Key Senate Democrats have agreed on a new proposal that suggests major U.S. climate action is still within reach. 

With nearly $370 billion in clean energy investments, the Inflation Reduction Act of 2022 represents the largest piece of climate legislation in U.S. history.

"The act would deliver lower energy costs, healthier communities and significant progress on climate change," Environmental Defense Fund president Fred Krupp said in a statement. "It would be an historic step by Congress to improve people’s lives."

The agreement between Senate Majority Leader Chuck Schumer (D-NY) and Senator Joe Manchin (D-WV) includes:

  • New tax incentives for new renewable energy and a 10-year extension of tax credits for wind and solar.
  • Electric vehicles incentives, including a $7,500 rebate for new vehicles and a $4,500 tax credit for used ones. There's also $20 billion in loans to build new clean vehicle manufacturing facilities.
  • A program to encourage the reduction of methane emissions from oil and gas production, accompanied by more than $1.5 billion for the EPA to provide technical support to companies to reduce these emissions. Methane is a powerful greenhouse gas. Leaks harm human health, waste energy and drive climate change.
  • $20 billion for climate smart agriculture, which could include measures that reduce methane emissions from livestock, cut fertilizer needs and help lock carbon in the soil.
  • $60 billion for environmental justice measures, including grants for community-led projects to fight pollution, equipment electrification at ports and cleaner school buses and garbage trucks.

See the full list of climate-related benefits here.

The news comes just two weeks after negotiations appeared to end abruptly. EDF and other environmental groups urged senators to reach an agreement to address what President Biden has called a "code red" emergency. 

The new bill is expected to face a Senate vote next week. It also will need to go to the House, which approved a similar package last year, before it lands on the president's desk to sign. 

Elizabeth Gore, EDF's senior vice president for political affairs, called the news an "incredible breakthrough." 

"We will continue to push forward until the last vote is counted and the legislation has been signed into law,” Gore said.

EDF also pledged vigilance to ensure the act passes and delivers on its promises. 

"We urge Congress to move quickly to get this passed," said EDF's Krupp. "Our families and communities, especially those of us living on the frontlines of the climate crisis, need these fiscally responsible investments now and for the future.”