Global heating caused by burning fossil fuels presents an existential threat to the world as we know it, and avoiding the worst effects means transitioning to a low-carbon clean energy economy. For the low carbon transition to occur, many workers must be retrained or upskilled to work in clean energy. Efforts are being made by the White House to entice workers to the clean energy sector using provisions from the Inflation Reduction Act. Business Insider covers the new tax incentive stating:
“The Treasury Department, alongside the Internal Revenue Service, announced a final rule on Tuesday that stipulates how clean energy projects can get their tax break from the Inflation Reduction Act multiplied by five by paying workers more… To qualify, projects have to hire registered apprentices, who are paid for their work and earn credentials while doing it, and pay the prevailing wage to their workers, a level of minimum pay generally set for workers on government contracts. While prevailing wage has “long applied” to federal projects, according to Treasury Secretary Janet Yellen, this is the first time it’s been applied to clean energy tax incentives.“
Government incentives for steering the economy to clean energy are vital to ensuring there are enough resources, workforce, and public will to transition the economy. The Inflation Reduction Act and its clean energy tax credits have provided the most incentives of this type of any American legislation to date. Long lead times on clean energy projects mean that we may not see the full effects of this legislation for years to come, but measures like these – which the EU is also debating – are sure to have impact on the energy economy.
Our members can learn more about the Inflation Reduction Act here.
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