[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                  A BIG CLIMATE DEAL: LOWERING COSTS,
                 CREATING JOBS, AND REDUCING POLLUTION
                    WITH THE INFLATION REDUCTION ACT

=======================================================================

                                HEARING

                               BEFORE THE

                        SELECT COMMITTEE ON THE 
                             CLIMATE CRISIS
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              HEARING HELD
                           SEPTEMBER 29, 2022

                               __________

                           Serial No. 117-23
                           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]                           


                            www.govinfo.gov
   Printed for the use of the Select Committee on the Climate Crisis
   
                              __________

                    U.S. GOVERNMENT PUBLISHING OFFICE                    
49-423                    WASHINGTON : 2022                     
          
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                 SELECT COMMITTEE ON THE CLIMATE CRISIS
                    One Hundred Seventeenth Congress

                      KATHY CASTOR, Florida, Chair
SUZANNE BONAMICI, Oregon             GARRET GRAVES, Louisiana,
JULIA BROWNLEY, California             Ranking Member
JARED HUFFMAN, California            GARY PALMER, Alabama
A. DONALD McEACHIN, Virginia         BUDDY CARTER, Georgia
MIKE LEVIN, California               CAROL MILLER, West Virginia
SEAN CASTEN, Illinois                KELLY ARMSTRONG, North Dakota
JOE NEGUSE, Colorado                 DAN CRENSHAW, Texas
VERONICA ESCOBAR, Texas              ANTHONY GONZALEZ, Ohio
                                 ------                                
                Ana Unruh Cohen, Majority Staff Director
                Sarah Jorgenson, Minority Staff Director
                        climatecrisis.house.gov
                            
                            
                            C O N T E N T S

                              ----------                              

                   STATEMENTS OF MEMBERS OF CONGRESS

                                                                   Page
Hon. Kathy Castor, a Representative in Congress from the State of 
  Florida, and Chair, Select Committee on the Climate Crisis:
    Opening Statement............................................     1
    Prepared Statement...........................................     2
Hon. Garret Graves, a Representative in Congress from the State 
  of Louisiana, and Ranking Member, Select Committee on the 
  Climate Crisis:
    Opening Statement............................................     3

                               WITNESSES

Dr. Quinta Warren, Associate Director, Sustainability Policy, 
  Consumer Reports
    Oral Statement...............................................     6
    Prepared Statement...........................................     8
Philip Rossetti, Senior Fellow for Energy and Environment, R 
  Street Institute
    Oral Statement...............................................    12
    Prepared Statement...........................................    14
Josh Nassar, Legislative Director, International Union, United 
  Automobile, Aerospace, and Agricultural Implement Workers of 
  America (UAW)
    Oral Statement...............................................    19
    Prepared Statement...........................................    21

                       SUBMISSION FOR THE RECORD

Prepared Statement of Samantha Sloan, Vice President, Global 
  Policy, Sustainability, and Marketing, First Solar, Inc., 
  submitted for the record by Ms. Castor.........................     5

                                APPENDIX

Questions for the Record from Hon. Kathy Castor to Dr. Quinta 
  Warren.........................................................    43
Questions for the Record from Hon. Kathy Castor to Josh Nassar...    44

 
                  A BIG CLIMATE DEAL: LOWERING COSTS,
                 CREATING JOBS, AND REDUCING POLLUTION
                    WITH THE INFLATION REDUCTION ACT

                              ----------                              


                      THURSDAY, SEPTEMBER 29, 2022

                          House of Representatives,
                    Select Committee on the Climate Crisis,
                                                    Washington, DC.
    The committee met, pursuant to call, at 12:47 p.m., in Room 
210, Cannon House Office Building, Hon. Kathy Castor 
[Chairwoman of the committee] presiding.
    Present: Representatives Castor, Bonamici, Casten, Escobar, 
Graves, Palmer, Carter, Miller, and Crenshaw.
    Ms. Castor. The committee will come to order. Without 
objection, the Chair is authorized to declare a recess at any 
time.
    As a reminder, members participating in the hearing 
remotely should be visible on camera. Throughout the hearing, 
members are responsible for controlling their own microphones 
and can be muted by staff only to avoid inadvertent background 
noise.
    As a reminder, statements, documents, and motions must be su
bmit- ted to the electronic repository, to 
[email protected].
    Finally, if you are experiencing any technical problems, 
please inform the committee staff immediately.
    Well, good afternoon, everyone. Thank you all for joining 
this hybrid hearing, A Big Climate Deal: Lowering Costs, 
Creating Jobs, and Reducing Pollution with the Inflation 
Reduction Act.
    We are going to talk today about how the Inflation 
Reduction Act will help families lower electric and fuel bills, 
create jobs, and expand investments in U.S. manufacturing, 
clean energy, clean vehicles, and climate solutions.
    I will recognize myself right now for a shorter opening 
statement. I am going to submit my full statement into the 
record.
    Welcome again, everyone. The Inflation Reduction Act is a 
``cost cutter'' that puts money back into the pockets of 
Americans by making the largest investment in clean energy and 
energy efficiency in the nation's history.
    And it is more poignant today that action to address the 
climate crisis, that we act urgently. And I want to thank 
everyone who has relayed their concerns for my Florida 
neighbors in the path of that monster Hurricane Ian, to the 
Ranking Member, especially for his outreach.
    Rep. Graves, I truly appreciate you offering your advice 
and counsel, because folks in Louisiana certainly have too much 
experience at that as well.
    And as the devastation unfolds, we really owe it to the 
hardworking people across America to reduce the risks and costs 
of climate fueled disasters, whether they are these juiced-up 
hurricanes or the scorching heat or drought or wildfires.
    And that is why the Inflation Reduction Act is so 
important. It will put the United States on a path to reduce 
our heat trapping pollution by roughly 40 percent by 2030. And 
it will strengthen our energy security, lower costs for 
Americans, and create millions of jobs.
    By reducing our reliance on expensive and volatile fossil 
fuels, the Inflation Reduction Act will allow more Americans to 
enjoy the cost-saving benefits of renewables, like wind and 
solar, which are now the cheapest sources of power; more money 
for energy efficiency, to also save them money, make it cheaper 
for them to electrify their homes; make energy and their 
appliances more energy efficient. And those who buy electric 
vehicles will get thousands off the sticker price, and those 
EVs can save you about $500 a year on fuel costs alone.
    According to the BlueGreen Alliance, the new law will also 
help create more than 9 million good jobs over the next decade. 
That includes 150,000 jobs expanding environmental justice, 
which means deploying clean buses and garbage trucks in areas 
with poor air quality, and building new solar and wind projects 
in working class communities and on Tribal land.
    The Inflation Reduction Act is an enormous step forward, 
but we know there is more yet to do. So we have some 
outstanding witnesses here today to help us talk about 
implementation and how we get those dollars back into the 
pockets of our neighbors. So I look forward to today's 
discussion.
    And I will yield back my time and recognize Rep. Graves, 
the Ranking Member, for 5 minutes.
    [The statement of Ms. Castor follows:]

                Opening Statement of Chair Kathy Castor

  Hearing on ``A Big Climate Deal: Lowering Costs, Creating Jobs, and 
         Reducing Pollution with the Inflation Reduction Act''

                           September 29, 2022

                        As prepared for delivery

    In today's hearing, we'll examine the financial benefits of the 
Inflation Reduction Act to American families. The Inflation Reduction 
Act is a ``cost cutter'' that puts money back into the wallets of 
Americans. And it includes the largest investment in clean energy and 
energy efficiency in our nation's history, answering the call to 
mitigate the growing impacts and costs of the climate crisis.
    Action to combat the climate crisis is urgent. And I want to thank 
everyone who has relayed concern for my Florida neighbors in the path 
of monster Hurricane Ian. As the scale of the devastation unfolds, we 
owe it to the hard-working people of this nation to reduce the risks 
and costs of climate-fueled disasters, whether they be juiced-up 
hurricanes, scorching heat, droughts, or wildfires like we see out 
West. In Puerto Rico, nearly 350,000 homes and businesses remain 
without power long after Hurricane Fiona made landfall. And in Alaska, 
a powerful storm brought floods, power outages, and new threats to food 
security. These costly harms underscore the need to strengthen our 
infrastructure and reduce climate pollution. That's why the Inflation 
Reduction Act is so important. It will put the United States on a path 
to reduce our heat-trapping pollution by roughly 40% by 2030. And as 
you'll hear today, it will do so while strengthening our energy 
security, lowering costs for Americans, and creating millions of jobs.
    By reducing our dependence on expensive and volatile fossil fuels, 
the Inflation Reduction Act will allow more Americans to enjoy the 
cost-saving benefits of cleaner, cheaper energy. Renewables like wind 
and solar are now the cheapest source of power. And by installing more, 
we'll pass cost savings to consumers while meeting their energy needs. 
Speaking of savings, the rebates and credits in the climate law will 
make it cheaper for Americans to electrify their homes and make them 
more energy efficient. That includes rebates to switch to cost-saving 
electric appliances and vehicles; to buy clean water heaters and 
cooling systems; and to install rooftop solar and battery storage. 
According to Rewiring America, the average household could receive more 
than $10,000 in benefits to fully electrify their lives, leading to an 
additional savings of $1,800 a year on energy bills. Those who buy 
electric vehicles will get thousands off the sticker price--and they 
could save more than $500 a year on fuel costs alone. Imagine that: No 
more pain at the gas pump!
    The new law will also create millions of good-paying jobs. Under 
President Biden, America reached 3.5% unemployment this summer, 
matching the lowest unemployment rate we've had in half a century. 
President Biden's climate law builds on that progress. According to the 
BlueGreen Alliance, the Inflation Reduction Act will help create more 
than 9 million good jobs over the next decade. That includes 5 million 
jobs expanding renewables and bolstering our grid; 900,000 jobs 
expanding clean energy across rural communities through electric 
cooperatives; 900,000 jobs in clean manufacturing; and much more.
    Crucially, the Inflation Reduction Act will also put 150,000 
Americans to work expanding environmental justice. That's because the 
climate law invests in Environmental and Climate Justice Block Grants, 
which will support community-led projects to address environmental 
harms and public health in vulnerable neighborhoods. Thanks to the 
climate law, we're also deploying zero-emission buses and garbage 
trucks in areas with poor air quality. And we're incentivizing new 
solar and wind energy projects in low-income communities and Tribal 
lands. Finally, the new law directs at least 60 percent of the 
Greenhouse Gas Reduction Fund to EJ communities, empowering our workers 
to deploy rooftop and community solar where they are most needed.
    The Inflation Reduction Act is an enormous step forward. It was 
recently described by the head of the International Energy Agency as 
the ``single most important action'' in addressing climate change since 
the Paris Agreement. But we know there is more to do. Our Select 
Committee will keep pushing for further progress. Congress will keep 
working with the Biden Administration to fulfill this Big Climate Deal. 
And together, we'll keep forging the path to energy independence, which 
will require harnessing the immense potential of American clean energy 
and American ingenuity to lead the world in this transition. For now, I 
look forward to today's discussion with our witnesses.

    Mr. Graves. Madam Chair, thank you for holding this 
hearing. I want to thank the witnesses and thank you for your 
flexibility as well. I know we are shifting times a little bit.
    Madam Chair, I do want to just offer our prayers and 
support to your constituents and the residents of your state. I 
wouldn't wish a hurricane on anyone, and watching this one 
bearing down on your state in one of the worst trajectories you 
could probably have, going along that West Coast with the 
strong side up against the coast and the state, I am very, very 
sorry for what you and your other congressional delegation 
members and citizens of Florida are going through. And just 
know that we are here to offer whatever support we can to you 
and to fellow Floridians in the response and recovery phase.
    Madam Chair, the Inflation Reduction Act--and I am going to 
give a peek to Mr. Rossetti's testimony because I had a chance 
to look at it a little bit. One thing that is noteworthy in the 
testimony is that, according to his projections, approximately 
two-thirds of the emissions reductions--I will say this slowly 
and carefully--approximately two-thirds of the emissions 
reductions that are, I guess, being taken credit for under the 
Inflation Reduction Act would have happened had that Act not 
been passed. So we are talking about hundreds of billions of 
dollars--hundreds of billions of dollars being spent on 
projects that were already going to happen.
    Look, we have been clear in this committee, I think the 
Chair and I share the objective of a trajectory that is lower 
emissions, that is a more diverse, cleaner energy portfolio. 
But making sure--from my perspective, making sure that we do so 
in a way that is based on U.S. resources, that is efficient, 
that continues the trajectory of downward emissions in a way 
that looks globally.
    As the United States has led the world in reducing 
emissions, China has increased four tons for every one ton we 
have reduced. That is not--that doesn't affect the United 
States. That doesn't benefit the United States.
    I quickly want to say in regard to hurricanes, because we 
need to make sure that we are staying factual here. Number one, 
virtually every study, including the journal Nature Climate 
Change, has found that there has been a 13 percent reduction in 
hurricanes--13 percent reduction in hurricanes this century. 
And number two, there have been some studies that have shown 
increased intensification of hurricanes, while a lower number, 
increased intensification. Got it.
    One study that recently came out from NOAA indicated that 
part of the intensification could be tied to the fact we 
actually have cleaner air today, lower particulate matter which 
was reflecting the energy back up and, therefore, we now have a 
warmer Gulf of Mexico and other areas that are resulting in 
higher or faster intensification of hurricanes.
    So I just think it is really important that any solutions 
we focus on are truly based on science and data.
    Madam Chair, I look forward to hearing from our witnesses 
today. I apologize, as I mentioned to you earlier, I do have to 
take off for a few other meetings, but I yield back and look 
forward to hearing from our witnesses.
    Ms. Castor. Thank you very much.
    Now I want to welcome our witnesses. Thank you all for 
being here. Thank you for moving up the schedule a little bit.
    Dr. Quinta Warren is the Associate Director of 
Sustainability Policy at Consumer Reports, where she helps 
develop winning strategies to address the impacts, inequities 
of the climate crisis, and local air pollution, and to build a 
more sustainable future 
for consumers. Previously, Dr. Warren founded Energy Research 
Consulting, and also served as a Fellow at the Department of 
Energy.
    Philip Rossetti is the Senior Fellow for Energy and 
Environment at the R Street Institute, where he conducts 
research on energy, climate, and environmental policy. Mr. 
Rossetti previously served as a Fellow on the minority staff of 
our committee, so welcome back to him.
    Josh Nassar is the Legislative Director of the 
International Union of United Automobile, Aerospace, and 
Agriculture Implement Workers of the UAW. He leads the team 
responsible for implementing the union's policy agenda as well 
as designing legislative strategy on labor, trade, environment, 
and healthcare, defense, energy, tax, and other issues. 
Welcome.
    And finally, Samantha Sloan of First Solar was one of our 
scheduled witnesses. She was not able to join us in person 
today due to a family emergency. So we are sorry to miss her, 
but I ask unanimous consent that Ms. Sloan's testimony be added 
to the hearing record.
    And hearing no objection, so ordered.
    [The statement of Ms. Sloan follows:]

                      Testimony of Samantha Sloan

      Vice President, Global Policy, Sustainability, and Marketing

                           First Solar, Inc.

        Before the House Select Committee on the Climate Crisis

  Hearing on ``A Big Climate Deal: Lowering Costs, Creating Jobs, and 
         Reducing Pollution with the Inflation Reduction Act''

                           29 September 2022

    Good afternoon Chair Castor, Ranking Member Graves, and 
distinguished members of the Committee. My name is Samantha Sloan, and 
I am the Vice President of Global Policy at First Solar, America's 
leading solar technology company. I have been at First Solar for 13 
years.
    Founded in Ohio in 1999, we operate the largest solar manufacturing 
footprint in the Western Hemisphere, with two existing factories in 
Ohio, a third factory scheduled to come online in the state next year, 
and a fourth planned in the U.S. Southeast by 2025. First Solar is 
proud to be America's solar company: U.S.-headquartered and making 
solar panels in America, using American content.
    I am honored to represent First Solar today and would like to thank 
the Committee for convening this hearing on the intersection between 
economic growth, industrial strategy, and fighting climate change. I 
would like to begin by adding context that, in our opinion, is crucial 
not just for this discussion today but also for understanding the 
current state of solar manufacturing in the United States.
    Today, control of the global solar supply chain is concentrated in 
one country, China. By all accounts, China has bought this dominance 
through unfair and illegal subsidies and anti-competitive practices 
that have decimated American solar manufacturing. While solar panels 
were invented here, it is an unfortunate fact that today, First Solar 
is unique among the world's ten largest solar manufacturers: We are the 
only company of the ten headquartered in the United States, and the 
only company of those ten that does not engage in any manufacturing 
activity in China.
    Viewed through this lens, the Inflation Reduction Act (IRA) of 2022 
delivers a powerful legislative counterpunch, creating America's first 
durable solar industrial strategy and an opportunity to dismantle 
China's dominance of solar manufacturing value chains. Doing so creates 
a viable pathway to the secure supply of critical clean energy 
technologies, enabling the fight against climate change and capturing 
value for our economy.
    It is difficult to overstate the economic value that the IRA will 
deliver. Solar is the lowest cost form of new electricity generation 
capacity, with system prices falling an average of 15% per year over 
the past decade. The energy transition is well on its way here at home. 
However, according to National Renewable Energy Laboratory data, less 
than a third of the almost 24 gigawatts of new solar panels installed 
in 2021 were produced in the United States.
    Quite simply, incenting the creation of domestic solar supply 
chains allows the United States to harness this opportunity. When a 
greater percentage of solar panels installed in America are 
competitively made in America, we ensure that the benefits of 
investment, economic growth, and job creation are retained here at home 
rather than exported to China.
    Our own experience, which will span about $4 billion in U.S. 
manufacturing investment since 1999 (excluding our overseas 
manufacturing investments), has shown that:

    1.  American solar manufacturing is competitive. Our newest factory 
in Ohio is expected to establish a highly efficient manufacturing 
template for our next generation technology, delivering higher 
efficiency and wattage solar panels, while lowering costs on a 
delivered basis.
    2.  American solar manufacturing creates steady, good-paying jobs. 
We expect to have more than 3,000 employees on our payroll by 2025, 
making us the largest employer in the sector. Our average manufacturing 
salary is $65,000, and every one of our workers has access to 
comprehensive benefits, including healthcare. In addition to the direct 
jobs we create, it is estimated that we will support approximately 
15,000 indirect jobs by 2025.\1\
---------------------------------------------------------------------------
    \1\ Assuming five workers added in the overall U.S. economy for 
every one manufacturing job (Source: National Association of 
Manufacturers (NAM), using 2020 IMPLAN data).
---------------------------------------------------------------------------
    3.  American solar manufacturing delivers economic benefits. Our 
next generation solar panel, which will roll off our production lines 
in 2023, will use an estimated 90% American content, including glass 
and steel, which has already led to supply chain investments in the 
state. As we grow, our supply chain must grow with us, and it is 
estimated that our recently announced $1.2 billion expansion plan will 
add $3.2 billion to the U.S. economy.\2\
---------------------------------------------------------------------------
    \2\ Assuming economic impact multiplier of $2.68 per $1.00 spent on 
manufacturing (Source: NAM, using 2020 IMPLAN data).

    Moreover, the IRA amplifies the benefits of solar manufacturing by 
providing the scaffolding for the entire industry to grow, and we 
expect to start seeing other investments in the United States across 
the clean energy value chain, including critical minerals, allowing the 
United States to capture further value.
    I will conclude by bringing my testimony back to the primary 
purpose of this House Select Committee: the climate crisis. Crystalline 
silicon, the solar semiconductor primarily produced by China, is 
heavily dependent on coal power, and its producers are accused of using 
forced labor. The fact is that deploying PV systems using carbon-
intensive solar panels from China would result in significant carbon 
dioxide-equivalent emissions.
    Just because the smokestacks are not visible from here in 
Washington, DC does not mean that they are not harming the planet. By 
encouraging manufacturing here at home, the IRA helps ensure that our 
transition to a sustainable energy future is fair to all and enhances, 
not damages, the global fight against climate change while allowing the 
United States to capture economic value in the process.
    First Solar is pleased to be here today to participate in these 
discussions. We are proud of our U.S. manufacturing capabilities and 
our past, current and future contributions to the U.S. economy, and we 
and believe that the IRA will significantly advance efforts to grow our 
country's economy, create jobs in America and combat the climate 
crisis. I would be happy to answer any questions you may have. Thank 
you.

    Ms. Castor. So, without objection, the witnesses' written 
testimony will be made part of this record.
    And, with that, Dr. Warren, you are recognized for 5 
minutes to present your testimony. Welcome.

