On Oct. 20 we hosted our first event as part of our new Climate Justice Series looking at solutions to the climate crisis and its impacts on communities around the world. In this event, we heard from a panel of experts who drilled down (no pun intended) the Inflation Reduction Act (IRA) and what its implementation will mean for the global climate justice movement. They examined both the good and bad, and what it will take to make the most out of the opportunities presented in it for our collective future. During the event, OBI Director john a. powell cautioned critics not to let the "perfect" be the enemy of the "good."
Transcript
Eli Moore:
Welcome everyone. Thank you so much for joining us. We're excited today to have you in this virtual space and just grateful to be in this conversation and co-create some analysis and some strategy around the Inflation Reduction Act and what it means for community benefits and the global climate justice movement. This is part of broader work at the Othering and Belonging Institute that we're involved in, including various partnerships with local partners, community based networks, analysis of global trends and policy development, radical imagination. But today we're really focusing in on the Inflation Reduction Act, what it means, what's in it, what are the opportunities and threats, and what are some of the strategies that could make its impact as equitable and transformative as possible.
My name's Eli Moore. He, him. I'm the director of Community Power and Policy Partnerships Program at the Othering and Belonging Institute. I'll be the moderator today and I wanted to just take a couple minutes in the beginning to give a little bit of a place to this work, because Zoom can feel spaceless, placeless. We're seeing each other through these rectangular screens. But we know that climate justice requires us to have deeper understanding and connection to the places we inhabit. I just wanted to take a couple minutes to give some context where I'm at, where the institute is at, and feel free to add your own reflections on your place and where you're rooted.
I'm joining from Richmond, California, Institute is in Berkeley. We are on the unceded land of the Lisjan, Ohlone people. We are in the Wildcat Creek Watershed. Our drinking water here comes from the Mokelumne watershed, which is 200 miles east in the Sierra Nevada land of the Mokelumne people. Our food shed is transnational, but we have local food systems being built out. Urban Farms & Gardens stewarded by Urban Tilth and others. In our region still 60% of people get to work driving in a car alone. This is the driest year on record in California in the last 128 years. Over the last five years, we've had over two million acres burned by wildfires each year in California. And turning a little bit to our regional economy, four out of 10 workers in our region don't make enough to meet their basic needs. 4% of white households and 17% of people of color don't have food security.
The ports, refineries and other hubs of the fossil fuel economy here are sources of long standing environmental injustice. For instance, the Chevron Refinery in Richmond causes five to 11 premature deaths each year according to health scientists, and that's suffered mostly by the majority black and Latinx neighborhoods around the refinery on the fence line. But we're also, this place is also home to visionary environmental justice organizations and leaders like Urban Tilth, Communities for a Better Environment, Asian Pacific Environmental Network and others, and their plans and their leadership are really a starting point for investment and solutions that center the people closest to the pain. So in a context like this, in a context like yours, what does the Inflation Reduction Act mean? How do we prevent the harm? How do we leverage the opportunities and the resources? And how can we, the big we put the resources and opportunities to greatest use?
That's a little bit of framing and context on what we're here to talk about, and we just encourage you to use the chat and the information offered and the relationships and connections actively and make the most of this moment. We are going to have a few speakers and then have some time for conversation and have some time for questions and response and discussion with the speakers. We have a really exciting set of folks here to speak and share their experience and their insights, who have been looking at the IRA, who have been thinking about how it connects and what's in it and how it can be used. I'm just going to check on one thing about the agenda real quick and then we'll move on. Johanna, can we begin with you?
Johanna Bozuwa:
Yeah, of course. I'd be happy to start.
Eli Moore:
Great. Okay. Can I give you a little introduction?
Johanna Bozuwa:
Absolutely.
Eli Moore:
Johanna is the executive director of The Climate and Community Project. She directs a network of researchers and experts focused on justice based climate policy and focuses research on extraction of fossil fuels, energy, justice and democracy and the political economy of transitions. She's the co-author of a report about the Inflation Reduction Act, called the The Good, The Bad and The Ugly, that we really recommend and are excited to have her break down some of the context for the Act. Thank you Johanna.
Johanna Bozuwa:
Thank you so much for having me here Eli, and for inviting me to this space with so many incredible folks on the call. If we could pop to the next slide, I guess the beginning of mine, I think it might be a few through. Amazing. I am just going to take my time to really talk about how we came from the Green New Deal and got to where we are today with the Inflation Reduction Act. So we can go to the next slide. To just create some context for us, the Green New Deal came into being with force when folks and young people went to Pelosi's office and sat in there. And what it did was created this re-engagement and excitement around climate policy and specifically moved away from a conception of climate politics as austerity and took us into something that was big, expansive, it connected industrial policy, climate policy and justice and said that these things aren't connected and we can build something.
It was climate policy. My colleague Daniel Aldana Cohen says climate policy you can touch. This also coincided with the 1.5 degree IPCC report that was a collection of researchers, best of their class, who really outlined what was at stake and what would happen if we went over that 1.5 degree warming, that really catalyzed even more action on around the climate crisis. Next slide. As we have the Green New Deal, it's building, there's power, we're seeing global Green New Deals come up, we're seeing that across the world but also in people's local communities. People are fighting for this. Bills specific, like the Green New Deal for public housing come out and were starting to articulate what this means. But then COVID happens, right? We have the COVID crisis that hits and what we are shown in such explicit terms is like the demonstrable inequality and the crisis at hand within the United States.
And so we also were confronted with the fact that the government can do big things, we can do big investment and that's what they were doing during COVID-19, maybe not perfectly, but we saw the opportunity, and folks within Green New Deal Spaces and Green New Deal Coalition said, okay, we need a targeted approach. We need to build both Build Back from the COVID crisis but also integrate that with a climate perspective. How do we do that? And so they created the THRIVE Agenda. The THRIVE Agenda focused on how do we do these two things at once? Then we have Biden come into office, the economy is in shambles still, we're trying to get ourselves back on track. And so there's this big negotiation for Build Back Better. And what you see in the development of this legislation is glimpses of the Green New Deal embedded in there.
