confirmed that, for the first time, the world had crossed the threshold of 1.5 degrees Celsius of warming for a full twelve months, placing us on a pathway to deadlier and more intense climate change impacts. While the transition to renewable energy is more urgent than ever, it is crucial to recognize corporate greenwashing and push back against false solutions in order to ensure that the disproportionate harms perpetuated by the fossil fuel economy do not continue. In the United States, the Inflation Reduction Act (IRA) has included unprecedented funding and support for projects marketed as renewable energy development. However, certain purported solutions have been met with resistance by frontline communities and experts alike.
The Just Transition is the idea that a healthy economy and clean environment can—and should—co-exist. Furthermore, this transition “should not cost workers or community residents their health, environment, jobs, or economic assets.” In the past ten years, especially, the United States has recognized the need to transition the U.S. economy away from being reliant on fossil fuels and into renewable energy. While this is an exciting time of movement toward a healthier world, the old pathways of injustice under the fossil fuel economy are finding new life in the renewable energy transition. Several examples of the perpetuation of these old pathways and examples of greenwashing are discussed in this article.
Carbon Capture
The Inflation Reduction Act (IRA) was passed in 2022 and is touted as the largest investment in combatting climate change in United States history. The IRA created an extensive tax credit program as one of the many provisions meant to aid in the battle against the climate crisis. However, these tax credits also benefit industries selling false solutions, without offering affected communities a seat at the table.
For example, among the false solutions funded by the IRA are tax credits for carbon capture and storage facilities. Carbon capture and storage “removes carbon dioxide from highly concentrated point sources like power plants.” In fact, “[t]oday’s largest carbon capture projects only remove a few seconds’ worth of our yearly greenhouse gas emissions.” Additionally, these carbon capture and storage facilities consume excessive amounts of energy by using fossil fuels to power the technology, largely defeating the purpose. This captured carbon dioxide is typically then used for fracking. Furthermore, transporting carbon dioxide can be extremely dangerous. For example, in 2020 in Satartia, Mississippi, a carbon dioxide pipeline ruptured, hospitalizing at least 45 people. While emergency services were called to the scene to provide aid for the poisoned, the leaked carbon dioxide caused engines to stop, slowing the emergency response.
One function of the IRA tax credit scheme is to allow taxpayers, typically industry, to sell back captured carbon dioxide using equipment that was in place before the enactment of the Bipartisan Budget Act of 2018. If these taxpayers do not use this captured carbon as an injectant for fracking, they are eligible to receive $20 per metric ton. If they do use the captured carbon for fracking, the compensation decreases to $10 per metric ton. If the capture equipment was installed after the Bipartisan Budget Act of 2018, then the price the carbon sells for is $17 per metric ton. For direct air capture facilities in service after 2022, the amount increases from $17 to $36 per metric ton. Carbon pricing schemes like this one continue to fund and incentivize fossil fuel uses such as fracking, creating a false sense of progress without addressing the root causes of climate change.
Disproportionate Impacts to Tribal Lands
Indigenous Peoples have long been on the frontlines of fossil fuel development; however, today, more than 75% of the lithium, copper, and nickel reserves and resources in the U.S., categorized as “critical minerals” that are necessary for the renewable energy transition, are within 35 miles of Tribes’ reservation lands. This is bringing new conflicts and extractive industries to Tribes’ doorsteps. Following an extremely expedited process under the first Trump Administration, Lithium Nevada Corporation began construction on the Thacker Pass Lithium Mine in 2023 after repeated attempts by Indigenous Tribes and environmental organizations to stop the mine. However, because the site is considered to be integral to creating a domestic supply of lithium batteries for electric vehicles, corporate and governmental interests have combined to continue extraction on Tribal lands in the name of domestic progress during the Biden Administration.
Nuclear reactors, often touted as an important energy source in the clean energy transition, also disproportionately impact Tribal lands. For example, in response to the nuclear arms race of the Cold War, from 1944 to 1986, 30 million tons of uranium were mined from Navajo land based on leases with the Navajo Nation. Uranium mining has led to uranium levels “at least five times greater than safe drinking water standards” allow. The people of the Navajo Nation have faced three generations of health issues due to these improperly handled mines. Potential health effects from uranium contamination include lung cancer, bone cancer, and impaired kidney function from drinking contaminated water.
Given these continued impacts to Tribal lands and communities, adequate Tribal consultation is crucial to a Just Transition. Tribes are not a monolith in their support or opposition to green energy projects, and each Tribe will have unique needs and considerations. A Just Transition for Tribal Nations inherently values self-determination, which includes the right to support resources extraction efforts occurring within their ancestral lands, but not being exploited in the process.
For example, some Tribes who have in-demand resources on the reservation or ancestral lands may want to build their economic base to better support their people. Navajo Nation, for example, has historically utilized the mines on their lands to generate revenue for the Tribe. These funds support programs, departments, and services for the Tribe. However, with the global transition away from the coal industry, the Navajo Nation has focused on being part of the clean energy transition. Current Navajo President Buu Nygren has made “ownership or equity in projects developed on the nation” one of his main priorities.
Benefit Sharing
Fundamental to the Just Transition is “redressing past harms and creating new relationships of power for the future.” Rooted in a history of labor rights movements, the people of Appalachia are also stakeholders for a Just Transition. Appalachia and the Appalachian people have been exploited—for their natural resources and labor—for generations. The major industries in the area, such as fracking and coal mining, are extremely dangerous and have historically benefited people and companies from outside of the region. The Inflation Reduction Act gives credits for taxes levied against them to industries engaging in renewable electricity production in “energy community” sites. An “energy community” includes areas found across Appalachia where 25% or greater of the local tax revenues are related to the extraction, processing, transport, or storage of coal. Additionally, companies can receive tax credits for renewable electricity produced on the site of former coal mines or coal-fired electric generators. Industry can clearly benefit from the IRA tax credits, but there is no language explaining how fence-line communities themselves will benefit.
Rather than mandating community input and benefits sharing, the IRA provides tax breaks and tax credits to encourage the creation of green energy projects, without recognizing the impacts we will see like those in Satartia, Mississippi. A Just Transition requires coalition work between environmentalist, environmental justice organizations, and labor groups. Focusing solely on global climate change without prioritization of its effect on local communities will likely lead to the same harms those communities have faced under the fossil fuel economy.
Author Bios
Savannah Collins is a third-year law and Master of Climate and Environmental Policy student. She is also the Environmental Justice Managing Editor for the Vermont Journal of Environmental Law. During her time at Vermont Law and Graduate School, she has had the privilege to work with frontline and fence-line communities, as well as Tribal nations in their pursuit of climate and environmental justice. She looks forward to working in the legal field to recognize where we have made mistakes and help to shape a fairer and more just world in the face of the climate crisis.
Mia Montoya Hammersley is the Director of the Environmental Justice Clinic and an Assistant Professor of Law. She is a member of the Piro-Manso-Tiwa Indian Tribe, Pueblo of San Juan de Guadalupe, and a Yoeme (Yaqui) descendant. In her work, Mia has represented conservation organizations in protecting land from extractive industries, Tribes in defending and asserting their land and water rights, and communities experiencing disproportionate environmental health harms. Her chapter, “The Water-Energy Nexus and Environmental Justice: the Missing Link Between Water Rights and Energy Production on Tribal Lands” was published in the UA Press Series, Indigenous Environmental Justice, in 2020. In 2021, she was a recipient of the Young, Gifted, and Green 40 Under 40 Award by Black Millennials for Flint for her work in the field of environmental justice.