...
By Jeff Young
Environment and Sustainability Editor
0
Share
Newsweek is a Trust Project member
See more of our trusted coverage when you search.Prefer Newsweek on Googleto see more of our trusted coverage when you search.
President Joe Biden's administration finalized on Tuesday rules that link tax incentives for clean energy projects with higher pay and worker training. According to the new policy, developers will be able to claim far more generous tax incentives by following standards on prevailing wages and hiring registered work apprentices, so trainees can be paid on the job.
"Clean energy jobs will be good jobs," Senior Advisor to the President for International Climate Policy John Podesta said in a call with reporters on Monday previewing the announcement.
The Inflation Reduction Act, or IRA, Biden's landmark 2022 legislation on climate change, offers historic levels of support for a range of clean energy projects including solar and wind installations, electric vehicle and battery manufacturing, EV charging infrastructure and home energy efficiency improvements. The newly finalized rules clarify how companies can qualify to multiply tax credits from the IRA by five.
Read More
Meet the Man Mixing Concrete and Corals to Defend Miami in Hurricane Season7 min read
Experts Doubted Americans Would Pay for Sustainability—Were They Right?12 min read
Laughing Gas Is a Serious Problem for the Climate. Better Farming Can Help.5 min read
"No developer will leave that money on the table," Podesta said.
...
The prevailing wage is the combination of hourly pay and the value of benefits that workers earn in a specified type of work in a given area, as determined by the Department of Labor. Usually, it's the same amount as the union wage in a region. Prevailing wages have long applied to workers on federal projects, but this is the first time they will apply to clean energy projects.
Union groups applauded the move. North America's Building Trades Unions President Sean McGarvey, who joined administration officials on the call, said the rules will make clean energy better for working people.
"This has been a 25-year crusade for us when we talk about what a just transition looks like for workers," McGarvey said.
Before the Inflation Reduction Act, he said, the average solar worker was earning about $16 an hour, far less than what many comparable jobs in fossil fuel industries offered.
"That's why we were reluctant to embrace the clean energy transition," McGarvey explained, before predicting large pay increases in clean energy work.
The rules also mark the first time the federal government is providing an incentive for apprentices, National Economic Adviser Lael Brainard said during the call.
"Paying fair and competitive wages helps workers with 'earn as you learn' apprenticeships," she said. That not only helps workers who want to learn a new trade, it is also aimed at filling a shortage of skilled workers.
"We need skilled carpenters, electricians and construction workers," Treasury Secretary Janet Yellen said.
Electricians could soon be in short supply according to the federal Bureau of Labor Statistics, which projects a 7 percent increase in demand for electricians over the coming decade, compared to 2021.
Some exemptions apply depending on a project's size and when work began but, generally, developers will need to ensure that at least 10 percent of their workers on a clean energy project are enrolled in a registered apprenticeship in order to qualify for the tax credit bonus.
Conservative critics who opposed the IRA point to the added costs for the prevailing wage and apprentice programs, arguing that the requirements add to construction costs which are then passed on to taxpayers. Cost concerns were part of the reason Senate Republicans opposed the IRA and the bill passed the Senate on a narrow party-line vote.
Despite the partisan divide in Congress, the Act is popular with voters—at least those who know about it. Recent public opinion polling by the Yale Program on Climate Change Communication found that 74 percent of registered voters supported the IRA after reading some material explaining it, including a majority of those who identified as moderate Republicans.
"When you tell people what's in it, overwhelmingly Americans of all stripes support it," Yale program founder and director Anthony Leiserowitz told Newsweek. However, the same survey found that only 39 percent of voters have heard "a lot" or even "some" information about the Act.
"There's a huge communication problem," Leiserowitz said. "But there's also an enormous communication opportunity."
Those numbers might explain why the Biden administration opted to make a high-profile announcement about the finalization of a tax rule.
View 0 Comments
Submit Correction
View Editorial & AI Guidelines