We see billions of dollars parsed out specifically for retrofitting public housing. We see in very explicit electricity decarbonization plan that's outlined explicitly. We see care work being integrated in medical justice in this big Build Back Better package. But in the congressional machinations we see that there's this distinction between two bills, the Bipartisan Infrastructure framework and Build Back Better. And ultimately these two things are split apart and build Build Back Better does not get past, it languishes there and people are exhausted. We have been fighting through the COVID crisis, we've been fighting through more and more disasters and climate extremes. In the final hours of this Congress, we're seeing the last final push and actually congressional staff members and like climate staffers sit in on Senator Schumer's office to say, we need climate, we need a deal.
Schumer works with Senator Manchin and in those last minutes gets the Inflation Reduction Act out. The Inflation Reduction Act is not Build Back Better, it is smaller, it is green industrial policy light and it comes with some real sacrifices. In fact, Inflation Reduction Act has created real divisions in fact in the environmental and climate world and larger green groups and environmental justice communities where environmental justice communities thought, hey, y'all you didn't stand up for us in this moment. And because a lot of the environmental justice components got stripped out of the bill. So if we go to the next page. What did we actually gain? The IRA is the biggest piece of climate legislation the United States has ever passed. That is completely true. We got really important subsidies for renewable energy and those subsidies are now accessible to non-profits and to government institutions like it wasn't before. We have massive investment in electric vehicles and domestic manufacturing.
Really importantly we're tying high labor standards to those subsidies so that companies and governments have to actually make the green jobs good jobs. And then we're also seeing climate financing mechanisms like what's called the Greenhouse Gas Reduction Fund, stood up to support state and local capacity and even has some amount of very specific carve outs for environmental justice communities. That's huge. That's really big stuff. Next slide. But it is a far cry from the scale of public investment and climate action that we need. It really focuses on carrots, how do we incentivize, but has very few sticks to say we need this, especially on the timeline that we're dealing with to stay under 1.5 degrees. It's also Biden made big commitments to this conception of Justice40, that 40% of the benefit of investment made in climate will go to environmental justice communities.
If you look at the bill, really only about 16% is earmarked specifically for environmental justice communities. So that's not 40%. We also have a reinforcement of an all of the above energy strategy and it does not manage discreetly the decline of fossil fuels. Instead it includes a quid pro quo that says, in order to get offshore leases for wind, you need to have offshore leases for oil and gas. And that is where the environmental justice community felt the pain, feeling as still as if they were a sacrifice stone. And it also did little to support things like mass transit or generally tenants. Some of the people who are feeling low income households and people of color are more likely to be riding mass transit and more likely to be tenants. And they are not filled or they are not supported as much as they could be in the Inflation Reduction Act.
Moving to the next slide. But where can we still influence the Inflation Reduction Act? This is ongoing. There are opportunities for us to mold the funding landscape of IRA. Currently we're going through this process in which the departments who are administering the funding are trying to set up all the rules to make this funding go out the door. So there are requests for information periods which organizations are trying to submit comments to to see if they can really make this the best type of funding. We also have states and cities and municipalities that can leverage and direct some of the forms of federal funding to the best use scenario in their communities. And there are also real opportunities to work with labor organizations, to work with community groups to build really powerful community benefits agreements. I have got a feeling that the folks who speak after me are going to have even more detail on what this could look like. Next slide.
How does this influence the global climate action? We have COP 27, the UN climate change talks coming up right in the next month in Egypt. And Biden is going to have the Inflation Reduction Act in his pocket. And that's a really big thing. It's a big commitment from the United States, but actually we need around 40% reduction of global climate emissions. Based off of the country's contributions right now we are only on track for about 7% reductions by 2040. And the Inflation Reduction Act is not going as far as we need it to go. It also, the Inflation Reduction Act doesn't handle our massive fossil fuel export problem. In the United States we are the biggest exporter of oil and gas in the world. One of the biggest, and the Inflation Reduction Act has a very domestic look at fossil fuels and decarbonization not thinking about those flows out.
The last piece is that a lot of the bill actually focuses on onshoring the green economy. It's about bringing manufacturing, bringing even extraction of lithium onto the shores of the United States in the name of energy security as we've been handling the geopolitics of the war in Ukraine and the subsequent energy crisis associated. Even though there are a lot of really positive things about onshoring, we have to think about the global implications and what it means for our relationships with other actors and especially the folks and countries that did the least to create and cause the climate crisis. How is the United States responding with international solidarity? Next slide. There is still a global Green New Deal to win. The IRA does show us that we can win investment forward climate policy, that there is stuff that we can do. We can make climate policy that you can touch. We're going to see more electric vehicles, we're going to see retrofits.
But it also exposes fractures in the movement, right? We still see the fractioning that happened between environmental justice allies and some of the bigger green groups in that moment that the Inflation Reduction Act came out. And it also showed us where we still need to build power, who we need to unseat in order to build the political momentum that's necessary for climate jobs and justice both in the United States and in building a global Green New Deal more internationally. I know that the other folks that are on this panel are going to speak incredibly eloquently to the brass tacks of how we get this work done and excited to do that alongside them. Thank you Eli.