       STATEMENTS OF DR. QUINTA WARREN, ASSOCIATE DIREC- 
        TOR OF SUSTAINABILITY POLICY, CONSUMER REPORTS; 
 PHILIP ROSSETTI, SENIOR FELLOW FOR ENERGY AND ENVIRONMENT, R 
   STREET INSTITUTE; AND JOSH NASSAR, LEGISLATIVE DIRECTOR, 
     INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE AND 
         AGRICULTURE IMPLEMENT WORKERS OF AMERICA (UAW)

                 STATEMENT OF DR. QUINTA WARREN

    Dr. Warren. My name is Dr. Quinta Warren, and I am the 
Associate Director of Sustainability Policy at Consumer 
Reports. Thank you, Chair Castor, Ranking Member Graves, and 
members of the Select Committee on the Climate Crisis, for 
inviting Consumer Reports to testify today.
    Consumer Reports is supportive of the Inflation Reduction 
Act because it helps more consumers than any vehicle tax credit 
in history, saving them fueling and energy costs, reducing 
public and consumer costs tied to air pollution and greenhouse 
gas emissions, and ensuring overburdened communities can have 
access to clean technologies.
    Consumer Reports is a nonprofit, nonpartisan organization 
founded in 1936. Our mission is to help create a fair, safe, 
and just marketplace for all consumers. We test and rate 
thousands of products and services, and we advocate for 
consumer laws and policies.
    One of the things that Consumer Reports is best known for 
is testing cars. Every year, our testers drive about a half a 
million miles to put new cars through their paces, and we work 
with policymakers like you to advance policies for safer and 
cleaner cars.
    Our analysis show that consumers can save a lot of money by 
using cleaner technology, and our surveys and analyses also 
show that the majority of consumers want them, but there are 
barriers preventing them from purchasing and owning these 
technologies.
    Early this year, we conducted our largest ever nationally 
representative consumer survey on better electric vehicles and 
low carbon fuels. We found that 71 percent of Americans 
expressed some level of interest in buying or leasing an 
electric vehicle, or EV. Within that, 14 percent would 
definitely buy or lease an EV today. That is more than triple 
the number from 2020. And this strong interest crosses racial 
and ethnic groups where people see EVs as saving money on fuel 
and maintenance costs. And they are right.
    Our own analysis shows that owning and maintaining an EV 
saves $6,000 to $10,000 over the life of the vehicle, compared 
to a comparable gas car. But there are still barriers standing 
in their way, including costs associated with buying an EV.
    The IRA helps tackle this barrier through purchase 
incentives for both new and used EVs. The expanded tax credits 
in the IRA directly address the upfront cost problem, 
encouraging every car company to offer more EV models and 
giving consumers expanded clean vehicle options for decades to 
come.
    Just as important is the used EV tax credit that will 
directly help the overwhelming majority of consumers who buy 
their cars used. This credit will be especially helpful for 
low-income communities which are disproportionately impacted by 
air pollution and climate change, and are often frozen out of 
the new car market due in large part to redlining and other 
discriminatory policies.
    Having EV tax credits go directly to dealerships will 
ensure greater accessibility to the tax credit for low-income 
consumers who did not have the tax liability to benefit from 
the entirety of the tax credit themselves.
    EVs are a fantastic money-saving technology, but our 
economy will also need other ways to cut greenhouse gas 
emissions from vehicles. For example, two-thirds of Americans 
would fill up their tanks on liquid low carbon fuels made from 
sustainable biomass, for example, if they did not have to shift 
the kind of vehicle they used and it did not have an additional 
cost. And 62 percent would be likely to choose a flight that 
ran on a similar fuel, assuming there is no cost premium.
    The vehicle purchase incentives in the IRA for fuel cell 
vehicles and tax credits for sustainable aviation fuel will go 
a long way to ensure that consumers have options for low carbon 
fuel vehicles, as will the research funds for analysis of the 
impacts of fuel on the environment and public health.
    Of course, the IRA also delivers more money-saving benefits 
for American homes, especially for low-income households which 
spend a larger share of their income on energy costs.
    In summary, cleaner technologies save consumers money on 
fuel and electricity and maintenance costs. However, upfront 
purchase costs prevent consumers from buying and owning these 
technologies. We applaud the Inflation Reduction Act as the 
incentives therein will help to ensure that consumers can save 
money and cut down on the many costs tied to air pollution and 
greenhouse gas emissions. And this is particularly important 
for low-income consumers who have too often been left out of 
the transition to cleaner and more money-saving technologies.
    Thank you for the opportunity to speak.
    [The statement of Dr. Warren follows:]

                   Testimony of Quinta Warren, Ph.D.

               Associate Director, Sustainability Policy

                            Consumer Reports

           Before the United States House of Representatives 
                 Select Committee on the Climate Crisis

  Hearing on ``A Big Climate Deal: Lowering Costs, Creating Jobs, and 
         Reducing Pollution with the Inflation Reduction Act''

                           September 29, 2022

    Thank you Chair Castor, Ranking Member Graves and members of the 
Select Committee on the Climate Crisis for inviting Consumer Reports 
(CR) to testify on the benefits that the Inflation Reduction Act (IRA) 
will bring to consumers across the country.
    The IRA is a landmark piece of climate legislation that will bring 
cleaner, cost-saving technologies to all consumers. This legislation 
has the potential to give more Americans access to clean vehicles and 
more energy efficient homes.
    This transition to cleaner technologies is a win-win: it will help 
consumers save money on fuel and electricity costs while also reducing 
consumer and public spending on healthcare tied to air pollution, 
particularly in overburdened communities.
Introduction
    CR is an independent, nonprofit and nonpartisan organization that 
works with consumers to create a fair and just marketplace. Known for 
its rigorous product testing and ratings, CR also advocates for laws 
and corporate practices that are beneficial for consumers. We survey 
millions of Americans every year, report extensively on the challenges 
and opportunities facing today's consumers, and provide 
ad-free content and tools to 6 million members across the United 
States. CR is dedicated to amplifying the voices of consumers to 
promote safety, digital rights, financial fairness, and sustainability.
    Surveys and analyses conducted by CR show that consumers care about 
the environment and want access to cleaner and less polluting 
technology, but there are barriers such as cost preventing them from 
purchasing and owning these technologies.
    Air pollution and greenhouse gas (GHG) emissions have adverse 
impacts on the health of consumers, the environment, and climate. These 
impacts can show up in various ways that will increase costs for 
consumers, not only for fuel and energy use, but for other consumer 
costs, such as healthcare and insurance. Providing consumers with 
cleaner and more energy efficient technologies can dramatically lower 
these costs, and presents them with the ability to make purchasing 
decisions that save them money. GHG emissions are contributing to 
extreme weather events such as extreme heat, flooding, and drought. 
Criteria pollutants such as ozone and particulate matter cause health 
issues such as respiratory diseases, lung cancer, pre-term births, and 
neurological damage.\1,2\ Introducing EVs and other low carbon fuel 
vehicles into California's market has saved the state $1.84 million in 
public health impacts, and helped to avoid more than 200 premature 
deaths due to reduced toxic air pollution from vehicles.\3\ These 
issues affect overburdened communities such as communities of color 
most due to redlining and other discriminatory policies.
---------------------------------------------------------------------------
    \1\ Air Pollution: Everything You Need to Know, NRDC, 2021, https:/
/www.nrdc.org/stories/air-pollution-everything-you-need-know
    \2\ Traffic-Related Air Pollution: A Critical Review of 
the Literature on Emissions, Exposure, and Health Effects, Health 
Effects Institute, 2010, https://www.healtheffects.org/publication/
traffic-related-air-pollution-critical-review-literature-emissions-
exposure-and-health
    \3\ California's Low Carbon Fuel Standard, California Delivers, 
2018, http://www.cadelivers.org/low-carbon-fuel-standard/
#::text=California%27s%20Low%20Carbon%20Fuel%20Standard&text=In 
%202018%2C%20the%20California%20Air,groundbreaking%20climate%20policy%2C
%20SB %2032
---------------------------------------------------------------------------
    In order to reduce emissions, we must bring clean technologies, 
such as electric vehicles (EV) and energy efficient appliances, to 
market at a scale that can help establish their widespread adoption. By 
increasing the scale at which these technologies are available in the 
marketplace, we will see greater options for consumers, driving 
competition, reducing costs, and increasing consumer savings. By giving 
consumers incentives to adopt newer, cleaner, cost-saving technologies, 
we empower them to make decisions that will benefit their wallets and 
support a lifestyle with fewer emissions.

    1. Consumers and the Environment

    Consumers are making an active shift to support and adopt clean 
technologies.\4\ According to a 2022 nationally representative CR 
survey on consumer attitudes regarding the transportation industry's 
impact on the environment and consumers' willingness to make 
environmentally-friendly decisions, over 70% of consumers in the United 
States find the issue of climate change to be an ``important'' or 
``very important'' issue, and 61% of Americans say impact on the 
environment is important when considering buying or leasing a 
vehicle.\5\
---------------------------------------------------------------------------
    \4\ Shifting sands: How consumer behaviour is embracing 
sustainability, Deloitte
---------------------------------------------------------------------------
https://www2.deloitte.com/ch/en/pages/consumer-business/articles/
shifting-sands-sustainable-consumer.html
---------------------------------------------------------------------------
    \5\ January/February 2022 Consumer Reports nationally 
representative Battery Electric Vehicle and Low Carbon Fuels Survey of 
8,027 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_ Breakthrough_Energy_18_February_2022) and full report 
here
(https://article.images.consumerreports.org/image/upload/v1657127210/
prod/content/dam/CRO-Images-2022/Cars/07July/
2022_Consumer_Reports_BEV_and_LCF_Survey_Report.pdf).
    Similarly, a 2022 nationally representative CR survey of more than 
two thousand Americans shows that 55% of Americans who purchased large 
appliances in the last five years say that environmental concerns were 
``extremely'' or ``very'' important to them when they purchased those 
appliances.\6\
---------------------------------------------------------------------------
    \6\ March 2022 Consumer Reports nationally representative Home 
Sustainability Survey of 2,240 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_Home_ Sustainability_March_2022).
    The incentives in the IRA will help to ensure that all consumers 
gain the cost-saving benefits of EVs and energy efficient appliances, 
especially low-income and overburdened communities, which have 
historically borne the brunt of air pollution and GHG emissions.

Provisions for Low and Zero-Emission Vehicles

    Transportation accounts for 27% of total U.S. GHG emissions, the 
largest of any sector.\7\ Transitioning to EVs and other Zero-Emission 
Vehicles (ZEV) is an obvious strategy to achieve significant emissions 
reductions in this high-emitting sector.
---------------------------------------------------------------------------
    \7\ Sources of Greenhouse Gas Emissions, EPA https://www.epa.gov/
ghgemissions/sources-greenhouse-gas-emissions

---------------------------------------------------------------------------
    1. Battery Electric Vehicles

    In January and February 2022, CR conducted a nationally 
representative survey on consumer perceptions and awareness of battery 
electric vehicles (BEV) and low carbon fuels.\8\ The survey found that 
71% of Americans express some level of interest in buying or leasing an 
electric-only vehicle. Within that 71%, we found that 14% of American 
drivers would ``definitely'' buy or lease an EV today. That is up from 
just 4% who said the same thing in a 2020 CR nationally representative 
survey of 3,392 licensed drivers.\9\ The 2022 survey also showed that 
other racial and ethnic groups showed a similar level of interest in 
EVs as whites.\10\
---------------------------------------------------------------------------
    \8\ January/February 2022 Consumer Reports nationally 
representative Battery Electric Vehicle and Low Carbon Fuels Survey of 
8,027 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_ Breakthrough_Energy_18_February_2022) and full report 
here
(https://article.images.consumerreports.org/image/upload/v1657127210/
prod/content/dam/CRO-Images-2022/Cars/07July/
2022_Consumer_Reports_BEV_and_LCF_Survey_Report.pdf).
---------------------------------------------------------------------------
    \9\ July/August 2020 Consumer Reports nationally representative 
Fuel Economy and Electric Vehicles Survey; Electric Vehicles section 
showed to 3,392 US adults with valid driver's licenses. View topline 
results here (https://article.images.consumerreports.org/prod/content/
dam/surveys/
Consumer_Reports_Electric_Vehicles_Fuel_Economy_National_August_2020) 
and full report here (https://advocacy.consumerreports.org/wp-content/
uploads/2020/12/CR-National-EV-Survey-December-2020-2.pdf).
    \10\ Across Racial Demographics, Interest in Purchasing Electric 
Vehicles is Considerable, but Systemic Barriers Persist, Consumer 
Reports, EVNoire, GreenLatinos, and the Union of Concerned Scientists, 
2022, https://advocacy.consumerreports.org/press_release/across-racial-
demographics-interest-in-purchasing-electric-vehicles-is-considerable-
but-systemic-barriers-persist/
---------------------------------------------------------------------------
    When we asked consumers why they would consider purchasing an EV, 
the most common answers were saving money on fuel, lower lifetime 
costs, and lower maintenance costs. When we asked consumers who did not 
say they would ``definitely'' buy an EV what would prevent them from 
getting an EV, among the top 3 barriers was the cost associated with 
buying, owning and maintaining an EV.\11\ Our vehicle Total Cost of 
Ownership analysis shows that owning and maintaining an EV is cheaper 
than owning and maintaining a comparable gasoline-powered vehicle, as 
EV owners save $6,000 to $10,000 over the life of the vehicle.\12\
---------------------------------------------------------------------------
    \11\ January/February 2022 Consumer Reports nationally 
representative Battery Electric Vehicle and Low Carbon Fuels Survey of 
8,027 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_ Breakthrough_Energy_18_February_2022) and full report 
here
(https://article.images.consumerreports.org/image/upload/v1657127210/
prod/content/dam/CRO-Images-2022/Cars/07July/
2022_Consumer_Reports_BEV_and_LCF_Survey_Report.pdf).
---------------------------------------------------------------------------
    \12\ New analysis from CR finds that the most popular electric 
vehicles cost less to own than the best-selling gas-powered vehicles in 
their class, Consumer Reports, 2020, https://
---------------------------------------------------------------------------
advocacy.consumerreports.org/press_release/new-analysis-from-cr-finds-
that-the-most-popular-electric-vehicles-cost-less-to-own-than-the-best-
selling-gas-powered-vehicles-in-their-class/
    The purchase incentives in the Inflation Reduction Act can help 
offset the cost of purchasing EVs. The removal of the 200,000-unit 
lifetime EV production cap will give more consumers the ability to 
access EV incentives for the next decade, and encourages manufacturers 
to offer more EV models without being locked out of the incentives. The 
inclusion of income caps and MSRP caps for vehicles will ensure that 
these investments are going to the hands of consumers who will benefit 
from them the most.
    The used EV tax credit will help to ensure a robust secondary EV 
market as 70% of consumers buy their cars on the used car market. This 
credit will be especially helpful for low income communities, which 
traditionally rely on the secondary market for their vehicle purchases. 
The tax credits and investments into commercial EVs will help improve 
air quality in these communities. Provisions in the IRA which allow EV 
tax credits to go directly to dealerships will ensure greater benefit 
from the tax credit for low-income consumers who do not have the tax 
liability to benefit from the entirety of the tax credit. Historically, 
since these tax credits are non-refundable, consumers who do not have a 
tax liability of $7,500 or above would only receive the tax credit to 
match their liability. This shift will enable consumers to see 
immediate savings from the incentive up to the maximum tax credit for 
their vehicle of choice.
    Low-income and disadvantaged communities bear the brunt of the 
emissions associated with e-commerce. A recent CR investigation showed 
the extent of that impact in underserved communities who live near 
ports, last mile shipping facilities, and highly utilized 
transportation corridors, highlighting the need for investments to 
reduce emissions in all facets of the transportation sector. The IRA 
proposes to do this, including through investments in zero-emission 
heavy duty vehicles.\13\
---------------------------------------------------------------------------
    \13\ When Amazon Expands, These Communities Pay the Price, Consumer 
Reports, 2021,
---------------------------------------------------------------------------
https://www.consumerreports.org/corporate-accountability/when-amazon-
expands-these-communities-pay-the-price-a2554249208/

    2. Low Carbon Fuels

    Low carbon fuels (LCFs) are transportation fuels that produce lower 
GHG emissions than traditional fossil fuels. Our BEV/LCF survey found 
that 67% of American consumers would use drop-in LCFs in their vehicle 
if the cost per gallon was the same as the cost for traditional fuels. 
Sixty-two percent (62%) say they are ``very likely'' or ``somewhat 
likely'' to choose a flight on a plane that uses Sustainable Aviation 
Fuels, if the cost of the ticket was the same as flying on a plane that 
uses traditional jet fuel.\14\
---------------------------------------------------------------------------
    \14\ January/February 2022 Consumer Reports nationally 
representative Battery Electric Vehicle and Low Carbon Fuels Survey of 
8,027 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_ Breakthrough_Energy_18_February_2022) and full report 
here
(https://article.images.consumerreports.org/image/upload/v1657127210/
prod/content/dam/CRO-Images-2022/Cars/07July/
2022_Consumer_Reports_BEV_and_LCF_Survey_Report.pdf).
    The vehicle purchase incentives in the IRA for fuel cell vehicles, 
the clean hydrogen credit, tax credits for SAF, and research funds for 
SAF and other biofuels will help increase consumer options for low 
carbon fuel vehicles beyond EVs.

    3. Reducing Emissions Beyond Passenger Vehicles

    The emphasis that the IRA places on adopting electric technology is 
commendable and critical to decarbonizing our country's overall 
footprint. We support these investments to ensure that the United 
States is on a path to zero-emissions, and also acknowledge the IRA's 
investments in other LCFs that will support the decarbonization of 
other transportation sub-sectors that are harder to electrify. The 
emissions associated with the shipment of goods from warehouses to 
doorsteps, from aviation industries, and from maritime industries, 
among others, can be reduced with investments in LCFs.
    The IRA investments into the development of clean hydrogen are 
especially important to shifting to the production of cleaner fuels, 
and will support the development of a market for more fuel-cell 
technology vehicle and infrastructure options. The investments made 
into Sustainable Aviation Fuels (SAF) will support critical 
transformation in one of the more difficult transportation sub-sectors 
to decarbonize, and consumers are prepared to support this technology.
    CR appreciates the IRA funding allocation that will fund research 
into the impacts of biofuels on the environment and on public health. 
These findings will better serve advancements in understanding the 
impacts of different fuel technologies on consumers and the impacts on 
overburdened communities.

Provisions for Home Energy Efficiency and Electrification Upgrades

    The incentives provided by the IRA will reduce purchasing costs for 
cleaner technology, making buying decisions easier for the consumer who 
is looking to transition but is concerned with upfront costs. One of 
our nationally representative surveys showed that cost still proved to 
be the top factor that people who purchased a large appliance in the 
past five years considered in their decision to purchase: when asked 
what the top three most important factors were to them when they made 
the purchase, 73% selected price-almost three times as many as selected 
impact on the environment (24%).\15\
---------------------------------------------------------------------------
    \15\ March 2022 Consumer Reports nationally representative Home 
Sustainability Survey of 2,240 US adults. View topline results here
---------------------------------------------------------------------------
(https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_Home_ Sustainability_March_2022).
    The IRA takes a holistic approach to providing consumers with 
resources to bring cleaner, cost-saving technology throughout their 
homes. From solar tax credits to incentives for the installation of 
electric appliances, this legislation can transform the American 
household as we know it, saving consumers money on energy costs, and 
improving indoor air quality. More energy efficient appliances reduce 
energy use, bringing cost benefits to consumers that can also be 
helpful in easing energy burdens. This is especially critical for low-
income and other disadvantaged households which spend a 
disproportionate amount of their income on energy bills.\16\
---------------------------------------------------------------------------
    \16\ Low-Income Households, Communities of Color Face High ``Energy 
Burden'' Entering Recession, ACEEE, 2020, https://www.aceee.org/press-
release/2020/09/report-low-income-households-communities-color-face-
high-energy-burden
---------------------------------------------------------------------------
    Electric appliances such as heat pumps and electric ranges bring 
considerable benefits to households in both cost savings and a 
reduction in both indoor pollution and GHG emissions. For instance, 
studies show that gas ranges not only release significant amounts of 
unburned methane and NOx while in use, more than 75% of leakage of 
unburned methane occurs when a gas-fueled stove is turned off.\17\ For 
a consumer concerned with these emissions in their home and looking to 
make the switch away from the gas-fueled stove, the IRA can provide 
considerable incentives to reduce the upfront cost of a new electric 
range.
---------------------------------------------------------------------------
    \17\ Methane and NOX Emissions from Natural Gas Stoves, 
Cooktops, and Ovens in Residential Homes, Lebel et al., Environ. Sci. 
Technol. 2022, 56, 4, 2529-2539,
---------------------------------------------------------------------------
https://pubs.acs.org/doi/10.1021/acs.est.1c04707
    As consumers consider transitions to cleaner technology in their 
home to reduce their energy use, there are considerable challenges 
preventing them from making the switch. For consumers living in older 
homes, they may need to undergo a process of retrofitting their homes 
and electrical panels to better accommodate new electric appliances, 
heat pump systems, or even solar panels.\18\ For those looking to make 
changes to their home to improve their energy efficiency and save on 
energy costs, they will likely need to consider weatherizing upgrades 
as well. For these reasons, we applaud the IRA language that will allow 
for a portion of these incentives to be used to support installation 
costs, weatherization upgrades, and electrical panel upgrades.
---------------------------------------------------------------------------
    \18\ Hot, Cold and Clean: Policy Solutions to Promote Equitable and 
Affordable Adoption of Heat Pump Retrofits in Existing Buildings, 
Berkeley Law, UCLA Law, 2022
---------------------------------------------------------------------------
https://law.ucla.edu/sites/default/files/PDFs/Publications/
Emmett%20Institute/Hot-Cold-Clean-Heat-Pump-Retrofit-Report-1.pdf
    These critical provisions will assist in breaking down cost 
barriers for consumers looking to save money, make their homes more 
energy efficient, and reduce emissions tied to home energy use.

