If the Senate bill passes, climate technology could see major funding.

Climate and energy projects could see $370 billion in new funding thanks to a bill by Senate Democrats. It’s called the Inflation Reduction Act, and it revises the tax code and lowers drug prices.

Remarkably, with the support of West Virginia Senator Joe Manchin, the bill appears to pave the way for passage.

The Marketplace’s Megan McCarthy Carino spoke with Jay Koh, managing director of Lightsmith Group, a private equity firm that invests in climate technology. He read his long account and said that climate change technology would bring about change. In the year It provides four times more funding than the last large federal infusion in the 2009 stimulus bill. The following is an edited transcript of their speech.

Jay Koh: There is pure technology investment. There is an expansion of demand in the energy sector, but so are other sectors. And then, there is the direct procurement that is also being done by the government. And unusually, this includes significant financial support for things in the agricultural sector, the forestry sector, rural communities, and also a real focus on disadvantaged populations.

Meghan McCarty Carino: right. Let’s look at one segment, electric vehicles. [It] A $7,500 tax credit for new clean-air vehicles and $4,000 for used restorations, that is new. How big of a deal is the amount of money given to EVs as the car market sees a shift to cleaner cars?

Koh: Well, I think it reinforces that this is not a moment in time, but rather a trend line. I think it’s a critical moment where you see the first consumer adoption technology has reached this point. So what you’re seeing here is a conversation between the federal government, innovators, investors and society that I think will make the transition to a climate-smart future more likely and faster.

McCarthy Carino: More broadly, what does an investment of this scale mean for the climate technology sector?

Koh: I think it means a lot. Setting the stage in the stimulus package in 2009 was an important first step in creating the basic foundation for energy transition. What you have here now is four to five times more than the long-term funding of many sectors of the economy. And the focus is not just on the energy transition part of it, but making the entire economy aware of and resilient to the impacts of climate change.

McCarthy Carino: Now, he noted, there is a greater focus on environmental justice investments to help address some of the disproportionate impacts, environmental impacts, that we see in low-income communities of color. How does this bill support climate adaptation, and what technological innovations might emerge from it?

Koh: Yeah, I think the bill actually has three main parts, the way we think about it. First is direct support for technology. There is $2 billion for a national lab to accelerate energy research. Baked into the bill are the first steps in support for climate-smart agriculture, both through direct aid and tax credit support, and other activities to help make that transition happen. So at the basic technology level, there is support for pushing forward the frontier that we expect with clean transitions and robust transitions. And the second part is that there is a lot of demand to accelerate consumer and industry adoption of these types of technologies and approaches by creating incentives, tax credits and so on. And finally, the government itself is a direct actor. They’re buying more than $9 billion in clean technology, and they’re moving toward a more resilient economy in general, and they’re especially focusing a lot of activity and helping people in need through environmental and climate-justice aid and even access aid and similar approaches that are really unexpected.

McCarthy Carino: When we talk about those communities, what kind of solutions are we talking about?

Koh: Well, I think we need to think about the transition now as a Climate 2.0 strategy, not just about electric vehicles or reducing greenhouse gas emissions, but at the same time building resilience into those communities. If you look at where the impact of covid is, that’s where the effects of pollution are also happening. So you need to have a transition that allows communities to have both a sustainable future and a low-carbon future.

McCarthy Carino: And what about the U.S.-style role on the international stage in this creative sector? I mean, where are we now? And where can we be such an investment?

Koh: Well, assuming this goes forward, it suggests that the United States has begun to take a real leadership position. The real impact of such a law is that private sector actors have started to invest, there is a stable forecast of future conditions and resources to realize the next generation of innovators and future challenges. Being able to face more stable assumptions about how quickly this transition can happen and how it needs to be supported moving forward.

Related links: More insight from Meghan McCarty Carino

If, like Jay Koh, you want to read more, here’s the full 700-plus pages of the 2022 Inflation Reduction Act. And, mercifully, a summary of all climate policies from Fast Company.

For consumers, of course, one of the most immediate results are those clean-vehicle tax credits. It’s $7,500 back on new cars, which Car & Driver notes are a good deal for buyers of Tesla, GM and Toyota vehicles. Those manufacturers were supposed to begin phasing out the tax credits after selling 200,000 clean cars.

The credits are available at the time of purchase, not when buyers file their taxes. And for the first time, it extends a credit of up to $4,000 or 30% of the sales price — whichever is less — to used electric vehicles.

Average price of a used EV last month? Recurring automobile, according to research firm: $40,714.