Eli Moore:
Thank you so much Johanna for breaking down some of the moment history and the policy history that led up to this moment and just the really grounded analysis around the fissures and challenges and the work. We're going to turn now to Professor John Powell, the Director of the Othering and Belonging Institute, and get some broader context on the history of major federal spending bills and the role of government and the struggle for racial justice and belonging and its intersection with these types of bills. I think we can take down the slides for now. And if you don't know John Powell, he's like I said, the director of the Othering and Belonging Institute. He's a professor of law and ethnic studies, the founder of several different institutes and organizations and really a connector of dots like the world has rarely witnessed, and a wonderful person. I'll pass it over to you John.
john a. powell:
Thank you Eli. It's great to be part of this panel and we have to leave a little bit early, I'm teaching today, so I have to get ready for class and go teach. But I think this is really an important panel and I hope it actually spearheads a larger effort. Johanna has laid out some of the frustration in IRA and there's always frustration. And what I want to do is a couple of things, suggest that despite the frustration and others will talk about this as well, there's incredible opportunities, but it doesn't happen automatically. It's not self executed. So as limited as this is, it's the biggest opportunity we've had in relationship to climate, but it's not self-executing. If we want to close some of those gaps, there's work to be done and opportunities to be had. But it takes organizing, it takes commenting on the regs for the rule making. It takes applying, it takes creativity, it takes organization. This is huge. This is the largest in US history.
So while we continue to improve on it, I want to remind us as they say, don't make the perfect enemy of the good. And some of you will say, well this is not good. Well it's big if it's not good. I would say it has a lot of good aspects to it. So in some ways that's not unusual. We go back to the government's history in terms of passing major legislation and Johanna's right. Is that part of the things that we have fallen into a stupor that the government can't do anything big. You go back to the Great Depression and there's this a slew of legislation starting in 1933 with the Emergency Banking Act and then several other things, many of which we take for granted now, came during that time period. The government was playing big, but even then when it was playing big, it wasn't playing perfect.
Many of that much of the work that came out of the Great Depression and Roosevelt actually left out communities of color or disproportionately included communities of color. So the housing also instituted redlining. They definitely had negative aspects and yet at the same time it transformed America. Coming up more recently, we come back to the recession of 2008 and the American Recovery and Reinvestment Act under President Obama, which was another huge piece of legislation, stepping in, trying to help Americans grapple with a great recession. We actually worked some with the White House at that time. One of the contradictory positions was this is going to actually help marginalize people and in order to take advantage of it you have to be shovel ready.
I was at the Kirwan Institute at the time and was saying that's a contradiction and a problem, because many marginalized communities, many communities of colors did not have a shovel. That shovel was not ready. And that wasn't just a slogan, it turns out to be a policy in terms of how money was pushed out. We created a report, which I think you can still get as well as we set up a thing of tracking where the money was going. And an interesting thing happened because I was called to the White House asked to take down our metrics because it looked like money was not going proportionally to the black community. I remember saying to the person I was speaking to, well if our data is wrong, tell me and I'll correct it. And he said, no, what you have this right, it's incomplete, but you're missing the point. I said, what is the point? We don't want those metrics up there, we want you to take it now.
And I said, I'll work with the president but I don't work for the president. And we didn't take it down. I was not invited back to the White House for many months after that. But my point is that even President Obama, and I know him personally, even before he was president, was trying to do the right thing. He had an incomplete effort. It has some negative impacts in terms of marginalized communities and at the same time it did some good things. I think it's important for us to be sensitive to how these efforts, even in their broad reach are uneven. But I also think we have to be very careful in that, not to therefore walk away from it, how to actually make it as impactful as possible. We have an opportunity to do that now. Actually just as a footnote, I got to text this morning from an organizing friend of mine and he complimented me on pushing for tax credits for people who hired out of marginalized communities.
This is Dan Toula Buster out of Illinois, and he said, we're close to actually putting that in place. And it was interesting because this conversation happened in 2010. He said, we're almost there. And my memory of the conversation, I don't know if D'Angelo is on the call or not, is that it wasn't you give tax credits to companies, you give tax credits to individuals, you make them portable. It sounds like that something's happened. And so that if there's a tax credit it will go to companies and not to individuals. I still think that's good. That's my point. I don't think it's as good as what I had in mind is giving it to individual workers. So what is the IRA supposed to do? Well, it's actually supposed to do many different things. We're talking about it largely at today in terms of the environment, but it also by its very name is the Inflation Reduction Act. It's supposed to reduce inflation.
Some people say it won't do that or it'll take too long, but that's part of the goal. It also has medical component dealing with prescription drugs, especially for seniors. So this package is huge. And of course the environmental piece And the environmental piece is also a jobs piece and it's an investment piece. It's a big deal, has many parts to it and it's very technical. I'm going to stop and just acknowledge the panel and also acknowledge my friend Joe Recchie. He's one of the first people called me up and said, there's so many opportunities in this bill, but they're not self-executing. We need to do something. And working with Eli and others, we've tried to figure out what collectively can we do, both to do what Johanna said in terms of getting closer to Build Back Better on one hand, but also taking advantage of the opportunities that's in this bill.
I'll end just by saying, there's an election coming up. So part of the reason that we got this bill instead of Build Back Better is because the country's essentially tied in terms of Republicans, Democrats, it was tied up in Congress, there wasn't a push. And if we don't participate, if we don't go out and vote, if we don't engage, and there's a lot of reasons why we might not that are understandable, legitimate, but it pushes us in a deeper hole. So despite all the difficulties, I think is critical that we be involved both with the bill but also our electoral process even though deeply flawed. Thank you. I'll turn it back it over to Eli.
Eli Moore:
Thank you John. Thank you for the broader context and the encouragement to not give up on government but also have a real assessment of the injustice is built into the system and the need to really be creative and persistent to build systems that are just. And thanks to everybody using the chat and sharing resources, we're going to share resources during the event and then we'll also be sending out a follow up email with several reports and guides that provide more detailed information. So if you do know of useful resources or reports and you share them in the chat, we'll add those to the collection that we send out after the event.
And so I'd like to introduce our next speaker and then after that we'll have some time for Q&A. John already mentioned Joe Recchie, he is the CEO of Praxia Partners, which is, I think of them as a mission driven developer. They incorporate venture investment, innovative finance and partnerships with community groups. He has been a collaborator with the institute on several projects and really always brings a lot of insight into how to actually structure development so that social equity is built into the project from square one. So Joe, I'll pass it to you. Thank you.