Conclusion

    Cleaner technologies save consumers money on fuel and electricity, 
and maintenance costs. However, upfront purchase costs prevent many 
consumers from buying and owning these technologies.
    The incentives in the Inflation Reduction Act will go a long way 
towards helping consumers save money on fuel and electricity costs 
while also reducing consumer and public spending on healthcare tied to 
air pollution, particularly in overburdened communities. In order to 
support the expansion of the clean energy market in a way that reduces 
costs and increases consumer savings, we must continue to support 
investments like the IRA in addition to strong GHG and smog standards 
that encourage manufacturers to increase the supply of cleaner 
technologies. Strong standards and complementary incentives to adopt 
clean technologies are particularly important for low income consumers 
who would otherwise not be able to participate in the transition to 
cleaner technologies.

    Ms. Castor. Thank you very much.
    Next, Mr. Rossetti, you are up. You are recognized for 5 
minutes to present your testimony. Welcome.

                  STATEMENT OF PHILIP ROSSETTI

    Mr. Rossetti. Thank you, Chairwoman Castor, Ranking Member 
Graves, and Honorable members of the committee, for inviting me 
to testify on the Inflation Reduction Act today.
    I want to cover three key points about the Inflation 
Reduction Act. One is the overall potential environmental 
impact of the legislation; two are the barriers to actually 
achieving that outcome; and three is the overall economic 
impact as the incidence of subsidies are going to have to be 
paid for by taxes elsewhere in the economy and what effect this 
might have.
    So overall on the environmental impact, at R Street, we 
took a look at the total estimated costs of the IRA and just 
took an honest value, the CBO's estimate, and said, okay, you 
know, if this is true, how much clean energy can this buy, and 
compare that to the Energy Information Administration's 
projected baseline.
    And looking at that, the sheer volume subsidy, which is 
hundreds of billions of dollars, does result in an increase in 
purchases, and we would expect about a 37 percent increase in 
clean electricity production over the baseline and some modest 
effects in the transportation sector, with overall a potential 
about 12 percent emission reduction relative to 2005 levels, 
which is very consistent with the Rhodium Group that estimate 
about 8 to 12 percent in other studies.
    The caveat to this, though, is the low cost of renewables 
and high investment potential already means that most of this 
technology would have already been deployed, irrespective of 
the IRA.
    So we estimate about 67 percent of the clean electricity 
subsidies will go to clean energy production that would have 
occurred even absent the IRA. Similarly, with the EV tax 
credits, we do see a huge increase in the--or excuse me--we see 
a large amount of the subsidies go to EVs that probably would 
have been deployed anyways. The EIA expects that close to 6 
million new EVs being deployed and the tax credits support 
about 1 million new EVs.
    In this environment, we expect that the additionality of 
these subsidies and the potential environmental benefit is 
mitigated by the fact that most of the money would go to 
efforts that would already occur without the IRA.
    In terms of actually getting to that potential 12 percent 
emission reduction, it is largely locked behind regulatory 
factors. Increasingly, we are hearing from the clean energy 
space that they are facing regulatory barriers rather than cost 
barriers to new deployment. So there is close to a thousand 
gigawatts of low carbon electricity in the interconnection 
queues in the United States right now. The interconnection 
queue timelines have gone from about 2 years to close to 4 
years, and we hear from some developers that can even be about 
8 years in some areas.
    The transmission adequacy is not really good. The 
transmission congestion costs on many of the interconnections 
are increasing, you know, sometimes by multiple times.
    We also have increasing curtailment in the renewable space. 
So a lot of areas are already saturated with new renewables, 
and deploying more renewables means that there is a diminishing 
return.
    So without that increased transmission and availability to 
actually get new clean energy to where it needs to go, you are 
not going to get environmental benefit. And the REPEAT Project, 
which is probably one of the most optimistic estimates of the 
IRA's effects, that estimated that about 80 percent of their 
emission potential is locked behind transmission growth.
    So actually getting to this environmental outcome requires 
structural changes in regulatory policy. Especially on the 
permitting, it has been very interesting. At R Street we looked 
at the DOE and BLM's permitting for clean energy, and we note 
that about 42 percent of DOE's projects were related to clean 
energy, conservation, transmission. Only 15 percent were fossil 
fuel. Similar ratios in BLM.
    And just looking at the Federal Permitting Dashboard today, 
65 percent of the energy projects are renewable projects. So 
addressing these issues are key to clean energy growth and are 
largely absent from the IRA.
    Additionally, it is important to consider the full economic 
impacts of any legislation. Every dollar that is going to be 
spent on subsidy by the U.S. Government is going to result in a 
dollar of tax somewhere else. So who is going to pay that tax 
is largely going to determine the overall economic impact of 
any legislation.
    So when it comes to the IRA, we already know that a huge 
portion of it is going to be from corporate taxes. We also have 
to ask, okay, who is going to be paying those taxes? The CBO 
notes that higher corporate rates are going to overall reduce 
the invest--the incentives to invest in the United States are 
going to have negative economic effects.
    The Tax Foundation similarly, in looking at the IRA, 
estimates about a 0.2 percent lower GDP in the long run and 
lower long run incomes across the board for Americans.
    There are some positive effects of the IRA, namely the 
deficit reduction, and these can offset, to a certain degree, 
the negative impacts of the tax increases. But overall when we 
look at the studies, it generally shows about a wash.
    So, with that, you know, it is important to consider that--
what are we getting, how much is it going to cost, and who is 
going to pay for it.
    And I look forward to your questions. Thank you.
    [The statement of Mr. Rossetti follows:]

                 Submitted Statement of Philip Rossetti

                 Senior Fellow, Energy and Environment

                           R Street Institute

           Before the Select Committee on the Climate Crisis 
                 United States House of Representatives

  Hearing on ``A Big Climate Deal: Lowering Costs, Creating Jobs, and 
         Reducing Pollution with the Inflation Reduction Act''

                           September 29, 2022

    Chairwoman Castor, Ranking Member Graves and honorable members of 
the Committee,
    Thank you for inviting me to testify on the policy effects of the 
Inflation Reduction Act (IRA). My name is Philip Rossetti, and I am a 
senior fellow for Energy and Environment at the R Street Institute. The 
R Street Institute is a nonpartisan, nonprofit think tank that 
emphasizes market-based solutions to policy challenges in the United 
States. My work at R Street specifically focuses on providing policy 
analysis and education around climate change, energy policy, energy 
security and other environmental challenges facing the nation.
    In my testimony on the IRA, I would like to make three key points:

    1.  While we expect the IRA could have a substantial impact on U.S. 
greenhouse gas (GHG) emissions assuming minimal regulatory barriers to 
new clean energy deployment, the already low costs of renewable energy 
means that most of the IRA's subsidies will go to clean energy that 
would have been produced anyway.
    2.  Our own estimates of emission impact from the IRA, as well as 
others, are likely overstating the environmental benefits of additional 
subsidy due to the challenges of modeling permitting and regulatory 
constraints to clean energy growth. Increasingly, research is showing 
these factors play a greater role in clean energy growth than cost 
competitiveness with fossil fuels.
    3.  While government spending stimulates economic activity in 
subsidized sectors, that spending is balanced by higher taxes elsewhere 
in the economy. The expected overall economic effects of the IRA are 
slightly negative, and the legislation is not expected to have any 
improving effect on inflation. While we praise the deficit-reducing 
outcome of the legislation, lawmakers should appreciate that the effect 
of the legislation is to transfer wealth from taxed Americans to 
subsidized energy companies or other subsidy claimants.

Effects of the Inflation Reduction Act on U.S. Greenhouse Gas Emissions

    In our own analyses, we compared the estimated subsidy expenditures 
from the Congressional Budget Office (CBO) with the projected clean 
energy generation and alternative fuel vehicle deployments projected by 
the Energy Information Administration (EIA).\1\ Essentially, we took at 
face value that the CBO's estimated level of subsidy is correct and 
modeled a projection of clean energy growth assuming this as 
representative of the volume of clean energy and alternative fuel 
vehicle deployments through 2031. We then compared this to the 
projected levels in the EIA's 2022 Annual Energy Outlook (AEO) to 
estimate the effect of the IRA.
---------------------------------------------------------------------------
    \1\ Philip Rossetti, ``Potential Effects of the Inflation Reduction 
Act on Greenhouse Gas Emissions,'' R Street Institute, Sept. 27, 2022. 
https://www.rstreet.org/2022/09/27/potential-effects-of-the-inflation-
reduction-act-on-greenhouse-gas-emissions.
---------------------------------------------------------------------------
    We caveat these assessments with the fact that such a methodology, 
which has been similarly employed in other modeling exercises of the 
IRA, assumes that there are minimal barriers to the market entry of new 
resources aside from cost, and further in my testimony I will explain 
the mounting evidence against such an assumption. As such, our 
assessment should be considered highly optimistic as a scenario that 
assumes minimal regulatory barriers to clean anergy and infrastructure 
growth.
    We found that the IRA, at estimated subsidy volumes, could support 
a 37 percent increase in clean electricity generation by the year 2031, 
and transportation-related carbon dioxide emissions could be 5 percent 
lower than the reference case. Overall, energy-related carbon dioxide 
emissions in the United States after the IRA could be up to 35 percent 
below 2005 levels by 2030, whereas the reference case projects 23 
percent below 2005 levels by 2030, for an effect of the IRA of reducing 
energy-related carbon dioxide emissions by up to 12 percent relative to 
2005 levels. This estimate is consistent with similar analyses, such as 
that of the Rhodium Group which estimated the IRA to bring emissions 
down an additional 8-12 percent below 2005 levels by 2030.\2\
---------------------------------------------------------------------------
    \2\ John Larsen et al., ``A Turning Point for US Climate Progress: 
Assessing the Climate and Clean Energy Provisions in the Inflation 
Reduction Act,'' Rhodium Group, Aug. 12, 2022. https://rhg.com/
research/climate-clean-energy-inflation-reduction-act.
---------------------------------------------------------------------------
    The seemingly large effect of the IRA is mostly attributable to the 
sheer volume of subsidy that is directed at clean energy, and 
especially at the electric power sector. The IRA dedicates 
approximately $391 billion of subsidy toward climate and energy related 
priorities.\3\ R Street's estimate of the IRA's impact on electricity 
focused on $179 billion of subsidy. With such significant spending, 
there is certain to be an effect. However, we feel it is important to 
note that we found that 67 percent of new clean electricity generation 
that would be eligible for subsidy under the IRA would have been 
produced even if the IRA had never been signed into law. While the 
large volume of subsidy will incentivize some new market entry, most of 
it will reward clean energy investors for doing what they would have 
done anyway.
---------------------------------------------------------------------------
    \3\ ``CBO Scores IRA with $238 Billion of Deficit Reduction,'' 
Committee for a Responsible Federal Budget, Sept. 7, 2022. https://
www.crfb.org/blogs/cbo-scores-ira-238-billion-deficit-reduction.
---------------------------------------------------------------------------
    In the transportation sector, we note that the additionality of the 
IRA's subsidies is even more diminished. The IRA is estimated by the 
CBO to expend $7.5 billion on tax credits for new alternative fuel 
vehicles. At a tax credit value of $7,500 per vehicle, the IRA would 
support the market entry of one million new clean vehicles through 
2031. However, the EIA projects that through 2031 there will be 9 
million new alternative fuel vehicle sales, including 5.8 million 
electric vehicle (EV) sales.\4\ The large difference between subsidy-
supported vehicle sales and projected vehicle sales indicates that this 
particular government expenditure will have minimal environmental 
benefit.
---------------------------------------------------------------------------
    \4\ Annual Energy Outlook 2022, U.S. Energy Information 
Administration, March 3, 2022, Table 38. https://www.eia.gov/outlooks/
aeo/data/browser/#/?id=48-AEO2022&region=1-
0&cases=ref2022&start=2020&end=2050&f=A&linechart=ref2022-
d011222a.59-48-AEO2022.1-0ref2022-d011222a.62-48-AEO2022.1-0ref2022-
d011222a.63-48-AEO2022.1-0ref2022-d011222a.67-48-AEO2022.1-0ref2022-
d011222a.80-48-AEO2022.1-0↦=ref2022-d011222a.5-48-AEO2022.1-
0&ctype=linechart&sourcekey=0.
---------------------------------------------------------------------------
    The IRA does deliver some improvements to the design of clean 
energy subsidies though. The IRA's eventual transition to technology-
neutral production and investment tax credits and clean fuel tax 
credits that are awarded based on emission ratios will help to mitigate 
the technological favoritism that has plagued clean energy subsidies 
for decades. Additionally, the income thresholds for vehicle subsidies 
will mitigate their regressive nature in the tax code. Overall, the 
IRA's changes that enable the market entry of new clean energy 
technologies on an equal footing to incumbent ones that may already be 
receiving subsidy is praiseworthy.
    But it is important to caveat this acknowledgment with a 
reiteration that the large volume of subsidies directed toward 
environmental benefits that are projected to be attained anyway (clean 
electricity, EVs, etc.) yield no additional emission mitigation despite 
their burden to taxpayers. Continued subsidy of technologically mature 
energy sources, especially ones that are already cost-competitive with 
incumbents, functions as a wealth transfer from taxpayers to energy 
investors.
    It should also be noted that the estimates referenced above are 
based on the CBO's expected changes to revenue from the IRA. If 
alternative claims that the IRA has a greater emission benefit than our 
estimate are true, then one should also expect that there will be more 
claimants to the IRA's subsidy and thus the overall cost of the bill 
will increase and the deficit reducing effects of the legislation would 
be reduced, worsening its net-economic outcomes. Similarly, if--as can 
be contested--our claims are too optimistic, then there would be fewer 
subsidy claimants and the costs of the legislation would be reduced, 
which would improve its deficit-reducing effects and overall economic 
impacts.

Regulatory Barriers to Clean Energy and Other Factors Mitigate 
        Potential Benefits

    A large portion of the IRA's subsidies focus on clean energy 
production, especially electricity. To realize these benefits, 
investors must be able to readily construct new facilities, and in the 
case of electricity interconnect them with the electric power grid. 
However, increasingly, research is showing that regulatory barriers are 
playing a larger factor in clean energy deployment than capital costs, 
which are not readily addressed by subsidies.
    According to Lawrence Berkely National Laboratory (LBL), by the end 
of 2021 there were over 1,000 gigawatts (GW) of energy generation 
capacity in interconnection queues, and 427 GW of storage capacity.\5\ 
Of this, 930 GW was zero-carbon with solar (676 GW) being the largest 
share.\6\ LBL noted that fossil generation seeking grid interconnection 
is on the decline, with 75 GW of natural gas and less than 1 GW of coal 
in interconnection queues. For comparison, the entire existing U.S. 
electric grid has a capacity of 1,144 GW.\7\ LBL also noted that time 
spent in queues for projects has increased from an average of 2.1 years 
to 3.7 years.\8\ The Department of Energy (DOE) notes that the IRA's 
additional subsidy for clean energy deployment will exacerbate 
delays.\9\
---------------------------------------------------------------------------
    \5\ ``Queued Up: Characteristics of Power Plants Seeking 
Transmission Interconnection,'' Lawrence Berkely National Laboratory, 
April 2022. https://emp.lbl.gov/queues.
    \6\ Ibid.
    \7\ ``Electricity Explained: Electricity generation, capacity, and 
sales in the United States,'' U.S. Energy Information Administration, 
last updated July 15, 2022.
---------------------------------------------------------------------------
https://www.eia.gov/energyexplained/electricity/electricity-in-the-us-
generation-capacity-and-sales.php.
---------------------------------------------------------------------------
    \8\ ``Queued Up.'' https://emp.lbl.gov/sites/default/files/
queued_up_2021_04-13-2022.pdf.
    \9\ ``DOE Launches New Initiative to Improve Clean Energy 
Interconnection,'' Department of Energy, Aug. 15, 2022. https://
www.energy.gov/eere/wind/articles/doe-launches-new-initiative-improve-
clean-energy-interconnection.
---------------------------------------------------------------------------
    Prior to the IRA, the largest wholesale electricity market 
operator, PJM, planned to delay interconnection reviews for 
applications filed in 2021 until 2026.\10\ The other major grid 
operators face huge backlogs as well, and renewables developers report 
project development timelines ballooning to eight years.\11\ This casts 
serious doubt on the additional deployment effects the IRA could have 
under current conditions.
---------------------------------------------------------------------------
    \10\ Ethan Howland, ``PJM proposes `first-ready, first-served' 
interconnection review process, steps to clear backlog,'' UtilityDive, 
June 15, 2022.
---------------------------------------------------------------------------
https://www.utilitydive.com/news/pjm-interconnection-request-FERC-
proposal/625544/
#::text=Dive%20Brief%3A,the%20Federal%20Energy%20Regulatory%20Commissio
n.
---------------------------------------------------------------------------
    \11\ Emma Penrod, ``Why the energy transition broke the U.S. 
interconnection system,'' UtilityDive, Aug. 22, 2022.
---------------------------------------------------------------------------
https://www.utilitydive.com/news/energy-transition-interconnection-
reform-ferc-qcells/628822/.
    Aside from grid interconnection, conventional permitting issues are 
increasingly playing a larger role for clean energy-related projects 
than they are for fossil ones. Last year, an R Street report noted that 
the median timelines for environmental impact statements under the 
National Environmental Policy Act (NEPA) have increased from 2.3 years 
in 2010 to 3.5 years by 2019 and peaked at 4.7 years in 2016.\12\ R 
Street also noted last year that for projects requiring either an 
environmental assessment or an environmental impact statement under the 
DOE, 42 percent were related to clean energy, conservation, or 
transmission and 15 percent were related to fossil fuel.\13\ Similarly, 
24 percent of the Bureau of Land Management's (BLM) active 
environmental impact statements were for renewable energy and only 13 
percent were for fossil fuels.\14\ Additionally, BLM data shows that 
only 0.3 percent of oil and gas projects required an environmental 
impact statement, but 12 percent of renewable projects did.\15\ More 
recently, an R Street assessment of the projects listed in the Federal 
Permitting Dashboard noted that 65 percent of the energy-related 
projects were for renewable energy and 16 percent were for electricity 
transmission projects which are needed for clean energy growth, while 
only 19 percent of projects were fossil fuel related.\16\
---------------------------------------------------------------------------
    \12\ Philip Rossetti, ``Addressing NEPA-Related Infrastructure 
Delays,'' R Street Institute, July, 2021. https://www.rstreet.org/wp-
content/uploads/2021/07/FINAL_RSTREET234.pdf.
    \13\ Ibid.
    \14\ Philip Rossetti, ``The Environmental Case for Improving 
NEPA,'' R Street Institute, July 7, 2021. https://www.rstreet.org/2021/
07/07/the-environmental-case-for-improving-nepa.
    \15\ Ibid.
    \16\ Philip Rossetti, ``Permitting reform is key for renewable 
energy, transmission and LNG exports,'' R Street Institute, Sept. 20, 
2022. https://www.rstreet.org/2022/09/20/permitting-reform-is-key-for-
renewable-energy-transmission-and-lng-exports.
---------------------------------------------------------------------------
    Overall, the data increasingly shows that renewable energy projects 
get caught up in red tape even more frequently than fossil fuel ones. 
There is increasing recognition that interconnection and permitting 
reform is needed for clean energy growth, and Sen. Brian Schatz (D-
Hawaii) noted in a tweet that, ``The environmental movement of the last 
generation was partly organized around stopping things. But to save the 
planet we are going to have to build things at unprecedented speed and 
scale.'' \17\
---------------------------------------------------------------------------
    \17\ Brian Schatz @brianschatz, ``The environmental movement of the 
last generation was partly organized around stopping things. But to 
save the planet we are going to have to build things at an 
unprecedented speed and scale. We need to make it easier, not harder, 
to build big, planet saving projects.'' April 30, 2022. 2:22 PM. Tweet.
---------------------------------------------------------------------------
https://twitter.com/brianschatz/status/1520468607293030400?lang=en.
    As the IRA was passed as a budget reconciliation effort, its 
provisions were constrained to budgetarily related policies. As such, 
permitting reforms outside of additional funding are not present in the 
IRA, and, overall, this blunts the level of impact that the IRA can 
have for clean energy deployment.
    As noted above, R Street's own estimate of the IRA's potential 
climate impact, and others, presume environmental benefits are attained 
because capital is deployed to facilities that are built and utilized. 
These assumptions, though, are likely far too optimistic given current 
evidence of clean energy interconnection timelines, minimizing the 
likelihood that the potential climate benefits of the IRA will be fully 
realized, or even mostly realized. Perhaps the most optimistic 
assessment of the IRA was Princeton University's REPEAT Project, but 
that study caveated that 80 percent of their emission benefits would be 
unrealized without transmission growth.\18\ Given the regulatory 
barriers to clean energy growth, it would have been more prudent for 
Congress to pursue either a bipartisan clean energy package that 
includes permitting reform or to have passed legislation on energy 
permitting before allocating substantial subsidies towards clean energy 
priorities.
---------------------------------------------------------------------------
    \18\ Jesse Jenkins @JesseJenkins, ``2. Over 80% of the potential 
emissions reductions delivered by IRA in 2030 are lost if transmission 
expansion is constrained to 1%/year, and roughly 25% are lost if growth 
is limited to 1.5%/year,'' Sept. 22, 2022. 1:18 PM. Tweet.
---------------------------------------------------------------------------
https://twitter.com/JesseJenkins/status/1572998749131264000.
    In addition to overcoming massive regulatory barriers to new 
project development, integrating higher levels of renewables face 
growing economic headwinds and yields diminishing emissions 
displacement. The geographic profile of renewables create congestion on 
the transmission system, inhibiting the ability to transport the energy 
to areas of high demand or greater emissions displacement. In other 
words, the most profitable opportunities for clean energy have been 
claimed first, and parts of the grid are becoming saturated with 
renewables.\19\ This is inducing a sharp uptick in transmission 
congestion and renewables curtailments. For example, from 2019 to 2021, 
renewables curtailment in Texas tripled; wind curtailment in the Great 
Plains increased fivefold; and curtailment increased in other 
renewables-rich areas like California and the Midwest.\20\ From 2019 to 
2021, transmission congestion costs have increased by between 8 and 
1,173 percent across the seven organized wholesale electricity markets, 
which incorporate most of the country.\21\
---------------------------------------------------------------------------
    \19\ Devin Hartman, ``Liberty never looked so green: Policy 
implications of private carbon-free energy commitments,'' UtilityDive, 
Aug. 17, 2022. https://www.utilitydive.com/news/liberty-never-looked-
so-green-policy-implications-of-private-carbon-free-e/629625.
    \20\ Adam Wilson, ``As IRA drives renewables investment, attention 
turns to transmission upgrades,'' S&P Capital IQ, Sept. 21, 2022.
---------------------------------------------------------------------------
https://www.capitaliq.spglobal.com/web/client?auth=inherit#news/
article?id=72172110&KeyProductLink Type=6.
---------------------------------------------------------------------------
    \21\ Ibid.
---------------------------------------------------------------------------
    In short, energy policy analysts are increasingly concerned that 
clean energy and the transmission needed to support it cannot readily 
be built, and the IRA's budget reconciliation-oriented design means 
that it will exacerbate rather than mitigate these trends, independent 
of other policy changes.

