Importance of policy in confronting climate change

 Many low-lying areas are under the threat of sea level rise, which could make them uninhabitable by 2100. According to the Intergovernmental Panel on Climate Change, the world will continue to experience severe climate-related disasters unless global warming is reduced below 2 degrees Celsius, preferably to 1.5 degree Celsius. We can confront climate-related disasters and live safely through climate enactment. Presently, the United States has taken the lead by implementing the Inflation Reduction Act, one of the three climate-relevant laws passed in the last 12 months to protect the people.

IRA was passed in the legislature in August; the Act makes a financial commitment to lessen the cost of transitioning into clean energy as well as providing an enabling environment for green jobs. About $370bn has been budgeted to fight climate change, some of it in the form of tax credits and rebates to help consumers save thousands of dollars on energy-efficient appliances, plug-in vehicles, and renewable electricity for their homes, Coral Davenport reported in the New York Times.

Experts say the IRA is the largest bill to be passed that addresses climate change, focusing on infusing clean energy into the economic-social system of the country. The bill targets reducing carbon emissions by 42 per cent as projections place the country to achieve its net-zero targets. It would also invest $391bn into climate change and energy security, a pathway to make the US energy independent.

Some investment areas in the IRA are $128bn for renewable energy, $30bn for nuclear power, $13bn for electric vehicle incentives, $36bn for home energy, $37bn for advanced manufacturing, $32bn for rural economies, and $3bn tax incentives for installing carbon capture. It also makes allocation for disadvantaged communities, forestland, farmers, environmental justice, climate-smart agriculture, and decarbonisation.

Achieving and implementing a policy such as IRA requires sound fiscal measures. IRA is a fiscal policy that generates revenue through an increase in tax and proceeds from government initiatives. According to the report, spending for IRA is derived from a minimum tax of 15 per cent on large corporations and one per cent excise tax on stock buybacks. Other areas where the IRA spending is coming from include Internal Revenue Service tax enforcement funding; methane fee, Superfund fee, and savings from health care initiatives. With $500bn in IRA spending as estimated and $737bn in revenues expected over the next 10 years, the country will save $237bn.

Developed countries can emulate this policy by raising levies on fossil fuel proceeds and using the fund to reduce the cost of transitioning to clean energy and investment. Similarly, developing countries like Nigeria can utilise climate funds as an incentive to lower the cost organisations incur while switching to green operations.

According to Gates Notes, leaders can confront the climate crisis by providing enabling environment for private sector investment in clean energy start-ups and prioritising public investments in green technology research and development.

IRA provides a climate-resilience framework which could help countries to curtail the disastrous impact and risk of losing lives, property, and settlements to hazardous effects. According to National Centers for Environmental Information report, the US has lost more than $1bn to 15 weather/climate disaster events from January 1, 2022 to October 11, 2022. In Lagos, Nigeria, we experience flooding often as the Lagos Wall, a sea defence to protect Lagos Atlantic City and Victoria Island, alone could not stop the perennial flooding.

The signing of the IRA highlighted how finances would be generated through tax incentives and tax credit relief. On the other hand, provisions are made for vulnerable and disadvantaged communities suffering the effect of emissions. Also, residential energy cost is reduced to adopt and improve home energy efficiency. It also captures improvements in electricity, heating, ventilation, air conditioning, transportation, aviation, and industrialisation.

For a climate resilience framework, countries must prioritise sustainable policies to mitigate the effect of climate change. In making these policies, climate adaptation mechanisms and preventive actions must be key regarding provisions that can be implemented to help communities.

The signing of the IRA will address the climate change effect by opening up the US to opportunities in energy transition. This is somewhat of a template for developing countries like Nigeria.  Emulating the IRA will accelerate other countries’ efforts and aid the world’s commitments to confront the climate crisis.

Importance of policy in confronting climate change (punchng.com)