Joe Recchie:
Thank you very much Eli, for your generous introduction. I think of myself as more of a mechanic and so hopefully I'll be able to share some of that more granular insight in this. But it's a pleasure to join you today to discuss in particular equitable community benefits using the Inflation Reduction Act. The focus of my presentation is to try to make meaningful at a more granular level how the IRA provides tools that can be used within communities to address environmental justice, climate challenge, economic development, and mitigate wealth disparity. Next slide please. Thank you. I just have this as a placeholder if you want to get ahold of me, that's the website. Praxia Partners is a family of social enterprises.
They are somewhat integrated in that we work in the community development, economic development and renewable energy space and especially how that works with many partners around the country that are also engaged in some form of social enterprise. Next slide, Mark. The IRA's positive impact on solar deployment. I wanted to address of the many things that are involved in the IRA and I want to pick up on two of them in particular, the potential for distributed energy for solar energy utilized throughout the country and also the particular rebate for low and moderate income homeowners because it's an energy efficiency rebate that could be really powerful as an economic development tool. And also to address income and wealth disparity in communities.
The investment tax credit is used to reduce the total capital cost, the outlay for solar power. As most of you know or perhaps all of the capital cost for solar power installations has been reduced by 85%, almost 90% in the last 12 years. The investment tax credit was scheduled to be reduced the 22% starting January 1st. It now has significant incentives by using prevailing wage commitments and apprenticeship commitments to lift that to a baseline of 30% with the potential to raise it above that. As a result it is possible to use solar power to deliver cheaper, less expensive power to consumers everywhere in the United States. That's everywhere, every community can deliver cheaper power than the price they're paying for fossil fuels right now.
And to put that in perspective, the marketplace for renewable energy is literally the size of the energy market in the United States. As we reach that tipping point where the cost and delivery of renewable energy is less than fossil fuels, it has a monumental impact on our future. The single most important aspect of this investment tax credit is that in most cases it operates without a cap. That is, there's no upward limit on how much can be utilized in the form of investment tax credits over the next 10 years. In order to meet the reconciliation requirements of Congress so that this could get passed without getting past the filibuster, they had to make certain assumptions about how much foregone taxes would be incurred by utilizing investment tax credit.
Communities can vastly outperform those assumptions with low cost power by being organized. I want to emphasize that because it's the ability to expand significantly from the original contours of the Inflation Reduction Act to meet the requirements of communities and especially those environmental justice communities, as Johanna said just a moment ago, though the intention was to have 40% or the Justice40, only 16% is earmarked. That doesn't mean that's the maximum that can be in these communities, it's just the maximum that is earmarked or community organized block by block community organizing can lift those numbers. Let's see. Next slide please. The incentive strength in solar deployment in areas that serve vulnerable populations and that includes tribal lands, low income communities, communities impacted by closed coal power plants by coal mines.
So those census tracks within the low communities themselves throughout the country following the poverty statistics and then special incentives for utilization and affordable housing. There are areas that could be significant, even more significant in the reduction of electricity costs. Throughout the country electricity rates can be reduced for consumers from 10% to 70%. That's a massive change. I'm focused on the economics of this because the economics of it drives the private investment, which must come to the table to match or literally exceed the amount of funding that is being provided by the federal government. So for example, if the 30% investment tax credit is available, 70% of those capital costs have to come from other sources. Now, among those other sources is 27 billion that is set aside for National Green Bank through the EPA.
But other than that, it's mostly private investment that has to be brought to the table to accelerate and amplify the commitment of this legislation. Next slide please. In the economic development range, focusing capital has a tremendous impact on economic development, especially on the production of living wage jobs. These living wage jobs are tied to apprenticeships, an ever increasing quantity of apprenticeships that are needed or utilized to enjoy the benefits of these credits. Coupling those two together creates pathways for living wage jobs that simply haven't been available in the past. This is a fast growing area, it's an area of trade training. These are not necessarily white collar jobs, but they're jobs where there is a lot of opportunity, there's abundant capital following these investments. Next slide please.
I have a couple examples. I picked Cleveland. Cleveland, Ohio, because many of you may know it I'm from Columbus, Ohio, but I picked it because in some ways it is emblematic of heartland communities that have a fair number of low and moderate income homeowners. Ohio does not enjoy benefits of significant climate action by its Republican super majority. It's a very static environment for renewable energy. Nonetheless, this example of a 100 megawatts of equitable solar development deployed in Cleveland shows some statistics. So metric tons of carbon emissions reduced 1500 new living wage jobs, 292 million in local economic impact and 419 million of health benefits generated for the region. These are statistics that have been developed and assessed by Ohio University and by the EPAs co-benefits risk assessment model.
But 100 megawatts represents a tiny fraction of the production of power in the state of Ohio. 35,000 megawatts were deployed last year in Ohio. So you can see the growth potential. This 100 megawatts is just a placeholder. It could be 10 times that, it could be a hundred times that in communities around the country. Cleveland is but one example of that. Next slide, please. I apologize if I'm speaking quickly, but I'm going to try to stay within my timeframe. I picked another program that is very focused on low and moderate income homeowners and it's the rebate program up to $14,000 of direct rebates for energy efficiency deployment within their homes. If you skip to the next slide, I took very quickly, I took again, the city of Cleveland. Mark, could you go to the next slide? Thanks.
The national allocation is 4.9 billion from the IRA for this particular item. Cleveland's share would be tracking the ARP investment allocation, which is based on both population and poverty. If it were deployed to the Cleveland level in a pro rata basis, $54 million, 4,000 families, homeowners would be served. The living wage payroll associated with that investment is about $30 million creating living wages for about 450 plus workers. The median value of real estate in Cleveland is rather low. So this improvement would create a 19% improvement in their home values. So that's wealth building for the families. It's jobs potentially created within those same communities that lift people from poverty and into a living wage. And it is serving both climate justice and environmental justice at the same time.