Economic Effects of the IRA Involve Tradeoffs

    The IRA's provisions are expected to increase federal savings and 
revenue by $738 billion, while at the same time expending $499 billion, 
resulting in a net revenue increase of $238 billion.\22\ The revenue 
raising provisions of the IRA primarily come from changes to corporate 
taxes, specifically the implementation of a new corporate minimum tax. 
Whenever the government spends money, the recipients of that subsidy 
are beneficiaries. For this reason, it is common for industry-specific 
analysis to claim substantial economic benefits from legislation. 
However, equally important is the other side of the equation, which is 
how the government either is raising or will raise funds to pay for 
that subsidy, which in this case will partially come from corporate 
taxes and other tax increases.
---------------------------------------------------------------------------
    \22\ ``CBO Scores IRA with $238 Billion of Deficit Reduction,'' 
Committee for a Responsible Federal Budget, Sept. 7, 2022. https://
www.crfb.org/blogs/cbo-scores-ira-238-billion-deficit-reduction.
---------------------------------------------------------------------------
    The clean energy industries that are on the receiving end of 
hundreds of billions of dollars of subsidies, as well as workers in 
those industries, will be beneficiaries of the IRA. But there is also 
the question of whether there will be harm caused to Americans outside 
of the subsidized industries through changes in the corporate tax 
structure. Despite the name of the policy, corporations do not pay 
taxes; ultimately it is people who pay taxes, and the burdens of 
corporate taxes fall among corporate investors, workers and customers 
to varying degrees depending on the prevailing economic conditions at 
the time.\23\ Who bears corporate taxes is largely dictated by the 
openness of the economy to global competition, and empirical estimates 
of corporate tax incidence have found that between 50 and 100 percent 
of corporate income taxes fall on corporate workers.\24\ Even corporate 
taxes on ``super-normal'' returns, like the corporate minimum tax in 
the IRA, are estimated to have half their costs fall on corporate 
workers.\25\
---------------------------------------------------------------------------
    \23\ Greg Mankiw, ``Corporate Tax Rates,'' Greg Mankiw's Blog, May 
3, 2006.
---------------------------------------------------------------------------
https://gregmankiw.blogspot.com/2006/05/corporate-tax-rates.html.
---------------------------------------------------------------------------
    \24\ Stephen J. Entin, ``Labor Bears Much of the Cost of the 
Corporate Tax,'' Tax Foundation, Oct. 24, 2017. https://
taxfoundation.org/labor-bears-corporate-tax.
    \25\ Ibid.
---------------------------------------------------------------------------
    My testimony today will not cover the literature or state of debate 
on corporate taxes in tax policy, but I do wish to draw attention to 
several key findings from modeling exercises of the IRA. Firstly, the 
CBO in its assessment of the IRA noted that the higher corporate taxes 
will negatively impact the U.S. economy:

        In CBO's assessment, the proposed new corporate minimum tax 
        would reduce the incentive for those large corporations to 
        invest, primarily by limiting the tax benefit of accelerated 
        depreciation and by decreasing the 
        after-tax return on their new investment . . . By setting a new 
        minimum tax, section 10101 would limit the tax benefit of 
        accelerated depreciation for affected corporations and, all 
        else being equal, reduce their business investment.\26\
---------------------------------------------------------------------------
    \26\ Phillip L. Swagel, ``Economic Analysis of Budget 
Reconciliation Legislation,'' Congressional Budget Office, Aug. 4, 
2022. https://www.cbo.gov/system/files/2022-08/58357-Graham.pdf.

    The CBO noted that reduced deficits could offset the negative 
effect of the changes in corporate taxes but stated that achieving as 
much depends on various factors. Additionally, the Joint Committee on 
Taxation (JCT), in estimating who will bear the costs of the IRA's tax 
increases, noted that the distributional changes are most prominent at 
the top and bottom income ranges. Americans earning less than $10,000 
per year are expected to have a 3.1 percent increase in federal taxes 
in 2023, and a 1.8 percent increase in 2031.\27\ Americans earning more 
than $1 million per year are expected to have 1.9 percent higher taxes 
in 2023, and 0.1 percent higher taxes in 2031.\28\
---------------------------------------------------------------------------
    \27\ ``Distributional Effects of Title I--Committee on Finance of 
an Amendment in the Nature of a Substitute to H.R. 5376, The Inflation 
Reduction Act of 2022,'' Joint Committee on Taxation, July 29, 2022.
---------------------------------------------------------------------------
https://www.finance.senate.gov/imo/media/doc/
jct_distributional_effects_inflation_reduction_act.pdf.
---------------------------------------------------------------------------
    \28\ Ibid.
---------------------------------------------------------------------------
    The governmental analyses from the CBO and the JCT are also 
consistent with the estimated effects on GDP and income by the Tax 
Foundation. The Tax Foundation estimates that in the long run, the IRA 
will reduce GDP by 0.2 percent, reduce real wages by 0.1 percent and 
reduce capital stock in the economy by 0.3 percent, resulting in a loss 
of 29,000 full-time equivalent jobs overall.\29\ The Tax Foundation 
also finds that although subsidies may buoy incomes in the near term, 
in the long run all income groups have lower income.\30\
---------------------------------------------------------------------------
    \29\ Alex Durante et al., ``Details & Analysis of the Inflation 
Reduction Act Tax Provisions,'' Tax Foundation, Aug. 12, 2022. https://
taxfoundation.org/inflation-reduction-act/.
    \30\ Ibid.
---------------------------------------------------------------------------
    Any impact on inflation, which would potentially improve after-tax 
incomes, is expected to be minimal. The CBO estimated that the IRA will 
have between ^0.1 and +0.1 percent change in inflation next year, which 
is consistent with the Tax Foundation's estimate that the IRA's impact 
on inflation is ``likely close to zero.'' \31\
---------------------------------------------------------------------------
    \31\ Phillip L. Swagel, ``Economic Analysis of Budget 
Reconciliation Legislation,'' Congressional Budget Office, Aug. 4, 
2022. https://www.cbo.gov/system/files/2022-08/58357-Graham.pdf; 
Durante et al. https://taxfoundation.org/inflation-reduction-act.
---------------------------------------------------------------------------
    In effect, the IRA has two sides to its provisions. On the one 
hand, deficit reduction and subsidy yield benefits to select sectors, 
but the method of paying for these creates hardship in other sectors of 
the economy that counteract these benefits. R Street also noted in its 
analysis of the IRA that monetized environmental benefits are unlikely 
to make the IRA net-beneficial, due to its inefficient subsidy 
structure. When considering opportunity costs, the IRA is more likely 
to be a negative event for the U.S. economy than a positive one, but 
overall, the counteracting positive and negative effects of the law 
largely cancel each other out.

Conclusion

    Thank you again Chairwoman Castor, Ranking Member Graves and 
honorable members of the committee for holding this hearing. If I can 
be of any assistance to members of the Committee, please feel free to 
contact me or my colleagues at the R Street Institute.

      Philip Rossetti
      Senior Fellow for Energy & Environment
      R Street Institute
      202.525.5717
      [email protected]

    Ms. Castor. Thank you, Mr. Rossetti.
    Next up, Mr. Nassar, you are recognized for 5 minutes. 
Welcome.

                    STATEMENT OF JOSH NASSAR

    Mr. Nassar. Thank you, Chairwoman Castor, Ranking Member 
Graves, and members of the Select Committee. On behalf of the 1 
million members and retirees of United Auto Workers, our 
President, Ray Curry, the Executive Board, just want to thank 
you for this opportunity to share our views on the Inflation 
Reduction Act and, you know, express what an honor it is to 
talk before this committee today. The work of this committee is 
extremely important, in our view.
    So the Inflation Reduction Act is an unambiguous win for 
working people, in our view, and here is why. Number one, it 
deals with what is actually, you know, putting a pinch on 
people's wallets and pocketbooks, which is--you know. Big thing 
is the high cost of prescription drugs, which in the United 
States is often, you know, four times or more than other 
countries. And remember, as taxpayers, we subsidize a lot of 
the research for pharmaceutical drugs as well.
    But not just that, the energy. By having a diversity of 
sources, you know, it will lead to lower costs for people, you 
know, over time.
    But we--you got to--we look at Inflation Reduction Act in 
tandem with the Bipartisan Infrastructure Law, CHIPS, Recovery 
Act, and it is a very productive Congress. Those are four very 
important laws, and they work together, and I will be happy to, 
you know, get into that more.
    But just a couple things that I just want to make sure to 
set the record straight on. One is, you know, on the taxes. So 
this bill is paid for by having, you know, enforcement on the 
richest folks, IRS. And, you know, it has been estimated over, 
you know, $160 billion a year from the top 1 percent are not 
paid in taxes. So it is really--it is really a focus up there, 
which makes a lot of sense.
    And then the other thing is having this corporate minimum 
tax, which, you know, right now, that will--that by not having 
a minimum, we basically are, you know, creating environment 
where it is--it is--there is a premium for kind of exporting 
jobs, and it actually becomes some incentive. So it actually is 
good for workers.
    And also, just the corporate share of tax receipts has 
dropped precipitously over time, so this kind of makes things a 
little, you know, a little more equal, where they are paying 
their fair share.
    As far as inflation itself, you know, we at Auto Workers, 
you know, have suffered greatly because of, for example, the 
chip shortage. Well, why was there a chip shortage? Because of 
the pandemic.
    The pandemic is the root cause of all the chaos with the 
supply chains and, you know, is really--can be traced back to 
why, you know, a big reason why inflation--but the truth is 
that inflation is for many, many factors. It is not just one 
thing.
    But we know this much. The cost of prescription drugs, the 
cost of energy, are really, you know, hurting people, and this 
directly addresses those major cost factors.
    The other thing I want to talk about is what it does 
actually for manufacturing. We have lacked manufacturing policy 
for a long time in this country. And the truth is that China 
and all those other countries that are deploying EVs, a lot of 
them are really far advanced, and they have been supporting 
those industries and those investments for a long time. So we 
have been competing with one arm tied behind our back.
    And now one might say, well, why should we care? Well, the 
reality is that EVs are here, and they are global, and they are 
going to become a larger percentage.
    So people are going to be driving EVs more over time. The 
question for us is, where are they going to be built? We want 
them to be built in the United States, and we want them to be 
supporting good union jobs. So that is our view on that.
    And what it does is it--between ATVM, the various, you 
know, tax programs that are here, the conversion grants, et 
cetera, what it does is it will enable factories to change over 
to be able to build electric vehicles. It will also allow a lot 
more of the battery supply, the battery manufacturing to be 
here, where we are way behind.
    And we think that the entire supply chain, you know, should 
be in the U.S., that we should have a--we should be able to 
dominate this just like we used to dominate auto manufacturing.
    Now, you know, are they going to be good jobs all created 
from here? That is--that is something that is to be determined 
in auto, because what we have to see is, are workers going to 
have a choice to collectively bargain or not? A lot of 
automakers go through great lengths to fight against workers 
having that choice. So what is going to happen there?
    We are also seeing a lot of companies who are automakers 
teaming up with battery manufacturers and creating joint 
ventures, and, you know, what kind of jobs are those going to 
provide? We think they should be good union auto jobs because 
they are about moving the car forward.
    So, you know, this is--and the other thing I will say is 
just, this will speed up the transition to EVs, and these are 
investments that were badly, badly needed.
    Happy to answer any questions you might have. Thank you.
    [The statement of Mr. Nassar follows:]

                   Submitted Statement of Josh Nassar

               Legislative Director, International Union

                   United Automobile, Aerospace, and 
            Agricultural Implement Workers of America (UAW)

           Before the Select Committee on the Climate Crisis 
                 United States House of Representatives

  Hearing on ``A Big Climate Deal: Lowering Costs, Creating Jobs, and 
         Reducing Pollution with the Inflation Reduction Act''

                           September 29, 2022

    Chairwoman Castor, Ranking Member Graves, and members of the Select 
Committee, on behalf of the over one million active and retired members 
of the International Union, United Automobile, Aerospace, and 
Agricultural Implement Workers of America (UAW), UAW President Ray 
Curry, and the UAW International Executive Board (IEB), I want to thank 
you for the opportunity to share our perspective on the Inflation 
Reduction Act. It is my honor to appear before you today.
    The recent passage of the Inflation Reduction Act is an unambiguous 
win for the American people. The law squarely takes on two of the main 
drivers of inflation: energy costs and astronomical prescription drug 
costs. The law addresses energy costs by investing in a wide variety of 
domestic energy sources of energy production, which is projected to 
reduce carbon emissions by 40 percent by 2030.\1\ It is the single 
biggest investment, $369 billion, to address climate change in our 
history. It will cut household energy costs by an average of $500 a 
year, tackle the climate crisis by significantly reducing carbon 
emissions, and create thousands of good-paying jobs.\2\ Importantly, 
the new law is ``paid for'' by placing a minimum tax on corporations 
and ensuring the wealthiest pay their fair share of taxes.
---------------------------------------------------------------------------
    \1\ https://www.whitehouse.gov/omb/briefing-room/2022/08/23/New-
OMB-Analysis-The-Inflation-Reduction-Act-Will-Significantly-Cut-the-
Social-Costs-of-Climate-Change/
    \2\ https://www.whitehouse.gov/briefing-room/statements-releases/
2022/08/15/by-the-numbers-the-inflation-reduction-act/
---------------------------------------------------------------------------
    The 117th Congress and the Biden Administration have been highly 
productive and have succeeded where prior Administrations and 
Congresses from both parties have fallen short. The American Rescue 
Plan Act (ARPA), Inflation Reduction Act, CHIPS and Science Act, and 
bipartisan Infrastructure Investment and Jobs Act (IIJA) work in tandem 
to strengthen our economy and national security. The laws put our 
country in a position to have a brighter future by investing in our 
manufacturing base that is essential to ensure industries and jobs of 
the future are made in America. These four laws stand to benefit UAW 
members and retirees for decades to come.

Urgency of Climate Change

    A large body of scientific research predicted for decades that 
climate change would increase the number and strength of extreme 
weather and climate events, such as heat waves and droughts. 
Unfortunately, these predictions have already been proven right by 
mother nature. We are witnessing the impacts of climate change in real 
time. Higher water temperatures intensify hurricanes and other extreme 
weather events. Addressing climate change will become increasingly 
difficult as time marches on. The realities of climate change demand 
action. We have a responsibility to current and future generations. The 
Inflation Reduction Act takes critical steps that will be looked kindly 
upon by our children and grandchildren in the decades ahead.
    Before discussing specific provisions, I must address some of the 
misinformation about the Inflation Reduction Act that is being widely 
disseminated by deep pocketed special interests in a clear attempt to 
convince working people they will pay higher taxes because of the law. 
These claims are demonstrably false. No one earning under $400,000 will 
pay more in taxes due to this law.\3\ The tax provisions in this law 
will ensure that some of the largest corporations in the world pay 
their fair share by imposing a 15% minimum corporate tax on 
corporations with profits exceeding $1 billion. The Joint Committee on 
Taxation (JCT) estimates that this provision will generate $222.2 
billion in revenue from FY 2022 through FY 2031.
---------------------------------------------------------------------------
    \3\ https://www.whitehouse.gov/briefing-room/statements-releases/
2022/08/19/fact-sheet-the-inflation-reduction-act-supports-workers-and-
families/
---------------------------------------------------------------------------
    The minimum corporate tax is long overdue. Thirty-nine profitable 
corporations in the S&P 500 or Fortune 500 paid no federal income tax 
from 2018 through 2020, the first three years that the Tax Cuts and 
Jobs Act (TCJA) was in effect.\4\ These same corporations generated 
$122 billion in profits during that period. The corporate share of 
federal tax revenue has dropped by two-thirds in the last 60 years, 
from 32% in 1952 to 10% in 2013.\5\
---------------------------------------------------------------------------
    \4\ https://itep.org/corporate-tax-avoidance-under-the-tax-cuts-
and-jobs-act/
    \5\ https://americansfortaxfairness.org/tax-fairness-briefing-
booklet/fact-sheet-corporate-tax-rates/
#::text=Corporate%20share%20of%20federal%20tax%20revenue%20has%20droppe
d, no%20federal%20income%20taxes%20from%202008%20to%202012.
---------------------------------------------------------------------------
    The Inflation Reduction Act also invests $80 billion in the 
Internal Revenue Service (IRS) to modernize and strengthen enforcement 
to ensure the wealthy are paying their fair share. The law 
substantially increases the budget of the IRS and staffing levels to go 
after ultra-wealthy tax evaders. The richest 1% evade paying $160 
billion in taxes every year.\6\ The Congressional Budget Office (CBO) 
estimates that the IRS will collect about $203.7 billion because of 
improved tax compliance.\7\ Inflammatory rhetoric about armed IRS 
agents going after ordinary Americans is misleading and dangerous.
---------------------------------------------------------------------------
    \6\ https://home.treasury.gov/news/featured-stories/the-case-for-a-
robust-attack-on-the-tax-gap
    \7\ https://www.cbo.gov/system/files/2022-08/hr5376_IR_Act_8-3-
22.pdf
---------------------------------------------------------------------------
    Further, the new law imposes a 1% excise tax on corporate stock 
buybacks to encourage investments to grow the business instead of 
enriching stockholders. The UAW has long supported creating 
disincentives to curb stock buy backs. Taxing stock buybacks will, in 
addition to raising $74 billion over the next ten years, limit 
excessive compensation of corporate insiders and promote sounder 
investment decisions that are more likely to benefit workers and 
communities.\8\
---------------------------------------------------------------------------
    \8\ https://www.washingtonpost.com/us-policy/2022/08/12/inflation-
reduction-act-biden-buybacks/

---------------------------------------------------------------------------
Inflation

    There is a great deal of confusion about the causes of inflation. 
There are no simple answers and inflation is caused by multiple 
factors. The COVID-19 pandemic contributed greatly to the spike in 
global inflation as supply chains have been continuously interrupted 
which limit production and distribution of goods. Just as the COVID-19 
pandemic is a global problem so is inflation, as the Eurozone and other 
countries have recorded their highest inflation rates on record 
ever.\9\
---------------------------------------------------------------------------
    \9\ https://www.reuters.com/world/europe/euro-zone-inflation-
confirmed-91-energy-food-prices-surge-2022-09-16/
---------------------------------------------------------------------------
    Annual U.S. inflation in the first quarter of this year averaged 
just below 8.0%, the 13th-highest rate among the 44 countries examined. 
According to Department of Commerce data, corporate profits rose 35% 
last year.\10\ Chevron's 240% profit spike in early 2022 was part of 
``the best two quarters the company has ever seen.'' \11\ Shell said 
adjusted earnings were $11.5 billion for the second quarter of 2022 and 
topped their previous record of $9.1 billion in the first quarter.\12\
---------------------------------------------------------------------------
    \10\ https://www.bloomberg.com/news/articles/2022-03-30/2021-was-
best-year-for-u-s-corporation-profits-since-1950
    \11\ https://www.theguardian.com/business/2022/apr/27/inflation-
corporate-america-increased-prices-profits
    \12\ https://www.reuters.com/business/energy/shell-reports-record-
profit-115-billion-2022-07-28/
---------------------------------------------------------------------------
    To make matters worse, multinational corporations in many 
industries have capitalized on rising costs to mark up prices to 
increase profits. Over the past several decades the oil, consumer 
goods, beverage industry, pharmaceutical industry, and many other 
sectors have become less competitive. When there are only a few major 
players in an industry, it becomes easier to price gouge consumers.
    In the U.S., the motor vehicle sector has been one of the largest 
contributors to inflation as many Original Equipment Manufacturers 
(OEMs) cannot keep up with demand due to the shortage of auto-grade 
semiconductor chips and other supply shortages. The CHIPS and Science 
Act puts us in a better position to avoid future disruptions but does 
not solve the current shortage as it takes years for new facilities to 
be built and ramped up.

Inflation Reduction Act's Manufacturing Investments

    The Inflation Reduction Act stands to help the U.S. become less 
reliant on China, which dominates the electric vehicle battery market. 
According to the Financial Times, Chinese firms, either owned or 
supported by the Chinese government, currently produce 60% of passenger 
EVs sold around the globe and produce almost 70% of battery cells as 
China has invested more than $60 billion to support EV manufacturing. 
China also controls approximately 80% of the supply of rare earth 
minerals, which are essential for aerospace, defense, and EV 
production, and may impose export controls on these vital 
materials.\13\
---------------------------------------------------------------------------
    \13\ https://www.ft.com/content/d3ed83f4-19bc-4d16-b510-
415749c032c1
---------------------------------------------------------------------------
    The Inflation Reduction Act also includes significant investments 
that stand to benefit workers, their families, and communities 
including:

      Fully funding the Advanced Technology Vehicle 
Manufacturing (ATVM) loan program and expand to additional vehicle 
sectors.

      Domestic Manufacturing Conversion grants will support the 
conversion and retooling of vehicle technology manufacturing 
facilities, including those at risk of closure, to onshore and build 
batteries and other advanced vehicle technologies. Funding, updating, 
and targeting the 48C tax credit is included to support the 
establishment, retooling, and expansion of clean energy and technology 
manufacturing facilities.

      The Investment Tax Credit (ITC) and Production Tax Credit 
(PTC) are big wins for clean energy projects like wind and solar and 
they include a 10% bonus credit for projects located in an energy 
transition community.

      Robust funding is also available for rural renewable 
energy investments through the United States Department of Agriculture 
(USDA) including over $1 billion for the Rural Energy for America 
Program, with prioritization of ``underutilized renewable energy 
technologies'' and technical assistance. Assistance will be provided 
for rural electric co-ops with $9.7 billion in loans and grants for new 
renewable deployment, carbon capture and storage, and fossil fuel 
debts.

      More than $9 billion is included for federal procurement 
of American-made clean technologies to create a stable market for clean 
products, including $3 billion for the U.S. Postal Service to purchase 
zero-emission vehicles.

      Commercial Vehicle Tax Credit and the Heavy-Duty Fleet 
Conversion Grants has $1 billion available in grants to support 
adoption and deployment of vehicles until 2031. $400 million is carved 
out for replacement of vehicles serving one or more communities in non-
attainment areas for any air pollutant.

      $4,000 tax credits for lower/middle income consumers to 
help purchase used electric vehicles (EVs), and up to $7,500 for new 
EVs. The $7,500 tax credit for new clean vehicles requires that final 
assembly of the car be made in North America. The 200,000 cap has been 
lifted beginning in 2023, but Tesla, GM, and Toyota have surpassed the 
200,000-vehicle cap for 2022. Without the Inflation Reduction Act, many 
established automakers would be unable to utilize the tax credit to 
lower the price of the vehicle.

Electric Vehicle Manufacturing

    The global auto market is moving towards even more efficient 
vehicles, including hybrid and electric vehicles. Global electric car 
registrations increased by 41% in 2020, despite the pandemic-related 
worldwide downturn in car sales, in which global car sales dropped 
6%.\14\ It has been projected that by 2040, over 50% of new car sales 
globally will be electric.\15\ The industry is preparing for EVs to be 
a much larger part of the market going forward, both in the U.S. and 
abroad. Major automakers around the world have announced billion-dollar 
EV investments and ambitious new product plans and target dates. The 
Inflation Reduction Act stands to facilitate more manufacturing of 
electric vehicles. Without such incentives we will fall further behind 
China in the race to build the vehicles and batteries of the future.
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    \14\ https://cleanenergynews.ihsmarkit.com/research-analysis/
global-electric-vehicle-sales-grew-41-in-2020-more-growth-
comi.html#::text=Global%20electric%20vehicle%20sales%20grew%20 
41%25%20in%202020%2C,...%205%20Looking%20ahead%20...%206%20Inevitability
%20
    \15\ https://edition.cnn.com/2019/05/15/business/electric-car-
outlook-bloomberg/index.html
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    EV sales have grown steadily over the past decade, but they still 
represent a small percentage of vehicle sales. EVs and PHEVs (Plug-in 
Hybrids) combined to represent 4% of U.S. auto sales in 2021 \16\ and 
EVs face challenges to mass-adoption. EVs are more expensive to 
produce, making them less profitable and dependent on consumer 
incentives. In most parts of the country, EV charging infrastructure is 
inadequate, and the electrical grid is unprepared. Consumers shopping 
for an EV have been known to have concerns about battery range and 
charging speed as they have a limited selection of models and segments. 
Fortunately, the Inflation Reduction Act along with the previously 
mentioned laws contain investments in the infrastructure needed to 
support EV deployment.
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    \16\ https://wardsintelligence.informa.com/WI966151/US-Light-
Vehicle-Sales-December-2021
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    The greener vehicles of the future are going to be built somewhere 
and other countries are preparing for these innovative technologies. We 
could see the U.S. auto industry fall behind on advanced technology, 
hurting the American economy and American workers. Ignoring these 
realities is not an option because it concedes our future to other 
nations that have a significant auto manufacturing footprint.
    To lead the future, electric vehicles and other green technologies 
must be harnessed to create good U.S. union jobs where workers have a 
voice on the job. It is important to ensure all manufacturing workers 
can join a union free from intimidation by employers seeking to 
maintain the status quo. Manufacturers of EVs should be required to pay 
family and community-sustaining wages and provide benefits that workers 
can count on to care for themselves and their loved ones as a condition 
for receiving taxpayer assistance.
    The domestic vehicle assembly and parts industries are vital to our 
manufacturing base, and it is imperative that we stay strong and 
competitive now and into the future. Auto manufacturing is not regional 
and extends well beyond the upper Midwest. For example, in the past 
year, significant investments in motor vehicle and battery 
manufacturing have been announced in Tennessee, Georgia, Michigan, 
North Carolina, and Kentucky. The auto industry's supply chain extends 
far and wide throughout the country. Fortunately, the Inflation 
Reduction Act and other aforementioned laws put us on the right track, 
yet more work remains.
    To be clear, the transition will take time and will occur at 
different rates throughout our country and world. However, there is 
little doubt that the transition will happen. The Administration's goal 
is to have at least 50% of new vehicles be EVs or PHEVs by 2030. They 
announced nearly $5 billion will be made available to build out an 
electric vehicle charging network over the next 5 years and $3 billion 
to advance the domestic EV industry in communities that have 
historically been part of the auto industry.
    As automakers improve technology, decrease battery costs, and 
produce at scale, EVs will become increasingly more competitive with 
ICEs (Internal Combustion Engine). And in the coming years, automakers 
plan to launch EVs in the segments that are most popular with American 
consumers: CUVs, SUVs, and pickups. Electrification is not limited to 
the light-duty auto industry. Companies that produce heavy-duty trucks 
and off-highway vehicles are also investing in future technology for 
electrification and autonomy.
    The U.S. is behind other nations in public and private investments 
needed to make the U.S. a competitive player in vehicle 
electrification. The European Union (EU) has established the European 
Battery Alliance to promote production of batteries and key components 
within the EU.\17\ South Korea is home to LG Chem, the world's largest 
producer of lithium-ion batteries for electric vehicles, with a 24.6% 
market share. The company has plans to triple its battery 
production.\18\
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    \17\ www.eba250.com/about-EBA250?/cn-reloaded=1
    \18\ https://www.autoblog.com/2020/10/21/lg-chem-to-triple-ev-
battery-production/

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Creating and Maintaining Good Auto Jobs

    Over the past several years, U.S. automotive production workers' 
wages have fallen significantly. When adjusting for inflation between 
January 2006 and January 2021, average hourly earnings for production 
workers in auto assembly declined by 21% while wages in the auto parts 
sector have decreased by 19%.\19\
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    \19\ https://www.bls.gov/cew/data.htm
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    For the transition to benefit auto workers, the entire supply 
chain, from the gathering of minerals needed to power batteries to the 
manufacturing of the battery and other parts to final assembly, must 
support the creation and preservation of good union jobs. Of course, it 
is far from certain that growth in EV sales will lead to more good 
union jobs. If new entrants are hostile to unions and provide subpar 
wages and benefits, it will further erode job quality in the industry. 
This is not a theoretical concern as foreign-based automakers typically 
resist efforts to unionize in the United States. This strong opposition 
exists even though every foreign-based light duty Original Equipment 
Manufacturer (OEM) is unionized in its own country. A report by 
Professor Gordon Lafer details the array of tactics foreign-based 
automakers have utilized to prevent unionization.\20\ Professor Lafer's 
research serves as a strong reminder as to why we need the PRO Act to 
become of the land. Congress has not strengthened our nation's labor 
laws in over 85 years.
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    \20\ https://nwlaborpress.org/wp-content/uploads/2022/01/
BuildingBackReport.pdf
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    In the auto industry, Toyota, Nissan, Hyundai, Mercedes-Benz, BMW, 
Volkswagen, and Honda have all hired ``union avoidance'' specialists to 
guide their anti-union campaigns in the United States. Nissan's anti-
union campaign led the National Labor Relations Board (NLRB) to issue a 
formal complaint charging the company with twenty-four counts of 
lawbreaking. The fact Nissan engaged in such tactics so soon after 
having been forced to post public notices vowing to respect the law is 
a testament to the near total absence of meaningful penalties under 
current law. All of Nissan's plants in other countries are 
unionized.\21\ Corporations like Amazon spends millions of dollars to 
hire anti-union consultants to interrogate and intimidate workers when 
they seek union representation.\22\ It has become all too common for 
employers to threaten relocation or shutting down operations if workers 
seek to form a union.
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    \21\ https://nwlaborpress.org/wp-content/uploads/2022/01/
BuildingBackReport.pdf
    \22\ https://www.huffpost.com/entry/amazon-anti-union-
consultants_n_62449258e4b0742dfa5a74fb
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    We must also look at the impact that procurement has on job 
quality. In February 2022, Oshkosh Defense was awarded a contract to 
design and build the next-generation vehicles for the United States 
Postal Service (USPS). Oshkosh Defense is a defense contractor that 
manufactures products for the U.S. military in its unionized plants in 
Oshkosh, Wisconsin. Oshkosh workers have been UAW members since 1938. 
Despite these facts, Oshkosh, upon winning the contract, announced they 
are planning to take the $6 billion contract to a new, non-union plant 
in South Carolina instead of having UAW members in Wisconsin carry out 
this lucrative contract by building the next-generation vehicles in 
Wisconsin. It is far from clear that USPS gave any meaningful 
consideration to the impact on workers and communities when awarding 
this significant contract. We urge Oshkosh to reverse course and build 
the next generation vehicles in Oshkosh with its proven workforce.
    We cannot allow this to continue to happen. Our procurement 
policies across the board need to hold employers accountable and 
support working families. More work remains to improve labor standards 
in the federal contracting process as the U.S. government spends 
hundreds of billions of dollars through a wide variety of grant 
programs and contracting on an annual basis.

Investing in American Autoworkers

    We are at a pivotal juncture as automakers are transitioning many 
of their fleets from gas and diesel-powered vehicles to electric ones. 
The shift to EVs cannot come at the expense of good wages and benefits 
and it is critical that we do not leave workers behind as the industry 
transitions to electrification.
    To meet the ambitious EV targets put forward by major automakers 
and elected officials, we will need to invest in workforce 
capabilities. Luckily, the U.S. economy is not starting from nothing 
thanks to the large pool of American workers who not only assemble 
vehicles but build a wide range of materials and components for those 
vehicles. The UAW has around 200,000 members in auto-related 
manufacturing throughout the country from Michigan to Texas. These 
workers have a high baseline knowledge of manufacturing and a 
familiarity with manufacturing training programs. As we see a growth in 
battery pack, cell, and component manufacturing, material processing, 
and recycling, UAW workers are well positioned to transition into these 
new types of manufacturing. With investment in key EV and battery-
specific training programs for the current workforce, these workers can 
hit the ground running building the vehicles of the future and require 
less investment than starting with a whole new workforce.
    The UAW has a long history of supporting investments to train 
American manufacturing workers with labor input. For example, the UAW 
has a Skilled Trades Department with a long and successful history of 
building a strong pipeline of skilled workers critical for auto 
companies to grow their business and compete in a global economy. And 
through collective bargaining, the UAW has pushed the industry to 
continually invest in skilled trades and production workers, whether 
through work-based training, apprenticeships, or tuition assistance for 
skill development. With new vehicle and manufacturing technologies, the 
union is exploring all avenues for productive partnerships with 
employers, government, and educational institutions to promote 
upskilling and reskilling related to batteries, motors, material 
processing, recycling, fuel cell technology, and electric vehicle 
assembly.
    If there is one thing that is a ``constant'' in the auto industry, 
it is that it is constantly evolving and changing. Jobs that were once 
done by hand are now done by robots and machines. UAW joint training 
programs work hand in hand with local training coordinators to 
determine what additional education and training is needed for 
journeymen and apprentices when innovative technologies emerge, such as 
EVs. Training programs also need to coordinate with local community 
colleges to modify curriculum and classes to prepare the workforce for 
such changes.
    As changes occur, we also need to simultaneously provide 
comprehensive re-training programs to prepare displaced workers for 
this shift to new technologies. Federal and state governments must 
invest in improving and expanding vocational training and 
apprenticeship programs, with an active role for unions to ensure 
quality training and high road working conditions. These programs must 
provide workers not only with the skills to make EV vehicles and 
components, but also prepare them for the changing nature of 
manufacturing work as automation and other new technologies change the 
production process. Congress should also incentivize the development of 
joint training and apprenticeship programs between employers and unions 
and push employers to commit to retraining workers displaced by new 
technology.
    In addition to investing in American autoworkers, we must ensure 
that the investments to build vehicles and components are made in the 
communities where autoworkers are currently building traditional gas-
powered vehicles and powertrains. We cannot wait for ICE jobs to be 
lost as we need to target new investments for auto manufacturing 
communities now. Auto manufacturing is central to the economy of many 
communities, creating community-sustaining manufacturing jobs and 
stimulating economic activity in other sectors. Government support for 
EV investments should prioritize investments that create jobs in 
communities currently producing ICE vehicles and powertrains, hire 
incumbent autoworkers, and provide wages and benefits on par with 
unionized auto industry standards.
    Union workers must lead this transition. In fact, UAW members are 
currently building the vehicles of the future. Our members currently 
make advanced technology vehicles that include battery electric (Chevy 
Bolt, GMC Hummer, Ford F-150 Lightning, Ford E-Transit), plug-in 
hybrids (Jeep Wrangler PHEV, Jeep Grand Cherokee PHEV, Ford Escape 
PHEV, Lincoln Corsair PHEV), and autonomous vehicles (GM's Cruise 
Autonomous Vehicle). UAW employers have announced plans to make EVs and 
PHEVs at UAW plants in a range of segments, including CUVs, SUVs, 
pickups, and delivery vans.
    The EV transition reinforces the continued importance of putting in 
place policies that facilitate vehicle and parts production in the 
United States and ease impediments to workers at non-union automakers 
to organize. As the nation invests in a transition to innovative 
technology, we must seize upon these opportunities to preserve and 
increase quality jobs. We have an opportunity, right now, to ensure 
that future EV investments incentivize production of EVs in the United 
States, made by union workers. Unionized workers earn on average 10.2% 
more than their non-union counterparts.\23\ Union workers are more 
likely to have paid sick days and health insurance compared to non-
union workers. Ninety-four percent of union workers participate in a 
retirement plan compared with 67% of non-union workers.\24\ Policies 
that strengthen labor standards and support workers' right to 
collectively bargain are foundational to building a strong middle 
class. There is little debate about whether the auto industry is going 
to change significantly because of the growth of electric vehicles 
(EVs) and plug-in hybrids. While we do not know how quickly EV markets 
in the U.S. will expand, we do know EVs will become a larger component 
of fleets in the decades ahead. A proactive policy approach at the 
federal and state level can potentially mitigate disruptions and 
harness the opportunities of the EV transition.
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    \23\ https://files.epi.org/uploads/226030.pdf
    \24\ https://files.epi.org/uploads/226030.pdf
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    The full impact of EVs on U.S. auto industry and job quality are to 
be determined. There are many open questions about the future. For 
instance: Will EV's support help create good new jobs over time? Will 
EV battery assembly work? Where and how will the supply chain operate?
    Our union is working to ensure the answers benefit workers. 
Decisions by policy makers can help ensure that the advanced technology 
vehicles of the future are made here in the U.S., thereby promoting 
U.S. competitiveness, and creating quality manufacturing jobs. We have 
an obligation to advocate for workers and ensure that our ideas are 
shaping the future of the domestic auto manufacturing industry.
    As we work toward the future of clean transportation, it will be 
critical to ensure this transition benefits American workers in both 
the short and long term and enhances U.S. competitiveness and economic 
security.

Conclusion

    The passage of the Inflation Reduction Act in conjunction with the 
CHIPS and Science Act, ARPA, and the IIJA will take meaningful steps to 
reduce costs, create jobs, bolster domestic manufacturing, and tackle 
climate change. We stand ready to work with this Committee and all 
other stakeholders to ensure the transition is good for working people, 
the U.S. economy, and our planet. It is critical that policymakers 
fully implement these laws and build upon them in coming years.
    Thank you for considering the views of autoworkers. I look forward 
to answering your questions.