This is an example, again, this is a national program. It's going to be deployed street by street, home by home. And yet the beneficiaries of this, we would hope, would create a constituency that may be able to lift the IRA to the more elevated aspects of the Green New Deal. So skip to the next slide. I want to leave you with just this thought. The IRA has embedded tools that permitted to punch way above its weight. So the uncapped investment tax credit means that if successfully deployed, if activated by interested corporate investors within the global capital markets, those dollars can be brought to bear and they can be brought to bear in specific communities that are the most vulnerable and that have with that some significant benefits.
I'd like to think that it's our, as John had said earlier, it's not self executing, but it can be executed in a way that might lift it to the next level, to that level of the Green New Deal. Thank you very much. I have my contact information is there and I guess it'll be a placeholder in the slide, but handing it back to Eli.
Eli Moore:
Thank you Joe. Lots to think about. We're going to take some time now for questions of the first three speakers, John, Johanna, and Joe. I think we can take down the slides and if we can spotlight the three speakers and we've been tracking some of the questions that have come up in the chat. One quick detail is, yes, we'll be sharing the slides in a follow up email to everybody who registered for the event as well as some of the resources we've gathered and what folks are sharing in the chat as far as resources. There's a question that came up around whether there are wins in these pieces of legislation beyond increasing dollar investments. I think that maybe talking about rules or policies that are in the Act that don't necessarily create new revenue but will be important to note. Anybody want to speak to that?
Johanna Bozuwa:
I can jump in and I'm sure, Joe, you can probably fill in the blanks a lot too. One of the things, because the Inflation Reduction Act is a reconciliation bill, it actually limits the amount that you can do that's not attached to the budget. Everything has to be connected in some way to funds and investment. This was also true in Build Back Better for instance, and the original clean energy payment plan is what it was called in Build Back Better, created incentives, but you only got the incentives if you had achieved certain levels of investment in renewable energy. It was like a clean energy standard, but it was navigating itself through funding for that reason. So what you'll see and what I think is really powerful when it comes to the Inflation Reduction Act, and Joe hit on this as well, is it actually tied things to that investment that were really big wins.
I think one of the biggest ones was that you don't actually get access to the full amount of the subsidy possible for the renewable energy incentives unless you are paying your people prevailing wages. And you can get even more if you invest in an environmental justice community or are putting your renewables on public housing. They've actually found these workarounds even though they couldn't have, this is the new law, you can't do this anymore or you have to do this. They created ways to connect incentives to much better standards that are going to do things like make green jobs good jobs.
Eli Moore:
Thanks Johanna. Joe, do you want to add anything?
Joe Recchie:
No, that was really well stated. I think that I would only add one thing in that reconciliation. An example of that is they treated the minimum tax on large corporations on the side of the ledger that generates revenue, then they allowed the offset of that, so you can even cheat on that dollar for dollar by putting money into renewable energy. You can see how in a way it's a little bit of a Trojan horse in a positive way, the reduction in revenue and the devotion of funds to renewable energy could actually increase the bulk of the Inflation Reduction Act. And again, because it's uncapped, there could be a massive shift from corporations that wish to offset that tax into these specific channels that have been designed to create jobs, living wage jobs and address climate.
That's why I think of it as ability to punch above its weight is it could grow while we're watching it if well done. And the effect of that would be a less of a step up into the Green New Deal because we're actually actuating it at a higher level.
Eli Moore:
Thank you. Shifting to the political context, there's a question about the future of this bill should Republicans grow control of Congress and the presidency, and I would add state government as well, and how the control of state governments may shape the rollout and the implementation.
Johanna Bozuwa:
Joe, do you want to take that one first or would you like me to jump in?
Joe Recchie:
No, it's above my pay grade.
Johanna Bozuwa:
Cool. I can jump in really quickly. I think that when it comes to the congressional level, the idea that we would lose Congress, definitely as we mentioned like IRA is biggest climate bill that's ever passed. And as Joe has really rightfully said, we can leverage it even beyond what it's stated on the paper, which is really powerful. I think it becomes really hard for us to pass new climate legislation. And so that will be a big fight moving forward, in my mind. It really means that we need to see President Joe Biden step the heck up and fill those gaps where he can on things like the supply of fossil fuels, like using, for instance, his power with what's called the Defense Production Act to incentivize even more investment in housing, in heat pumps, in all of these different pieces. So we should be using the other powers as that happens.
I think the piece when it comes to state governments is a really important one. A lot of states, if it's held by more conservative areas we've seen them reject federal funding, which will be to the detriment of communities on the ground. Some of these we have workarounds, they're open to non-profits for instance. The biggest subsidies that were created actually are flowing directly to corporations, to governments or to non-profits. It means that we'll have to leverage and mobilize our communities to use what is available while also doing the political organizing that's necessary to ensure that we are able to pass climate ledge moving forward.
Eli Moore:
Thank you, Johanna. And so another question here around implementation and organizing is about how we center indigenous voices and wisdom in the climate justice movement and what this looks like in the work around the IRA, IRA implementation. And a related question about the role of refugee and immigrant communities and the way that they're intersecting with IRA in its implementation.
Joe Recchie:
I can step up on this for a moment if you will, both with respect to refugees and immigrants and other vulnerable populations tying this together with job training because that pathway is so clear, the benefits, just to put it in context, that investment tax credits actually reduced the 6% from 26%. The stick part of it is if you don't follow the pathway that we're creating for jobs in the United States, you don't get much of a credit at all. You're almost down to zero. But when you follow the pathway, you get some good benefits up to the 30, 40, 50% as it has. We have a very low unemployment rate right now across the country. So the pathway, bringing people into these jobs and training them makes a lot of sense.