    Ms. Castor. Thank you very much.
    Thanks to our witnesses for their informative testimony. I 
will recognize myself for 5 minutes to start the questions.
    Thank you all for weighing in on how the Inflation 
Reduction Act is a win-win-win. It is a win for American 
families, it is a win for workers, it is a win for businesses 
across this country.
    It really puts us in a--as Mr. Nassar pointed out, a great 
competitive era. The global competition for who is going to 
make these technologies and how we expand them across the 
world, it is on. That competition is on, and it is America that 
should be in the lead on all these, and it is our families and 
our workers that should benefit.
    But I want to take us kind of out of the Washington, D.C. 
committee room and take us to kitchen tables of families across 
the country that have been grappling with higher costs, and try 
to make this real for them. Because they hear Inflation 
Reduction Act, they may have heard, oh, okay, this has a clean 
energy and climate piece, but what does this really mean for 
families?
    And Consumer Reports, Ms. Warren, is a trusted source for 
consumers across the country. We see rebates and discounts for 
all sorts of, not just electric vehicles, but appliances, air 
conditioning, heat pumps, insulating your homes. How can we get 
the information out, how can you help us, and how can other 
organizations help us get that information into the hands of 
families who really need it? They are hungry for ways to save 
money right now. What is your advice?
    Dr. Warren. Thank you, Chair Castor, for the question. Yes, 
the IRA has a lot of good benefits for consumers. As you 
mentioned, energy costs can be high, especially for low-income 
consumers for whom the spend on energy is the highest.
    This bill offsets the cost of more efficient appliances, 
allows them to weatherize their homes, and allows them to save 
costs over time on vehicles, appliances, and so on.
    I think everybody would agree that switching to more 
efficient appliances is a good thing, and I think consumers 
already know that, and they are clamoring for these clean 
technologies.
    It is a matter of creating awareness, and that is part of 
what we do as Consumer Reports. For example, we have 
information and buying tools on our website. One of those is 
directly tied to electric vehicles. We are actually--people can 
go in and put in their location information, and EV incentives 
will come back out specific to where they are and their income 
and so on. And we plan to update that tool once the IRA is also 
implemented so that people know what the new benefits are to 
them.
    So as Consumer Reports, we certainly can do our part in 
just educating people on how they can take advantage of these 
incentives once they are implemented.
    Ms. Castor. I think that is going to be so important. One 
good website that I have come across is RewiringAmerica.org 
where, what you said, you know, some of these are location 
based, you can put in your ZIP Code and the discounts and 
rebates and tax credits come up.
    Some of these are available now, and we are talking about 
clothes dryers, if you are going to replace your air 
conditioner, get a more efficient fuel pump and save money at 
the same time. Just insulating your home, things like even the 
electric panel in your--the electrical panel in your home. 
These are going to be available to you.
    And I appreciate you pointing out that the Inflation 
Reduction Act is really targeted at working class, middle-class 
families. If you are a millionaire or billionaire, you do not 
qualify for--you cannot use this to help you save money on your 
next model Tesla. These have to be--these are targeted to 
working families, middle-class families. There are some income 
limits, and it is going to--it has the potential to create 
millions of good-paying jobs.
    Mr. Nassar, it is hard to keep up now with the 
announcements from car manufacturers, battery plants now, on 
their new factories and plants. What are you watching right 
now, and how can we keep up with the job opportunities that 
will be available?
    Mr. Nassar. I think it is--thank you for the question. I 
think it is really going to be important to watch the decisions 
very closely made by companies as far as what are they going to 
do as far as their workforce. You know, are they going to make 
sure that they actually have a choice whether to join a union 
or not, or are they going to fight it? Are they going to, you 
know, pay below manufacturing wages or not?
    And I think that the Congress and the administration really 
need to put a spotlight----
    Ms. Castor. Well, and the incentives are tied to if there 
is more money back into people's pockets when they purchase an 
EV, if it is made in America, the component parts are made in 
America, and we do it with the union labor. Is that right?
    Mr. Nassar. The provisions were changed in the Senate. The 
House version was--that was completely the House version. The 
EV tax credit, what is really good about it is, right now, 
there were several companies that weren't able to offer at all, 
like GM, and now the cap has been lifted, so that should enable 
some more union-built cars to get out.
    Ms. Castor. Yeah. We will get into it a little bit more--I 
am over time. We will get into that a little bit more.
    But at this time, we will recognize Mrs. Miller for 5 
minutes. Welcome.
    Mrs. Miller. Thank you, Chair Castor. Thank you all for 
joining us today.
    One of the most wonderful things about America, it is made 
up of many, many people, with many, many opinions. And I 
appreciate the opportunity to talk about the so-called 
Inflation Reduction Act.
    Every economist worth their salt has concluded that this 
legislation would do the exact opposite. It will make inflation 
worse. It will punish working class Americans, and it will make 
America less competitive by chilling innovation.
    Today I get to share with my colleagues what damage this 
bill will really do to our families, our communities, and our 
country.
    First of all, it is telling that we are speaking of this 
bill in this particular committee. This bill does nothing to 
reduce inflation for working class Americans, but it does force 
taxpayers to pony up hundreds of billions of dollars for Green 
New Deal slush funds that will ultimately do little to nothing 
to lower global emissions.
    It will put hardworking American energy workers out of a 
job and send billions of dollars to the Chinese Communist Party 
to buy supplies for their boondoggles.
    The bill also includes a $250 billion slush fund at the 
Department of Energy to provide taxpayer subsidies for risky 
renewable technologies that no traditional bank would ever 
invest in, even with their ESG-centric leadership.
    The Department of Energy should be laser-focused on 
lowering the price of energy for the American people and 
ensuring that our electrical grid is reliable. Instead, 
Americans this year have faced record-high gas prices when they 
fill up their tanks, record-high heating prices for their home, 
and are staring down a cold, dark winter, with rolling 
blackouts and brownouts already common across the country.
    I am thankful that we still have coal and natural gas to 
keep our homes powered when renewables cannot possibly fill 
this need at this time. If this administration had its way, our 
most reliable baseload energy would be dismantled as well.
    The attacks on American energy production aren't the only 
disastrous provisions of this bill. It also increases taxes on 
American companies who are already grappling with high 
inflation, further increasing prices, creating fewer jobs, and 
lowering wages across the board.
    I look forward to the Republicans taking control of 
Congress next year to put a stop to this madness being 
perpetrated by this bill and holding the out-of-control Biden 
administration accountable and to put Americans back to work.
    Mr. Rossetti, in your testimony, you state that the impact 
of this bill will transfer wealth from American taxpayers to 
subsidize energy companies. Proponents of the bill claim that 
most of the taxes raised by the legislation are paid for by 
wealthy corporations.
    Can you explain why that is a misleading assumption, and 
who will actually bear the burden of the book minimum tax?
    Mr. Rossetti. That is an excellent question. So when you 
think about the effects of the corporate tax, the important 
thing to keep in mind is that, at the end of the day, humans 
are the ones who pay taxes, even corporate taxes.
    So most people who say that we should do corporate taxes 
try to say, well, you know, it is the investors of the 
corporations who bear the tax, and that might have been true in 
an environment where you had a more closed economy, but now we 
have a globally competitive economy, and corporations have to 
compete everywhere.
    So under those conditions, the research increasingly shows 
that workers and consumers of corporations pay a larger share 
of the corporate income tax. So the IRA's tax on what they call 
supernormal returns, which is kind of a more recent term, even 
that is expected to have about 50 percent of its costs fall on 
corporate workers.
    So when we look at these taxes, we have to understand if 
investors are able to shift the incidence of the tax onto other 
entities, we would expect them to do so, and I don't think the 
IRA is any different in that regard.
    Mrs. Miller. So is the taxpayer-funded renewable subsidies 
the best way to lower global emissions or would money be better 
spent more effectively elsewhere?
    Mr. Rossetti. I would say that is probably not the best 
policy, because one of my concerns with climate change is this 
is a global challenge. So when I look at this sort of policy of 
continued indefinite subsidy for renewable energies and other 
energy priorities, it is communicating to the rest of the 
world, especially the developing world where they have far 
lower incomes relative to Americans, that these technologies 
are only viable with continued subsidy, and really the key is 
actually having lower real costs, not lower subsidized costs.
    Mrs. Miller. I yield back my time.
    Ms. Castor. Next, Rep. Bonamici, you are recognized for 5 
minutes.
    Ms. Bonamici. Thank you, Chair Castor, and thank you to the 
witnesses. And, Chair Castor, I just want to also add, my 
thoughts are with your constituents in the State of Florida.
    I do want to respond to Ranking Member Graves' comment, 
which I found a bit surprising today, about the number of 
hurricanes decreasing. From what I could tell in my brief 
research, according to the Center for Climate and Energy 
Solutions, the number of smaller hurricanes has decreased, but 
the number of major hurricanes has increased. And, in fact, 
even the sources that confirmed that the number of hurricanes 
has decreased, it is true in other ocean basins but not the 
North Atlantic. So I just wanted to respond to that comment.
    I am tempted to respond to Representative Miller's comments 
as well, but I want to cheer for the Inflation Reduction Act 
because it is a significant step moving forward in meeting our 
goals of a net-zero emissions future.
    We know it is not the only step we need to take. It is 
anticipated that the Inflation Reduction Act will create about 
9 million jobs over the next decade and among other fields: 
clean energy, clean transportation, and clean manufacturing. So 
this means that we need to train and onboard new workers to 
work for us in apprenticeship programs. I want to talk to Mr. 
Nassar about that.
    Mr. Nassar, you may know I grew up in the Detroit area. I 
love Oregon and I have lived there a very long time, but my 
childhood was spent in the Detroit area.
    So I know that U.S. companies are making more electric 
vehicles. So can you talk a little bit about what is involved 
in converting the infrastructure for manufacturing and how the 
Inflation Reduction Act will help?
    But also, I wanted to talk about the workforce issues, both 
in autos, and I know your union also represents aerospace 
workers. How will the Inflation Reduction Act help meet these 
needs? Because as I mentioned, tremendous number of jobs, and 
new skills, are going to be needed, and it is exciting.
    Mr. Nassar. Very exciting. Thank you for the question. 
First of all, just on the workforce for a second, you know, 
through collective bargaining and other unions, we have very 
successful apprenticeship programs where people able to 
upskill, and I think taking a look at that, having more help 
for vocational education, and building up that part of the 
workforce more would be helpful Federal policy, but also take a 
look at what some of the companies and unions are already 
doing, because we don't need to reinvent the wheel so to speak.
    Ms. Bonamici. Right. We are trying to update the National 
Apprenticeship Act for the first time since the 1930s. We are 
working on that.
    Mr. Nassar. But the other thing is, you know, talking about 
the jobs, I mean, the truth is that these are very competitive 
industries, the manufacturing industries. And if you are not on 
the cutting-edge, if you are not making the new product, you 
know, you can fall way, way behind.
    So there has to be risks taken first of all. Not every idea 
necessarily pans out. But what is the cost of not doing it?
    Well, the cost is, we are going to continue to have--we 
will have a decline in leadership, as far as creating the 
industries of the future. We would fall further behind on EV 
production and battery production, and that means ultimately 
those jobs won't be here.
    Ms. Bonamici. Right.
    Mr. Nassar. So we got to anchor the jobs here. As far as 
what we can do to make them better jobs, I mean, I would say, 
you know, the Senate follow the House's lead and make sure that 
workers have a voice on the job by passing the GROW Act would 
be one thing.
    Ms. Bonamici. I agree with you on that.
    Mr. Nassar. And then the other thing, I think, is just to 
really, you know, have tight scrutiny on the way that companies 
are using those funds and making sure that it is, you know, as 
intended.
    Ms. Bonamici. Great. Well, and I look forward to working 
with you on that. And, of course, the CHIPS and Science Act, as 
a member of the Science Committee, I know that is going to 
help----
    Mr. Nassar. Oh, yeah.
    Ms. Bonamici [continuing]. Greatly, because everything has 
chips in it now.
    Dr. Warren, thank you for being here. Your testimony, you 
mentioned that low-income and overburdened communities have 
historically borne the brunt of the climate crisis, including 
experiencing more harmful effects from air pollution and 
greenhouse gas emissions.
    So why does reducing emissions from the transportation 
sector, which the Inflation Reduction Act does through the 
investment in zero emission, heavy duty vehicles, how does that 
benefit low-income and disadvantaged communities?
    And also, just to follow up on Chair Castor's question, how 
can the Inflation Reduction Act help Americans save on energy 
costs?
    And I just want to mention that, in Oregon, we heard from 
Sammie Lewis in a roundtable conversation, who said that 
through the programs that Oregon offers through Oregon Energy 
Trust, she was able to do efficiency upgrades like are 
anticipated with this bill, and she has a credit on her energy 
bill right now from doing that. So can you talk about that as 
well?
    Dr. Warren. That is excellent to hear. Thank you for the 
question, Representative.
    So low-income and other overburdened communities have borne 
the brunt because of, you know, discriminatory policies that 
place them more in proximity to high transportation corridors, 
warehouses, ports, and so on. So they feel the impact of air 
pollution and greenhouse gas emissions the most.
    Now, electrifying heavy duty vehicles means that there will 
be, you know, reduced air pollution in those neighborhoods. 
And, of course, there are other parts of the IRA that are great 
for them because they get to participate in buying and owning 
and using clean technologies as well.
    I am trying to come back to your second question, but I 
forgot----
    Ms. Bonamici. Oh, I was just asking about the energy 
savings that people are experiencing and what a difference that 
will----
    Dr. Warren. Oh, yes. Yes. So more energy efficient 
appliances obviously means you use less energy, which means 
that you are saving money. And, frankly, again, low-income 
consumers tend to have a higher energy burden. So this is great 
for them because they will get to keep more money in their 
wallets.
    And similar with electric vehicles, which, as I have said, 
save something like 60 percent on fueling costs alone, so that 
over the life of the vehicle, they will save between $6,000 and 
$10,000, which is fantastic.
    Ms. Bonamici. Thank you. And I know I am out of time, but 
as I yield back, I just want to mention in regard to 
transportation, that when the Select Committee on the Climate 
Crisis came to Oregon, both Chair Castor and Representative 
Carter were able to see our Electric Island where they recharge 
school buses made in Georgia and city buses that are electric.
    I yield back.
    Ms. Castor. All right. Next, I will go to Rep. Casten. You 
are recognized for 5 minutes.
    Mr. Casten. Thank you, Madam Chair, and thanks so much to 
our witnesses.
    Mr. Rossetti, I would like to focus on you, and I really 
want to emphasize the areas that we have a lot that we agree 
on, but I don't want to presume on what we agree. So let me 
just start with things that I am thinking we are on the same 
page on, but, number one, would you agree with me that 
competition helps lower inflation? Competitive markets make 
things cheaper.
    Mr. Rossetti. Well, I say supply is probably going to be 
the key to lowering inflation. Inflation is caused by too many 
dollars chasing too few goods----
    Mr. Casten. I am just asking a yes or no. Are you pro-
market competition as a tool to lower inflation?
    Mr. Rossetti. Yeah, we are pro-competition.
    Mr. Casten. Okay. Terrific. We are on the same page.
    Do you agree with me that subsidies make markets 
inefficient?
    Mr. Rossetti. I would agree that subsidies make markets 
inefficient.
    Mr. Casten. Terrific. And I know you used to be a Hill 
lobbyist. Is your experience similar to mine that it is vastly 
more common that corporations lobby for lower taxes than it is 
that they come in and lobby for higher minimum wages?
    Mr. Rossetti. I have never been a lobbyist----
    Mr. Casten. Would that be your experiences?
    Mr. Rossetti. I can't speak to that.
    Mr. Casten. But you were on the Hill for a while. Surely 
you ran into some people who were coming and making asks of us?
    Mr. Rossetti. Well, I know that, you know, lobbyists are 
always going to pursue more tax breaks----
    Mr. Casten. Do you find that Corporate America is regularly 
asking for higher minimum wages or lower taxes? This is not a 
trick question.
    Mr. Rossetti. I would say that, you know, corporations are 
always going to ask for lower taxes because----
    Mr. Casten. Okay. Terrific, terrific. The reason I 
established those things we agree on is because competition 
lowers inflation. The IRA gives consumers choice. If you can't 
afford a solar panel on your roof, you don't have a choice. We 
just made that cheaper.
    If you can't afford to buy an electric vehicle, we just 
made those things cheaper. Those people who can't afford that, 
they are buying more expensive gasoline to run their car if 
they can't afford an electric vehicle.
    They are buying more expensive energy from their utility. 
Once they have those solar panels, they run them. Once they 
have the EVs, they drive them. They are inherently cheaper.
    The permitting bill that just failed yesterday, why did it 
fail? Because the regulated electric utility, which does not 
know what market competition looks like if it bit them in the 
posterior, lobbied against it to kill it because they can't 
bear the thought that we might actually get transmission that 
would bring cleaner, cheaper energy to market.
    We both hate subsidies. The fossil fuel sector gets $664 
billion a year in subsidies, according to the International 
Monetary Fund. About 10 percent of that is through direct 
taxes.
    I cannot get a single Republican to support the People Over 
Petroleum Act; me and my colleague, Mr. McEachin, have 
introduced that would cut those taxes and give $500 back to 
every American. Because at the end of the day, you all are not 
pro-market. You are pro-corporate welfare.
    The third point is, you said in your testimony--I am 
quoting your written testimony--``50 and 100 percent of 
corporate income taxes fall on corporate workers.'' Are 
corporations idiots or do they actually know that that is not 
really true? Because if it was, they would be pushing for 
higher minimum wages because they are agnostic, right, and it 
is the same as taxes.
    Now, the truth is the IRA is going to create jobs, it is 
going to lower energy bills, create energy independence, 
improve health outcomes. It is an investment in our future. It 
is going to save the typical household $1,800 a year. That is 
anti-inflationary, that is less money.
    But we actually have a lot of stuff that we agree with. We 
agree that we need transmission reform. We agree on your 
analysis that there are vastly more barriers to deploying clean 
energy than there are to fossil energy.
    Your own analysis says that the fossil fuel projects are 
basically doing fine, not surprisingly because they are so 
heavily subsidized.
    We agree that we should get rid of all these distorting 
market subsidies, especially the biggest ones in the fossil 
fuel sector. But to do that, we need policy reform, not just 
spending.
    And in order to make those policy reforms, we either need 
to get rid of the filibuster in the Senate, because we all know 
the reason why we had to do this through reconciliation was 
because of Senate procedural rules, or we need a Republican 
Party that is committed to competitive markets. That is 
committed to the idea that if you give consumers choice to have 
cheaper energy, that is the best outcome. That is committed to 
the idea that science matters, not just crony capitalism.
    And we are here in this moment. I sit on the Financial 
Services Committee. We had a whole long conversation with the 
big banks last week about woke capitalism.
    Exxon is trading at a 10 times multiple on earnings. Tesla 
is trading at a hundred. Capital markets are 10 times more 
desirous of putting their hard-earned dollars into companies 
that are providing things that people want.
    Shell is trading at a seven times multiple on earnings. 
First Solar is trading about 70. Again, 10 times factor.
    Capital markets choosing to invest in people who are giving 
things, what people want, in spite of all those subsidies is 
not woke capitalism. It is capitalism.
    Let's embrace it, let's move forward, let's be responsible. 
Let's recognize the areas where we have an agreement and not 
get into the silly polemicism, because we do not have time to 
sit around here in rhetorical gymnastics that are basically 
just lies.
    Thank you and I yield back.
    Ms. Castor. Next up, Mr. Carter, you are recognized for 5 
minutes.
    Mr. Carter. Thank you, Madam Chair, and thank all witnesses 
for being here today.
    I want to start with you, Mr. Rossetti. Appreciate you 
being here, albeit virtually. Of the many things that I have 
concerns about in the IRA, in the Inflation Reduction Act, the 
electric vehicle subsidies are a big concern of mine and to my 
district, and I will explain that, the reason for that.
    Setting aside the issue of the actual emission impacts of 
EVs, I am concerned about the actual policy we rushed into law. 
If you will remember, the Inflation Reduction Act did not go 
through regular order. It didn't go through the committee 
process. It went straight to the floor. And there is a problem 
with that.
    Also as you are aware, the law expands EV tax credit 
incentives, but it also puts in place new requirements for 
manufacturing those vehicles and batteries in the United 
States. The goal of this is to bring more manufacturing into 
the U.S.
    We all agree with that. Republicans, Democrats, we all want 
more manufacturing in the U.S. We all agree with that.
    Unfortunately, a major company, Hyundai, Hyundai announced, 
in my district, the largest economic development project in the 
history of our state. They announced that they were going to be 
building an electric vehicle plant that is going to be a $5.5 
billion investment in the First Congressional District of 
Georgia. It is going to create 8,100 jobs. And that is not 
the--that is just their plant. It is not the subsidies and the 
other companies that are going to be there as well.
    They expect for subsidiary companies to invest another 
billion dollars, for a total of about $6.5 billion investment 
right there in the First Congressional District of Georgia, 
8,100 jobs, plus the other jobs that are coming about as a 
result of the ancillary jobs that will be affiliated with the 
other companies that come there.
    But now it is all at risk. All of it is in jeopardy. The 
largest investment in the history of the State of Georgia in 
jeopardy because of the Inflation Reduction Act. And let me 
tell you why.
    It says that Hyundai will not be able to qualify for this--
for these credits because they won't have their plant built for 
18 to 24 months from now. So they are not going to be able to 
participate in these EV tax credits. They are considering 
withdrawing that.
    Now, a couple of things I want to point out. This is 
egregious in the sense that we did not go through regular 
order. You know, none of us is as smart as all of us. If it had 
gone through regular order, perhaps we could have--we could 
have realized what was going on here, we could have vetted it 
and understood that this was a problem.
    But more so than anything, the President of the United 
States was in South Korea the week before and assured the 
leaders of this company that they would be taken care of in the 
Inflation Reduction Act. And then they go and announce it, and 
the following week, 2 weeks from when he had been in South 
Korea, this Inflation Reduction Act is introduced and passed, 
rammed through without regular order. And all of a sudden, that 
promise that was made to them, they find out they are not going 
to be eligible for this.
    Let me ask you something, Mr. Rossetti. Most electric 
vehicle models on the market today won't qualify for this EV 
tax credit. Is that your understanding of that?
    Mr. Rossetti. That is my understanding. The narrower 
constraint of the new EV tax credit is going to mitigate the 
eligibility across existing EV producers.
    Mr. Carter. Is that going to result in more EVs on the 
road?
    Mr. Rossetti. Well, according to the estimates of the new 
EV tax credit, which we show would only support about a million 
EVs, that is far lower than the projected uptake even without 
the IRA. So I don't see that specific tax credit having a huge 
benefit to the new EV market uptake.
    Mr. Carter. The EV tax credits that are in the Inflation 
Reduction Act, who do they--that are written into law, who 
benefits from them?
    Mr. Rossetti. That is a great question. So when we think 
about the tax credits for new EVs, that is obviously going to 
benefit people who are buying new EVs.
    But I am also a bit skeptical of the used EV tax credit, 
because the expectation is that people who are buying used 
vehicles would benefit the most from having their purchasing 
power increased. But I would also expect people who already 
have EVs that are going to sell them would do so anyway. So 
they might be able to charge a higher price because of the used 
EV tax credit, which might actually inadvertently benefit 
people who already own EVs and are generally----
    Mr. Carter. Well, I am about out of time. I thank you for 
your answers. But, again, I want to reiterate, the largest 
investment in the history of the State of Georgia in jeopardy 
because this bill was rammed through. It didn't go through 
regular order. It wasn't vetted like it should have been. 
Because promises were made to these people that weren't kept, 
and now it is in jeopardy.
    Thank God we are the number one forestry state in the 
Nation, and we can afford this.
    Thank you. I yield back.
    Ms. Castor. Next up, Representative Escobar, you are 
recognized for 5 minutes.
    Ms. Escobar. Thank you so much, Madam Chair. And I think it 
is really important first to recognize what is happening in 
your State of Florida and to tell you just how much I, and I 
know others, have been keeping Floridians in our prayers. Just 
seeing the devastation that families are living through has 
been so heartbreaking.
    And to see really kind of--the irony of it is, here we are 
talking about the Inflation Reduction Act and all of the 
benefits that can and will come from this historic piece of 
legislation, while at the same time, you know, on TV screens 
across America, we are witnessing the devastation happening in 
Florida as a result of the climate catastrophe.
    And the fact of the matter is, and the tragic reality is, 
we have taken far too long to act. And for decades we have 
heard from people who were either climate deniers or who loved 
to list all of the obstacles or, you know, any potential 
downsides to investment in order to address the climate crisis, 
instead of all of us being on the same page about solutions.
    And I have to agree with my colleague, Mr. Casten, who said 
that we--and we had to pass climate action legislation through 
reconciliation without a single Republican vote because, 
tragically, too many of our Republican colleagues either want 
to obstruct progress on this or deny that this is a challenge 
altogether.
    And so, you know, while I am very excited about the 
investments in the Inflation Reduction Act, I am also very 
cognizant of the fact that we are acting decades too late.
    I have said this before. You can't unmelt an ice cap, you 
know, and so we are going to have to do the best we can, as 
quickly as we can, in order to make sure that those dollars go 
out the door and are as effective as they can be.
    I would like to start with a question to Dr. Warren. And to 
all of our panelists, thank you all for testifying today. Thank 
you for taking time to have this really important conversation.
    Dr. Warren, I represent the community of El Paso, Texas, 
which is an economically disadvantaged, mostly Latino community 
on the U.S.-Mexico border. And we have seen the impact of 
severe drought in our community, followed by historic rainfall 
that leads to flooding and that leads to complete topsoil 
erosion, destruction of infrastructure. So we have been having 
to balance both of those things.
    But I will tell you, I have a community eager to lean in on 
addressing the climate crisis and also taking advantage of the 
Inflation Reduction Act. And our Chairwoman kind of mentioned 
this in her questions and her comments as well, you know, 
wanting to make sure that--that communities understand how to 
access those funds. But my particular interest is underserved 
communities and making sure that we get as much information and 
get those dollars directly to them.
    And so I would love for you to highlight for us how 
underserved communities can benefit from these incentives in 
the Inflation Reduction Act, please.
    Dr. Warren. Thank you for the question, Representative. I 
am sorry. I was going to say, I am sorry for the things that 
your community is going through. That is actually where I 
wanted to start.
    In terms of how they can take it--or how they can benefit 
from these incentives, again, these clean technologies are 
actually good for consumers because they cut down on operating 
costs, they cut down on energy costs, which communities exactly 
like the one you are describing will benefit from. So that will 
save them money that they can keep in their wallets.
    The problem has been that they generally cannot afford 
these technologies. So the IRA comes in and actually brings 
down these purchase costs and allows them to be part of this 
clean energy transition.
    In terms of vehicles, the fact that we have used EV credits 
is a huge thing. This is the first time that tax credits can be 
used for the secondary car market, and communities like this 
generally buy their vehicles on the secondary car market.
    So once again, this gives them the opportunity to 
participate. They can transfer those credits to dealerships, 
which will allow them to actually take advantage of the full 
incentive rather than just what would be limited to their tax 
liability.
    So even besides cars, in the homes as well, they can reduce 
the cost of energy efficient appliances, and they can 
weatherize their homes, all that leads to lower energy spend 
and energy costs, which allows them to save money that, once 
again, they can keep in their wallets.
    Ms. Escobar. Dr. Warren, thank you so much for your work. 
And you are right, the secondary car market is going to be 
huge, and we have got to make sure that our communities, 
especially communities in need like mine, stand ready to take 
advantage. Thank you so much. Appreciate it.
    I am out of time. I yield back, Madam Chair.
    Ms. Castor. Thank you.
    Next up, Mr. Palmer, you are recognized for 5 minutes.
    Mr. Palmer. Find my talk button. Thanks.
    And, Chair Castor, I am glad to know that your family and 
community were spared, and we do continue to monitor what is 
going on in Florida, and I know all of us are committed to 
helping any way we can.
    I do want to talk about what you call the Inflation 
Reduction Act. I call it the income reduction act. We were 
talking with economists, including left-of-center economists, 
economists that were in the Obama administration, that believe 
that this is going to make inflation worse.
    And we have been following this very closely. The more 
money you pour into the market, the worse it makes inflation. 
But when you add to that these, I think, very devastatingly 
damaging energy policies that are being implemented by the 
Biden administration and supported by the Democrats in 
Congress, it is going to make life even harder for American 
families.
    We are in a cost-of-living crisis. We are not only seeing 
the price of goods and services go up, food, just basic living 
items. There are 20 million Americans that are already behind 
on their utility bills, and it is going to get even worse this 
winter.
    I am very concerned about the number of excess winter 
deaths that we will see as a result of people not being able to 
keep their homes adequately warmed and still be able to afford 
their food and medicine.
    We have seen the impact that the passage of this bill had 
on the stock market. And there are millions of families all 
over the country that had invested in the market with the hopes 
of using the returns from those investments to pay for their 
kids' college. They are not planning on getting the government 
to pay for their kids' college. They were going to pay for it.
    You have got families where people in their late 50s, early 
60s, planned to retire, they can't do that now. You have got 
retirees that are needing to find another job because their 
investments are not keeping up with inflation.
    And then looking at what is happening to the market--it was 
actually predicted--that if we passed another stimulus bill 
like the income reduction act that it would result in the Dow 
going below 30,000. They actually predicted, you know, 29,500, 
and almost hit it spot on.
    And I know, you know, my Democrat colleagues like to claim 
that we are climate deniers. That couldn't be further from the 
truth. We understand climate. And having worked in engineering, 
as I have said many times, I understand what it takes to build 
out the infrastructure that you have to have to go to lower 
carbon emissions.
    This idea that you are going to go to zero carbon emissions 
in the near future is a pipe dream. It is not possible, from an 
engineering side, and it is only going to make things worse. 
And I am very concerned about how this is impacting.
    This idea that this--this is one of the lowest hurricane--
instances of hurricanes in hurricane season in a long time--we 
went one 12-year period where we didn't have really any 
significant hurricanes--that even the Intergovernmental Panel 
on Climate Change admits that there is no consensus that man-
made activities or climate change have any impact on the 
number, frequency, or intensity of hurricanes. This is what you 
get when you live on the Gulf Coast. You have hurricanes. We 
have had them for years.
    The interesting thing is, is that since 1900, in terms of 
loss of life attributed to natural catastrophes, there has been 
a 98 percent reduction. A lot of that has to do with the fact 
that we have learned how to prepare for these natural disasters 
and mitigate against them. And that is what we ought to be 
doing in preparation for the climate change that is coming that 
we can't do anything about.
    I hear misrepresentations about the history of drought as 
though drought is a new thing in the southwestern part of the 
United States. I first would remind my colleagues that that is 
a desert, arid region. It is an arid region. There is enormous 
numbers of people living there relative to what there have been 
in the past, so it creates a tremendous demand for water. But 
we have had droughts in the southwestern United States that 
lasted 50 to a hundred years, a thousand years ago.
    So we have got to get back, not only to the science of 
climate change, but also to the history of climate change if we 
want to have any impact that truly helps people. And throwing 
more money at it is not the answer.
    And we are going to face a time when we literally have 
blackouts in the Midwest, because they have changed the energy 
mix that fuels--that provides the power to our grid.
    And, with that, Madam Chairman, again, I am very concerned 
about what is going on in Florida for family and friends down 
there. And if we can be of any help, let us know.
    I yield back.
    Ms. Castor. Thank you.
    Next up, Ranking Member Graves, you are recognized for 5 
minutes.
    Mr. Graves. Thank you, Madam Chair. Madam Chair, thanks 
again for the hearing. I want to thank you all for being here, 
and I apologize, I had to take off.
    I understand that there was maybe a little bit of an 
unpleasant dialogue earlier, and I am very sorry that I missed 
it, but I want to make note that that is the second time in 2 
weeks that there has been a member of--in this case, this 
committee, and the same member on another committee that 
attacked a witness that they didn't agree with.
    Last week it was Michael Shellenberger, and I think that it 
was attacking the witness because they didn't agree. And 
disagreeing is fine, but if we are going to truly address 
climate change, we have got to stay focused on emissions. We 
have got to stay focused on emissions.
    I think there are three things that we have got to stay 
focused on. I think it is the affordability of energy, I think 
it is energy security in regard to the supply chain, and it is 
the emissions.
    I want to remind you all, as the United States has led the 
world in reducing emissions, for every one ton of emissions we 
have reduced, China has increased by four. China has increased 
by four for every one ton of emissions we have reduced.
    It is infuriating to sit here and watch us continue to go 
on this path where right now the United States emissions are 
actually increasing. You know, read it in the press, U.S. 
emissions are increasing right now.
    The Inflation Reduction Act, as I noted earlier in quoting 
Mr. Rossetti's testimony, projected that two-thirds of the 
emissions reduction under that legislation were already going 
to be--were already going to happen.
    Mr. Casten made note in his comments earlier about how the 
economics are being distorted or volatility or whatever. Look, 
if you want to talk about volatility or distorting economics, 
it is by stepping in and making things economic--distorting or 
making economics perverse in a way that there is not a path to 
economic sustainability.
    We always talk about environmental sustainability. What 
happens when subsidies dry up, when they phase out? If these 
projects aren't on a path to economic sustainability, that 
causes volatility.
    By making or distorting economics in a way that makes 
people invest in projects or technologies that aren't 
economically sustainable, that just doesn't make sense. We are 
creating the volatility by not thinking about a sustainably--an 
economically sustainable glide path for some of these 
technologies.
    Mr. Rossetti, I understand that you took some lumps earlier 
in regard to some of your statements on the IRA. I wanted to 
give you a chance to clarify some of your remarks.
    Mr. Rossetti. Sure. You know, one thing that I thought was 
a little interesting is that Representative Casten I think 
correctly pointed out that subsidies do distort markets and 
actually reduce competition and, therefore, make things more 
expensive in the long run, yet then defended the extremely 
large subsidies in the IRA. It seems to be contradictory.
    But one thing I also think is important to note is, the IMF 
is frequently cited for its estimate of fossil fuel subsidies, 
but that estimate is almost entirely contingent upon estimate 
that if carbon is not taxed, that therefore that equates to a 
subsidy, which is kind of similar in logic to saying that you 
are, you know, subsidizing your local bank by not robbing it.
    If the Democrats wanted to implement a carbon tax to 
address that, if they truly believe that, then they certainly 
could have under budget reconciliation provisions.
    Mr. Graves. Thank you, Mr. Rossetti. Mr. Rossetti, are you 
a lobbyist?
    Mr. Rossetti. Absolutely not.
    Mr. Graves. And are you advocating for solutions that are 
economically sustainable?
    Mr. Rossetti. Economically sustainable climate solutions 
are key to actually bring down global emissions. You look at 
where emissions are growing, it is developing nations. So if 
you want something that is going to help us in the long term 
especially address these impacts that many are so concerned 
about, you need to have technology that is low in cost, 
exportable, and going to be deployable in communities that 
might have a fifth or less of the income of a typical American 
household.
    Mr. Graves. Madam Chair, I think the point Mr. Rossetti 
just made is absolutely key, that ensuring that the 
technologies that the Federal Government is involved in, that 
there is a path to economic sustainability because that is the 
only way that you achieve a path to environmental 
sustainability. And otherwise, you are creating the volatility.
    And I think Mr. Rossetti just made the point that the 
government's actions right now, we are seeing higher emissions. 
As I noted in my opening statement, we are seeing one-quarter 
of all Americans unable to afford food, medicine, or energy.
    And we are seeing greater energy insecurity. Even Secretary 
Blinken, just this week, went to other countries asking them 
for critical mineral supplies that we have right here in the 
United States.
    So I think, again, we share objectives in regard to lower 
emissions and a sustainable trajectory, but I think maybe a 
different pathway of getting there would make a lot more sense.
    I yield back.
    Ms. Castor. All right. Next up, Mr. Crenshaw, you are 
recognized for 5 minutes.
    Mr. Crenshaw. Thank you, Madam Chair. Thank you for holding 
this hearing and allowing us to disagree on whether or not this 
is good for America or bad for America and certainly answer the 
question about whether it is good for inflation.
    Although I did notice that in the final hours of passing 
this bill, everyone basically agreed that this was not about 
reducing inflation, and instead it began being branded as a 
climate and energy bill.
    So let's take it as a climate and energy bill and ask the 
question, is it even good for energy security, is it even good 
for the environment?
    I would argue that it is not. Fundamentally, this bill took 
a bunch of taxpayer money, about $257 billion to be exact, and 
it invested it in intermittent energy sources, solar and wind 
to be exact. Now, these are known to increase the price of 
electricity on whatever grid they are prevalent, whether that 
is in California or Germany, while also causing grid 
disruptions because of their intermittency.
    And even if we decided that that is what we really wanted, 
you probably still can't accomplish what you want to accomplish 
because of the sheer physical challenges that you face.
    So under the rosiest of scenarios where there is--let's 
imagine this world--no bureaucratic red tape, no litigation, no 
weaponizing of the court system, and a well-functioning 
permitting system, we might get 155 gigawatts of new energy 
capacity brought online by 2030. That is the estimates from 
optimistic, left-leaning sources.
    So in this best scenario, you would get an extra 25 percent 
in total capacity for the United States. But you got to 
remember, when you are talking solar and wind in particular, 
you can't just talk capacity. You have got to talk actual 
energy production, which is usually only 30 percent of 
capacity. So that number gets reduced again. And eventually we 
realize we are really only adding 10 percent additional 
electricity production under the rosiest of scenarios and at 
quite a great cost.
    So what is the cost? Well, it is not just the $250 billion 
plus in taxpayer money, it is not just the increases in 
electricity cost to the consumer. But there is also an 
environmental cost in terms of land and materials that are 
required to build these new sources of energy. Because to get 
to the power capacity of wind that Democrats are hoping for, 
you would need wind turbines covering the entire State of 
Maryland, about 12,000 square miles. I am not sure that is good 
for the environment.
    It is not just about space, it is that to save the 
environment, you have got to hurt it first. You have got to dig 
up a lot of materials. And to build 100 megawatt wind farm, you 
need 30,000 tons of iron ore, 50,000 tons of concrete, 900 tons 
of nonrecyclable plastics. Multiply all that by 850 to get to 
the 85 gigawatts needed, and you get 25 million tons of iron 
ore, which means doubling the mining at our five largest iron 
ore mines in America.
    It is also 52 million tons of concrete, and that is enough 
concrete for 3 million new homes, or more than enough concrete 
to finish the remaining hundreds of miles of the I-69 highway 
that will drive economic benefit for the entire country. And, 
of course, it is 765,000 tons of plastic which require a 
drastic increase in oil and gas production.
    Finally, it reduces property values by 7 to 12 percent. It 
will kill wildlife like the golden eagle and hurt agricultural 
production.
    And that is not to say I am opposed to wind and solar at 
all. I am not opposed to using our natural resources to give 
ourselves energy, but throughout history, energy has been about 
getting more energy with less resources by utilizing energy 
dense materials. More energy for less costs, more energy with 
fewer air pollutants.
    But these tradeoffs, just to get 10 percent of our total 
production, are simply not worth it. And as policymakers, we 
have to be looking at the cost-benefit analysis in what we are 
doing and what will actually yield us the results that we want. 
And I think this bill will fail to do that.
    I yield back.
    Ms. Castor. Thank you very much.
    I want to thank our witnesses for your testimony today, 
especially how these clean, cost-saving technologies will 
benefit consumers, businesses, workers.
    The American people put us--give us a competitive edge 
against other countries across the planet. The Inflation 
Reduction Act is a tremendous step forward.
    It was recently described by the head of the International 
Energy Agency as the single most important action in addressing 
climate change since all of the countries on the planet came 
together to tackle the crisis. But we know there is more to do, 
and it is on all of us now to work with the Biden 
administration, work in our own hometowns to fulfill this big 
climate deal.
    Together we can keep forging this path towards energy 
independence, harness the immense potential of American clean 
energy, and I know that American ingenuity will help get us 
there.
    So thank you very much. We will make sure that your 
testimony is included in the record.
    Without objection, all members have 10 business days within 
which to submit additional written questions for witnesses, and 
I ask you to please respond quickly if you are able.
    Thank you all very much. We are adjourned.
    [Whereupon, at 2:01 p.m., the committee was adjourned.]

                 United States House of Representatives

                 Select Committee on the Climate Crisis

                     Hearing on September 29, 2022

         ``A Big Climate Deal: Lowering Costs, Creating Jobs, 
       and Reducing Pollution with the Inflation Reduction Act''

                        Questions for the Record

                           Dr. Quinta Warren

              Associate Director of Sustainability Policy

                            Consumer Reports

                       the honorable kathy castor
    1. Climate impacts are already underway in communities across the 
country. Electric power infrastructure is especially vulnerable to 
extreme weather, as we saw with the devastation from Hurricane Ian. Dr. 
Warren, how would the consumer incentives in the Inflation Reduction 
Act help families have access to rooftop solar and backup storage that 
could help them keep the lights on during, and immediately after, 
extreme weather events?

    In light of rising electricity and home energy costs, the 
incentives in the IRA make installing solar panels and storage 
batteries an even more attractive investment for many homeowners than 
it was just a couple years ago.\1\ By allowing consumers who install 
solar the ability to subtract 30% of the costs of their system as a tax 
credit, the IRA empowers consumers to make decisions that will give 
them greater control over the energy resilience in their homes, which 
will be critical during extreme weather events that cause blackouts.
---------------------------------------------------------------------------
    \1\ U.S. Energy Information Administration, Short Term Energy 
Outlook.
---------------------------------------------------------------------------
https://www.eia.gov/outlooks/steo/report/electricity.php

    2. Dr. Warren, increasingly consumers want access to clean energy 
and clean vehicles. How would the incentives in the Inflation Reduction 
Act help increase access to these clean technologies for all Americans?

    Our 2022 nationally representative surveys on electric vehicles \2\ 
and home sustainability \3\ show that one of the largest barriers 
preventing consumers from adopting cleaner technology is purchase 
costs.The IRA will alleviate that directly by providing consumers 
incentives to purchase new electric appliances in addition to new and 
used electric vehicles. By ensuring that the incentives go to middle- 
and lower-income consumers, the IRA will help support a clean energy 
transition for those who have not historically benefited from federal 
incentives. Not only have we seen that these clean technologies help 
consumers save money on fuel and maintenance costs, there are also cost 
savings associated with the positive health benefits that come with 
transitioning to cleaner technology.
---------------------------------------------------------------------------
    \2\ January/February 2022 Consumer Reports nationally 
representative Battery Electric Vehicle and Low Carbon Fuels Survey of 
8,027 US adults.
---------------------------------------------------------------------------
https://advocacy.consumerreports.org/press_release/more-americans-
would-definitely-get-electric-vehicles/
---------------------------------------------------------------------------
    \3\ March 2022 Consumer Reports nationally representative Home 
Sustainability Survey of 2,240 US adults.
---------------------------------------------------------------------------
https://article.images.consumerreports.org/prod/content/dam/surveys/
Consumer_Reports_Home_ Sustainability_March_2022

                        Questions for the Record

                              Josh Nassar

                          Legislative Director

 United Automobile, Aerospace, and Agricultural Implement Workers (UAW)

                       the honorable kathy castor
    1. Mr. Nassar, are there vehicles that will qualify for the new 
electric vehicle tax credit in the Inflation Reduction Act?

    Yes, following the passage of the Inflation Reduction Act (IRA), 
the Department of Energy (DOE) published a list of plug-in vehicles 
with final assembly in North America, using data from National Highway 
Traffic Safety Administration (NHTSA) and the Environmental Protection 
Agency (EPA). Please see below for the DOE's published list of electric 
vehicles (EVs) and plug-in electric vehicles (PHEVs) made in North 
America, as of October 6, 2022. (``X'' symbol is used to indicate 
vehicle models that were ineligible for the credit before passage of 
the Inflation Reduction Act).