Here in Columbus, Ohio, I'm on the board of the largest resettlement organization and they have placed 88 refugees into a union electrician shop that they have moved from apprenticeship into journeyman level living wage jobs. And so much so that some of them with their training have broken off and formed their own companies and they're employing other refugees in that and recreating their own training process. I do see that as being testimony to the way America was built in the past. We had many waves of immigrants and refugees that have come here, brought their training skills and aspirations to the table. I see that happening again with this, especially with this pathway.
Johanna Bozuwa:
That's a really good point, Joe. And just to build a little bit, there was a certain amount of funding that was specific to tribal nations, especially rural electrification, getting solar into tribal, into native communities. So that is defined. But I think that there's a lot more that we could do. There's so much traditional ecological knowledge that is not actually integrated into how we for instance do our fire planning and resilience, which is so critical in a place like California. There is a certain amount of funding for forest management that's in the Inflation Reduction Act.
I think that that's actually a place where when we're talking about states, they can play a really big role in directing funding that's going with them, partnering, doing public and community partnerships or even let's say intergovernmental partnerships with tribal nations on renewable energy, on efficiency on forest management, that is learning from the traditional ecological knowledge that native communities have, that has not been centered in the past but has to be a part of our future.
Eli Moore:
Yes, thank you. The future absolutely depends on that. It feels like one of the actual justices that that's essential for all of us to finally honor that wisdom. We're a little short on time and so I think we need to close the discussion right now and move into the next set of presentations and then we'll have another discussion after that. And so I'm excited to introduce Sarita Turner who is with Prosperity Now. She's a senior strategist there and has worked in White House and federal departments as well as community based initiatives extensively with congressional federal state and local leaders to develop comprehensive equitable development approaches. And so she's going to help us start to continue to connect the dots and strategize around how community driven processes can leverage the Inflation Reduction Act. Thank you, Sarita.
Sarita Turner:
Thank you Eli. Good morning and afternoon everyone, depending on where you are situated in the nation. I first want to thank the Othering and Belonging Institute for inviting Prosperity Now to be a part of this extremely important conversation. The critical actions that John talked about that need to take place after that are being planned now and after this conversation and really for having me in particular here today. Prosperity Now, for those of you who don't know it, is a 40 year old national nonprofit that works at the intersection of economic opportunity, wealth building and justice. I'm having a little frog in my throat. Excuse me. Thank you for advancing to the next slide.
We're audacious at Prosperity Now, we have an audacious goal, which is to transform America's economic system so that in a generation low to middle income and BIPOC households have greater opportunity and success to build sustainable prosperity. In order to do so, it will take innovation, partnerships and the ability to advance efforts at scale. Next slide please. Our actions to solve the racial wealth divide include but are not limited to lifting up what works, demonstrating proven and emerging solutions, using design thinking and data, innovating and incubating big ideas in partnership with thought leaders and organizations around the nation, securing change through policy and movement building to align culture change, narrative change and policy change. Next slide please.
So given as such, we are working now to advance a new key innovation that will tap the rapidly growing climate economy as an economic opportunity and wealth building tool. We really think about this strategy in going beyond the much needed efforts that are happening on jobs and workforce to advance entrepreneurship and broader business opportunities, ownership opportunities within the climate economy. We define the climate economy as the global and domestic economic activity that is fostered by private sectors, governments, and communities in order to respond to, recover from, mitigate, adapt, and build resilience to the impacts of climate change.
So as we are here today, talking about investments, right? This landmark investment, we know that climate change has catalyzed and is catalyzing record spending, which is facilitating the growth of this new economy. And so the World Meteorological Organization estimates that climate related disasters, so now we're just talking about disasters, not all of the ways that economic activity is being generated, but climate related disasters are fostering government spending on average of $200 million a day. In 2019, the US clean energy spending hit a record 78.3 billion led by investments in wind and solar. These investments are expanding in scope, scale, and frequency. And my co-panelists earlier were talking about these investments.
And in the 2023 federal B budget, this administration allocated an additional 45 billion in new spending for climate change, clean energy and environmental justice programs. US climate investments are causing the clean energy sector to outpace traditional energy sectors and job growths. And the power sector zero emissions generation was responsible for 544,000 jobs in 2019, which was more than double the 214,000 jobs in the fall field generation. US businesses are also enjoying record industry growth and increased clean energy market share globally. The US energy industry generated 238 billion in revenue in 2018. Next slide please.
We are really in a time where we are seeing record spending and we know that growth is happening, but is the growth shared broadly? And more importantly is it shared with those that need it the most? Data collection on climate economy participation for black and brown owned businesses is almost nonexistent. We really need to beef up data collection on businesses that are participating in the climate sectors by race. But as sporadic as the data is, we can surmise, right? From what we're able to piece together and some of those data points are on the screen that no, black and brown communities are not enjoying these games. For instance, after Hurricane Harvey, the same year, less than 1% of the contracts went to black and brown owned firms.
The disparities in contracting are compounded by the lack of access to disaster recovery dollars in small business lending. Another study found that the small business administration approved over 52 disaster recovery loans and communities that were majority white while approving only 20% of recovery loans in majority black communities. Next slide please. So rather than benefiting from climate related economic activity and communities of color we know are hurt the worst, they're the most vulnerable because of a lot of the historic discriminatory policies and actions that John weaved into his conversation that black and brown communities are already experiencing extreme wealth gaps and growing wealth gaps and that climate change is exacerbating those gaps for black and brown communities. Next slide please.
Finally, let's talk about the Inflation Reduction Act. I bet you thought when's she going to get to that? This landmark legislation offers a window of opportunity to engage black and brown communities in the economic benefits of the climate economy. So again, jobs are critical, jobs are important, all the work that we're doing and much more needs to be done around jobs. But we need to also advance wealth building opportunities. They're our folks who are experiencing wealth, who are the owners of the companies that are the manufacturing and the suppliers and the supply chain. So we really need to focus on that. Next slide please. I'm going to speed it up because I got a one minute warning.
Unfortunately the IRA falls short on this, it doesn't get to the ownership opportunities of all the investments that are needed that are going to be made as a result of IRA. But who is going to make the real money off of the investments, off of the cleanup of pollution that occurs? Which companies are going to be contracted? Next slide please. There are tremendous opportunities within this legislation how it's implemented to actually make a difference on the unequal way that black and brown businesses BIPOC businesses are participating in the climate economy. CDFIs are actually well positioned to administer the resources of the Greenhouse Gas Emissions Reduction Fund.
And so EPA really needs to think about how to work with and commit to working with the African American Alliance and the National Alliance of Latino CDFIs executive, NDC fund, the Indian collective to really think about how these CDFI collaborations are better situated and have the capacity to actually get funding out to black and brown businesses to engage in the work that will be catalyzed the contracting opportunities that are being catalyzed through the Inflation Reduction Act. Next slide please. What can be gained if we are insured the economic benefits from IRA and other federal initiatives and spending programs flow to black and brown communities? First of all, investing in black and brown communities will grow the overall economy.
One study estimates that black and brown businesses were to reach parity in ownership with their non-black peers, that would be an additional 800,000 US firms and potentially 1.6 million additional jobs. For Latino businesses, parity would yield 735,000 new businesses and 6.6 million new jobs. Black and brown businesses are more likely to hire black and brown workers, but they are also in these conditions more likely to be sole proprietors. And we know that the climate economy is contributing to these disparities. One study observes that the impact of FEMA dollars on self-employment rates resulted with the counties with high damages that receive FEMA relief funds saw an additional 897 self employees with by far whites benefiting the most.
If black businesses were capitalized enough to pay the same wages as non-black firms, that would be an additional 25 billion in income, which would circulate through black and brown communities improving the quality of life through increased opportunity. We must make the economic opportunities of the IRA work for all. Next slide please. Thank you. I look forward to more dialogue.
Eli Moore:
Thank you Sarita. We're going to turn now I'm just going to quickly turn over to Ann Pratt, our final speaker, who is senior campaign strategist for leveraging federal funds for state and local victories at the People's Action Network. Ann has served as the executive director for numerous organizations including Progressive States Network, CT Early Childhood Alliance and others, and is going to help us understand what's at stake and how organizing can make a difference in how IRA is implemented. Over to you Ann.
Ann Pratt:
Thank you so much Eli, and thank you to all the panelists who have been speaking today. It's an honor to be here. So next slide. People's Action is an organization that builds the power of poor and working people in urban, rural, and suburban areas to win change through issue fights and elections. Next slide. We are a network of 40 power building member organizations across 30 states and we take collective action to change national and state level policy. Our mission is to create a long term agenda for racial, economic and gender justice by investing in people and their organizations at local and state federal levels. Next slide. As Eli mentioned, we do have a program, or maybe not mentioned, but we have a program at People's Action called Leveraging Federal Resources for State and Local Victories.
This is a representation of the active organizations in this what we call cohort or program work that we do. All of these organizations are member led and they are what we call power building organizations, which is focused on making sure we get the people in the communities to drive the agenda and to be engaged in actually making these programs work based upon their own needs. We are working across 18 states, and this is a list of many of the organizations that have not only engaged in this work but are winning victories and are wrestling with how to make this work work for their communities. Let's do next slide. We talk about this in regards to identifying equitable development initiatives, again, identified by the people in the communities.
I also want to just step back a little bit and say that this cohort and this body of work at People's Action actually started in response to the American Rescue Plan and has been sparked to continue to look at not just one pot of federal resources, but the multiple pot of federal resources, including the Bipartisan Infrastructure Law that was also passed, which has an enormous amount of money. And now with the Inflation Reduction Act. And People's Action was also engaged in advocating alongside with some of the actions that Johanna talked about in the beginning, People's Action was part of trying to push that through as well.
But some of the examples that I list here are the examples of organizations that are implementing using federal resources to implement these kinds of things. So storm recovery in New Jersey, many people have not gotten remediation for Ida and Hurricane Ida. So lots of energy going into getting those resources into people's hands to get their homes fixed up after the hurricane. In New York they're doing some youth infrastructure work and that is also infrastructure work that came from knocking on people's doors and getting people engaged. Affordable housing, and I'm going to go into showing you a bit of our viewpoint of how to look at programs that can be established based upon communities needs, that we believe could also be applied to the Inflation Reduction Act as well.
I'm going to talk about an affordable housing case study at the next slide. But just to give you an example of some of these initiatives that are bubbling up from the ground driven again by community members, there's an overland flooding initiative in Ohio that we're working on using not only ARP but also the infrastructure dollars and seeing opportunities with the Inflation Reduction Act as well. In Milwaukee we're doing a good jobs campaign and also using our end infrastructure dollars to move that forward. These are just examples of the ways in which we are looking at doing some organizing and making things happen with community members leading the charge and leading the work. Next slide.
Equitable development, I gave you some examples of what we regard as equitable development and some of the issues that we are working on, that again we will be connecting and wanting to include obviously some of the provisions in the IRA, which also this panel has provided lots of different ways to go at that. Important in winning victories and getting things done in communities not only figuring out what is equitable development based upon people's needs and coming up with proposals that you want to be implemented, in order to do that in a big bold way, People's Action is deeply committed to what we're calling, co-governance, which is aligning with those people in power who share our values, who maybe we even have had an opportunity to elect to be co-conspirators in the best of ways in how to move big, bold initiatives to make things happen that haven't happened before.
And then finally, a huge issue that we believe that's also been referenced by other panel members is implementation, particularly in black and brown communities, as many panelists has already mentioned, who leads, how they lead and what they're leading is hugely significant. If you have an apprenticeship program, you have a jobs program, you have housing development program, making sure that those programs actually get to the people and serve the people in the way that makes a difference in your lives is a huge body of work that we are deeply committed to developing and improving frankly. Next slide. The case study that I'm going to go over quickly is a Whole-Home Repairs Program in Pennsylvania. It was a partnership between organization called PA Stands Up and State Senator Nikil Saval and other partners in Pennsylvania.
This program basically gives homeowners up to $50,000 to do home repairs, which is a game changer in Pennsylvania. Not only does it give home repair opportunities for home, but also small landlords. And in that it requires that there be a job development, job apprenticeship and good jobs component to the distribution of these funds. And it also includes weatherization programs. Many of the programs that we've worked on for affordable housing, which have included not only PA, but Connecticut, Maine, we're also working in Washington state to do a Whole-Home Repairs program like Pennsylvania, which is that so many homes, particularly older homes, can't get weatherized because their roofs are leaking or they just need some repair, but they also can't get the money to get those repair done.
These programs, Pennsylvania, Connecticut, and Maine are addressing those very problems. In Connecticut there's also a provision that the program will include heat pumps and solar panels. Again, seeing that IRA as huge to being able to invest in a program that already exists. This program in PA is huge and was the result of people identifying the issue. It was also the result of a bipartisan effort. You can go to the next slide. That was actually created by PA Stands Up and Nikil Saval in terms of winning this victory. It was both Republicans and Democrats. The other important piece out of all of this big huge victory, 125 million in American Rescue Plan funds was put in to start this program. We understand that this program is going to need a lot more money and our next step is really not only just figuring out and making sure implementation really works for people in community, but that there's going to be more needed money to do this stuff like weatherization.
And hopefully we'll get to a point where it'll be solar and heat pump installations as well. This is the next slide, and it'll be the second to the last, which is just talking a little bit about the state and local funds investment. Again, this has been a focus, but it connects very significantly to the infrastructure bill and also IRA. We will be continuing to do the fight on implementation, on fully funding these programs and continuing to create these programs in other states. I just put my timer on. Last slide is my contact information. That's okay. It'll be there. Eli, just wanted to make sure I got us on time, so thanks so much.
Eli Moore:
Thank you. We have time for a couple questions and some great questions have come up in the chat. One of them is, curious if the panelists have thoughts about how the clean air energy initiatives in the IRA could be fashion to prevent or at least slow down displacement and gentrification in low income areas and BIPOC communities. Sarita, any thoughts on that?
Sarita Turner:
That's a great question. My thoughts are really related back to true economic opportunity flowing as a result of the investments that are being made. We need low cost solar, we need alternative sources of energy, we need pollution cleanup, we need all of the things that, investments that will be made, but we also need to be the people in those communities that are actually benefiting from the economic activity. So if people are making money, if they're owning businesses, if they're hiring from their communities, if the money is going circular in the community, there are opportunities there. It catapults itself, right?
Then you buy homes in those communities or you buy the duplex or the fourplex in that community, you provide the housing for your community members. As we think about this, we really need to follow the money and understand, right? If the investments are going into the community, but the money that's being made out of them, off of them is going out of the community, that's not a process that is really going to help to lift people economically.
Ann Pratt:
I also just so support what you just said, and I also want to lift up the fact that I think Johanna mentioned the Green New Deal for public housing that Bernie Sanders had mentioned. So gentrification certainly can be helped if you have more social housing and less profit driven housing. So just to put that up. And many of the affordable housing initiatives that are now being created were really inspired by the Green New Deal public housing proposal, which was about making sure you have all of the energy efficiency provisions in public housing, because you can do that presumably a lot easier than private.
Eli Moore:
Thank you. Such an important question and such an ongoing struggle. The other question here is around, do you anticipate pushback from more conservative communities in implementation of the IRA and its various efforts to center the needs of folks who have been most left out and most impacted, and how are you thinking about the strategy in those areas?
Sarita Turner:
You want to start, Ann?
Ann Pratt:
Yeah, sure. We believe that yes, of course there will be pushback and a lot of it is just about organizing because we're also talking about organizing in communities where it's black and white who are going to need to be addressed by this. So you make it something that sort of we all do better when we all do better, but it's going to take organizing. I think that's the answer. It's like you have to build the relationships and you have to build the community of people who say, this is actually for all of us. And we need to address those who've been left behind.
Sarita Turner:
I agree wholeheartedly. I think that a big part of what IRA is going to catalyze is jobs and opportunity, right? And so if we think about how to ensure that everyone can participate, it's taking a page out of John's playbook around targeted universalism where the opportunities are for everyone. But we have to go to where the bleeding is the most acute. First stop that and then build out. But we have to think about ways to talk about the work maybe in ways that will resonate with some. And then we just know there's going to be straight up opposition no matter what we do or how we frame it or what opportunities are available for who that are going to come. And that is where we have to arm ourselves politically and be ready to fight and get to the polls, organize our communities, and ensure that we keep a forward trajectory going on this important work.
Ann Pratt:
I want to just add to stress that the bill passed Pennsylvania, a very conservative state and Republican controlled, the leaders there worked out a way in which Nikil Saval did not really want to use the word blight, right? Because blight in Philadelphia means something very different and is not a good term, but Republicans needed to use that in order to get it passed. And so they said, we'll do a Whole-Home Repair, and if you need to use blight, you use blight to get it passed. So in some regards there's a way in which relationships across lines can be built strategically.
Eli Moore:
All right. On that note of hope and the need for organizing and building bridges, we'll have to end. We've used every last minute of this event and just really appreciate all the presenters and everybody who participated and invite you to share some feedback with us through this evaluation form in the chat. We'll be following up with an email to everybody who registered. That gives you a recording of the event, a link to the resource sheet, and a copy of the slides. So may the work continue and be well everybody.
Ann Pratt:
Thank you.