----------------------------------------------------------------------------------------------------------------
          Model Year                             Vehicle                    Manufacturer Sales Cap to be Lifted
----------------------------------------------------------------------------------------------------------------
2022                                                             Audi Q5
----------------------------------------------------------------------------------------------------------------
2022                                                            BMW 330e
----------------------------------------------------------------------------------------------------------------
2022                                                              BMW X5
----------------------------------------------------------------------------------------------------------------
2022                                                  Chevrolet Bolt EUV                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                   Chevrolet Bolt EV                                      X
----------------------------------------------------------------------------------------------------------------
2022                                              Chrysler Pacifica PHEV
----------------------------------------------------------------------------------------------------------------
2022                                                    Ford Escape PHEV
----------------------------------------------------------------------------------------------------------------
2022                                                       Ford F Series
----------------------------------------------------------------------------------------------------------------
2022                                                 Ford Mustang MACH E
----------------------------------------------------------------------------------------------------------------
2022                                                    Ford Transit Van
----------------------------------------------------------------------------------------------------------------
2022                                                   GMC Hummer Pickup                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                      GMC Hummer SUV                                      X
----------------------------------------------------------------------------------------------------------------
2022                                            Jeep Grand Cherokee PHEV
----------------------------------------------------------------------------------------------------------------
2022                                                  Jeep Wrangler PHEV
----------------------------------------------------------------------------------------------------------------
2022                                                                    Lincoln Aviator PHEV
----------------------------------------------------------------------------------------------------------------
2022                                                                    Lincoln Corsair Plug-in
----------------------------------------------------------------------------------------------------------------
2022                                                                    Lucid Air
----------------------------------------------------------------------------------------------------------------
2022                                                             Nissan Leaf
----------------------------------------------------------------------------------------------------------------
2022                                                          Rivian EDV
----------------------------------------------------------------------------------------------------------------
2022                                                          Rivian R1S
----------------------------------------------------------------------------------------------------------------
2022                                                          Rivian R1T
----------------------------------------------------------------------------------------------------------------
2022                                                       Tesla Model 3                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                       Tesla Model S                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                       Tesla Model X                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                       Tesla Model Y                                      X
----------------------------------------------------------------------------------------------------------------
2022                                                           Volvo S60
----------------------------------------------------------------------------------------------------------------
2023                                                            BMW 330e
----------------------------------------------------------------------------------------------------------------
2023                                                             Bolt EV                                      X
----------------------------------------------------------------------------------------------------------------
2023                                                           Cadillac Lyriq                                 X
----------------------------------------------------------------------------------------------------------------
2023                                            Jeep Grand Cherokee PHEV
----------------------------------------------------------------------------------------------------------------
2023                                                  Jeep Wrangler PHEV
----------------------------------------------------------------------------------------------------------------
2023                                                                    Lincoln Aviator PHEV
----------------------------------------------------------------------------------------------------------------
2023                                                    Mercedes EQS SUV
----------------------------------------------------------------------------------------------------------------
2023                                                             Nissan Leaf
----------------------------------------------------------------------------------------------------------------
Source: Department of Energy.\1\


    GM and Tesla reached the 200,000 mark before the pandemic and 
several other automakers were approaching or had recently crossed the 
threshold. Over time, fewer and fewer models would be eligible for the 
credit if Congress had not acted. IRA's elimination of the cap enabled 
consumers to gain access to the EV tax credit therefore undoubtedly 
helping to strengthen the EV market. Clearly, the number of models that 
qualify for the credit under the North American final assembly 
requirement is extensive.
---------------------------------------------------------------------------
    \1\ Department of Energy. ``Electric Vehicles with Final Assembly 
in North America'':
---------------------------------------------------------------------------
https://afdc.energy.gov/laws/electric-vehicles-for-tax-credit
    Bloomberg New Energy Finance estimates 76% of the EVs sold in the 
U.S. in the first half of 2022 would qualify for the North American 
assembly requirement.\2\ In addition to the list above, nearly all 
major automakers have announced plans to produce additional electric 
vehicles in North America. IHS Markit forecasts significant increases 
in North American battery electric vehicle (BEV) and PHEV production 
over the next decade, reaching 3.6 million vehicles in 2025 and 6.5 
million vehicles by 2029.\3\
---------------------------------------------------------------------------
    \2\ Bloomberg New Energy Finance. September 20, 2022. ``US Climate 
Law Shifts EV Race to Warp Speed,'' p. 12.
    \3\ IHS Markit. ``Light Vehicle Powertrain and Alternative 
Propulsion Forecast.''

    2. Mr. Nassar, will the Inflation Reduction Act incentivize 
additional electric vehicle deployment beyond what would have happened 
---------------------------------------------------------------------------
without the law?

    Yes, the IRA has several provisions, if properly implemented and 
enforced, that could help significantly boost U.S. EV and PHEV 
manufacturing. In addition to the EV tax credit, there are several 
other programs to note. Without this law, our domestic industry would 
fall further behind in the global EV auto market. According to 
Benchmark Mineral Intelligence, China continues to dominate these 
supply chains, including 78% of global cathode production and 91% of 
global anode production, as well as significant shares in all of the 
key minerals required for lithium-ion battery production.\4\ The 
European Union (EU) has established the European Battery Alliance to 
promote production of batteries and key components within the EU.\5\ 
South Korea is home to LG Chem, the world's largest producer of 
lithium-ion batteries for electric vehicles, and plans to triple its 
battery production.\6\ If the U.S. does not also invest in the upstream 
battery supply chain, U.S. manufacturers will continue to be dependent 
on imports, even as we build up battery cell production capacity. 
Without proper planning, our dependence on imports will become greater 
over time as EV production increases.
---------------------------------------------------------------------------
    \4\ Benchmark Mineral Intelligence. ``Infographic: China's Lithium 
Ion Battery Supply Chain Dominance'':
---------------------------------------------------------------------------
https://www.benchmarkminerals.com/membership/chinas-lithium-ion-
battery-supply-chain-dominance/
---------------------------------------------------------------------------
    \5\ EBA250. ``About EBA250'': www.eba250.com/about-EBA250?/cn-
reloaded=1
    \6\ Autoblog. ``LG Chem to triple its EV battery production 
capacity'':
---------------------------------------------------------------------------
https://www.autoblog.com/2020/10/21/lg-chem-to-triple-ev-battery-
production/

    --  The Advanced Technology Vehicles Manufacturing (ATVM) loan 
program broadly expands the number of vehicles and other modes of 
transport eligible to receive grants and execute the full $17 billion 
in remaining loan authority. Qualified sectors include ultra-efficient 
vehicles, light- and medium-duty vehicles (that meet standards), heavy-
duty vehicles (that meet standards), trains and locomotives, maritime 
vessels, aircrafts, and hyperloop technology. There is a priority on 
projects most likely to create quality jobs (legacy facilities are 
prioritized for assistance). UAW has supported the ATVM program since 
its inception over a decade and a half ago. We fought several efforts 
in Congress to strip all funding from the program.

    --  An additional $2 billion in funds are allocated for Domestic 
Manufacturing Conversion grants to support the conversion & retooling 
of existing auto manufacturing facilities to manufacture clean 
vehicles, including those at risk of closure, onshore and build 
batteries, and other advanced vehicle technologies.

    --  The Inflation Reduction Act provided $10 billion for the 48C 
tax credit to support the establishment, retooling, and expansion of 
clean energy and technology manufacturing facilities in communities 
that have lost fossil fuel energy jobs and to partially counteract the 
impacts of the carbon footprint in the area from the previous industry. 
It is prioritized for communities that have not received prior funding 
under 48C. It included $10B in tax credits to qualifying projects ($4B 
earmarked for communities impacted by coal-related loss of work) and a 
$30 billion investment in production tax credits to accelerate U.S. 
manufacturing of solar panels, wind turbines, batteries, and critical 
minerals processing are included. (Please see the list below of UAW-
represented facilities that could be impacted by the expansion of 
electrified vehicles in the short, medium, and long term.)


----------------------------------------------------------------------------------------------------------------
              Company                          City                State                   Product
----------------------------------------------------------------------------------------------------------------
Allison Transmission                            Indianapolis            IN                        Transmissions
----------------------------------------------------------------------------------------------------------------
American Axle                                         Fraser            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
American Axle                                      Royal Oak            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
American Axle                                           Troy            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Amstead Means Industries                             Saginaw            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Anderson Cook                                   Chesterfield            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Blue Ridge Pressure Casting                                 Leighton    PA     Engine & Transmission Components
----------------------------------------------------------------------------------------------------------------
Camshaft Machine                                     Jackson            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Dana                                                        Lafayette   IN              Transmission Components
----------------------------------------------------------------------------------------------------------------
Dana                                               St. Clair            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Detroit Diesel                                       Detroit            MI               Engines; Transmissions
----------------------------------------------------------------------------------------------------------------
Dura                                                 Fremont            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Eaton                                                 Auburn            IN              Transmission Components
----------------------------------------------------------------------------------------------------------------
Ford                                                        Livonia     MI                        Transmissions
----------------------------------------------------------------------------------------------------------------
Ford                                               Woodhaven            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Ford                                                   Romeo            MI                              Engines
----------------------------------------------------------------------------------------------------------------
Ford                                                Dearborn            MI                              Engines
----------------------------------------------------------------------------------------------------------------
Ford                                             Rawsonville            MI              Transmission Components
----------------------------------------------------------------------------------------------------------------
Ford                                        Sterling Heights            MI                        Transmissions
----------------------------------------------------------------------------------------------------------------
Ford                                             Sharonville            OH                        Transmissions
----------------------------------------------------------------------------------------------------------------
Ford                                                        Lima        OH                              Engines
----------------------------------------------------------------------------------------------------------------
Ford                                              Brook Park            OH                              Engines
----------------------------------------------------------------------------------------------------------------
GKN                                               Gallipolis            OH              Transmission Components
----------------------------------------------------------------------------------------------------------------
GM                                                   Bedford            IN                    Engine Components
----------------------------------------------------------------------------------------------------------------
GM                                                   Romulus            MI               Engines; Transmissions
----------------------------------------------------------------------------------------------------------------
GM                                                   Saginaw            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
GM                                              Grand Rapids            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
GM                                                  Bay City            MI     Engine & Transmission Components
----------------------------------------------------------------------------------------------------------------
GM                                                     Flint            MI                              Engines
----------------------------------------------------------------------------------------------------------------
GM                                                   Buffalo            NY                              Engines
----------------------------------------------------------------------------------------------------------------
GM                                                 Rochester            NY                    Engine Components
----------------------------------------------------------------------------------------------------------------
GM                                                    Toledo            OH                        Transmissions
----------------------------------------------------------------------------------------------------------------
GM                                                  Defiance            OH                    Engine Components
----------------------------------------------------------------------------------------------------------------
GM                                               Spring Hill            TN                              Engines
----------------------------------------------------------------------------------------------------------------
GT Technologies                                       Toledo            OH                    Engine Components
----------------------------------------------------------------------------------------------------------------
GT Technologies                                     Defiance            OH                    Engine Components
----------------------------------------------------------------------------------------------------------------
Hastings Manufacturing                              Hastings            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Huron Manufacturing                                         Lexington   MI     Engine & Transmission Components
----------------------------------------------------------------------------------------------------------------
Jones L. E. Company                                Menominee            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Kellogg Crankshaft                                   Jackson            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Kelvion Inc                                      Burkesville            KY              Transmission Components
----------------------------------------------------------------------------------------------------------------
Maclean Curtis                                       Buffalo            NY              Transmission Components
----------------------------------------------------------------------------------------------------------------
Ohio Crankshaft                                    Cleveland            OH                    Engine Components
----------------------------------------------------------------------------------------------------------------
Stellantis                                            Kokomo            IN              Engines & Transmissions
----------------------------------------------------------------------------------------------------------------
Stellantis                                            Tipton            IN                        Transmissions
----------------------------------------------------------------------------------------------------------------
Stellantis                                           Trenton            MI                              Engines
----------------------------------------------------------------------------------------------------------------
Stellantis                                            Dundee            MI                              Engines
----------------------------------------------------------------------------------------------------------------
Tenneco                                           Burlington            IA                    Engine Components
----------------------------------------------------------------------------------------------------------------
Tenneco                                               Sparta            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Tenneco                                           Greenville            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
Tenneco                                            Cambridge            OH                    Engine Components
----------------------------------------------------------------------------------------------------------------
Textron                                             Muskegon            MI                    Engine Components
----------------------------------------------------------------------------------------------------------------
ThyssenKrupp AG                                     Danville             IL                   Engine Components
----------------------------------------------------------------------------------------------------------------
Transtar--Dacco Browser                           Cookeville            TN              Transmission Components
----------------------------------------------------------------------------------------------------------------
Volvo-Mack                                        Hagerstown            MD               Engines; Transmissions
----------------------------------------------------------------------------------------------------------------


    The IRA's significant investments sends a clear signal to the 
industry and investors of our national commitment to expand our EV and 
PHEV manufacturing footprint in the U.S.

    3. Mr. Nassar, how will the Inflation Reduction Act help encourage 
automakers to invest in manufacturing vehicles that will meet the new 
standards in the Inflation Reduction Act?

    Thank you for the question. There are numerous ways that the 
Inflation Reduction Act will encourage automakers to invest in 
manufacturing electric vehicles.
    Thanks to the passage of the IRA, Chips and Science Act, and the 
Infrastructure Investment and Jobs Act (IIJA) the Biden Administration 
is now able to make a once-in-a-generation investment in domestic 
manufacturing. As the industry gradually transitions to electrified 
vehicles, automakers and battery manufacturers can take advantage of a 
wide range of subsidies, including:

      The IRA's 30D Clean Vehicles Consumer Tax Credit 
extension (Sec. 13401), which provides up to $7,500 per vehicle in 
savings on EVs and PHEVs with the new North America final assembly 
requirement.

      The BIL's Battery Material Processing Grants (Sec. 
40207(b)) and Battery Manufacturing and Recycling Grants (Sec. 
40207(c)) provide $6 billion in grants to invest in domestic battery 
production.

      The IRA expands the Department of Energy's Advanced 
Technology Vehicle Manufacturing (ATVM) by lifting the loan program cap 
and appropriating $3 billion fund direct loans (Sec. 50142). With these 
changes, the ATVM program now has $55 billion in loan authority for 
low-interest loans for clean vehicle manufacturing investments.\7\
---------------------------------------------------------------------------
    \7\ Department of Energy, Loan Program Office. ``Inflation 
Reduction Act of 2022'':
---------------------------------------------------------------------------
https://www.energy.gov/lpo/inflation-reduction-act-2022

      The IRA appropriates $2 billion for Domestic 
Manufacturing Conversion Grants (Sec. 50143) to support domestic 
production of EVs, PHEVs, and fuel cell vehicles.

      The IRA's 45X Advanced Manufacturing Production Credit 
(Sec. 13502) provides battery manufacturers with tax credits of $35 per 
kilowatt-hour for domestically produced battery cells and $10 per 
kilowatt-hour for battery modules. These battery production tax credits 
are worth thousands of dollars per electric vehicle and covers 
approximately one-third the cost of producing an EV battery today. The 
program further reduces the cost of battery inputs through a 10% 
production tax credit on critical battery minerals and electrode active 
materials.

      The IRA's Extension of the Advanced Energy Project Credit 
(Sec. 13501) allocates $10 billion for the 48C investment tax credit 
for advanced energy projects, including electric vehicles, components, 
and materials.

    4. On Sep. 27, 2022, the Biden-Harris Administration announced it 
approved Electric Vehicle Infrastructure Deployment Plans for all 50 
States, the District of Columbia and Puerto Rico ahead of schedule 
under the National Electric Vehicle Infrastructure Formula Program, 
established and funded by the Bipartisan Infrastructure Law. This is a 
good example of how the Inflation Reduction Act incentives will build 
on the climate investments Congress recently passed. Mr. Nassar, could 
you please elaborate on how the Bipartisan Infrastructure Law electric 
vehicle charging investments and the electric vehicle incentives in the 
Inflation Reduction Act will work together to accelerate electric 
vehicle deployment?

    The success of the electric vehicle transition in the U.S. will 
depend largely on three factors: strong consumer demand, robust 
infrastructure investments, and significant EV supply-side investments. 
The IIJA's infrastructure investments will be crucial to ensure that 
advanced vehicle technologies are built in the U.S. and create quality 
jobs for American autoworkers.
    The IIJA makes significant investments in the nation's electric 
vehicle infrastructure. IIJA contains $7.5 billion to build out a 
national network of EV chargers in the United States. A historic $5 
billion investment was included for the replacement of existing school 
buses with zero emission and clean school buses from 2022-2026.
    It is essential to have the infrastructure in place to support the 
increasing numbers of EVs on the road. EV sales have grown steadily 
over the past decade, but they still represent a small percentage of 
all vehicle sales. EVs and PHEVs combined to represent 4% of U.S. auto 
sales in 2021. In most parts of the country, EV charging infrastructure 
is inadequate, and the electrical grid might have difficulty handling 
extreme temperatures and more electricity consumption. It has been 
noted that consumers shopping for an EV have often express concerns 
about battery range and charging speed as they have a limited selection 
of models and segments. Fortunately, the Inflation Reduction Act along 
with the IIJA contain investments in the infrastructure that are needed 
to support greater EV deployment.
    Under IIJA, the $5 billion investment in electric school buses 
through the clean school bus program will allow school districts around 
the country to upgrade school's aging public-school infrastructure and 
reduce emissions from older buses. These provisions work in tandem with 
the IRA, which incentivizes companies to invest in new technologies 
including electric school buses. UAW members proudly build electric 
school buses throughout the country. To give an example, Maryland 
Montgomery County school system signed a $169 million deal in 2021 to 
lease 326 buses that are proudly built by UAW members.\8\
---------------------------------------------------------------------------
    \8\ Bloomberg, ``Biggest Electric Bus Deal in U.S. Approved in 
Maryland'':
---------------------------------------------------------------------------
https://www.bloomberg.com/news/articles/2021-02-24/biggest-electric-
school-bus-deal-in-u-s-approved-in-maryland?leadSource=uverify%20wall

    5. Climate impacts are already underway in communities across the 
country. Electric power infrastructure is especially vulnerable to 
extreme weather, as we saw with the devastation from Hurricane Ian. Mr. 
Nassar, how would the electric vehicle incentives help families 
increase their resilience to climate impacts? Could some electric 
vehicles provide backup residential energy storage?

    We are witnessing the expanding impacts of climate change in real 
time. We cannot ignore this reality and must act to better prepare 
communities for extreme weather events. Sadly, addressing climate 
change will likely become increasingly difficult as time goes on and 
air and water temperatures continue to rise.
    To be clear, I am not suggesting that recent hurricanes were 
``caused'' by climate change. At the same time, there is no denying 
that the number and strength of extreme weather and climate events, 
such as heat waves and droughts, have been on the rise and record 
temperatures continue to be shattered across the world. Higher water 
temperatures intensify hurricanes and other extreme weather events, 
such as the case with Hurricane Fiona. It hit Puerto Rico on September 
18th, causing catastrophic damage and flooding across Puerto Rico, and 
leaving more than 1.4 million people without power in the immediate 
aftermath. Again, the effects of climate change did not cause Hurricane 
Fiona to occur, but it did increase its intensity. The realities of 
climate change demand action, such as reducing emissions, and preparing 
ourselves to address the consequences of climate change by increasing 
mitigation efforts. We have a responsibility to current and future 
generations to tackle obstacles and protect ourselves and the world 
around us from the harmful and dangerous impacts of climate change.
    In terms of EVs providing back up residential energy storage, there 
is significant potential for EVs to provide back-up energy or 
contribute to grid resilience, but that technology is not yet widely 
deployed. EVs are essentially batteries on wheels. You can store energy 
in those batteries, and if EVs are equipped with something called 
vehicle-to-grid or vehicle-to-home technology, they can also be used to 
keep the lights on in emergencies.
    By using efficient electric motors and plugging into a grid using 
more renewables, plug-in electric vehicles, including PHEVs and BEVs, 
can significantly reduce greenhouse gas emissions.
    Additionally, the UAW is working with new companies to create union 
jobs, such as reaching a neutrality agreement with Forever Energy at 
its planned vanadium flow battery facility in Shreveport, LA.

    6. According to a study conducted by the BlueGreen Alliance and the 
University of Massachusetts Amherst Political Economy Research 
Institute, the Inflation Reduction Act would create more than 9 million 
good jobs during the next decade. Mr. Nassar, could you please 
elaborate on why is it important for the Federal government to invest 
to create jobs in clean energy and clean vehicle manufacturing in the 
United States where we have high road labor standards?

    The IRA is a great law for working families and retirees. In 
addition to lowering the skyrocketing costs of prescription drugs, 
investing in the U.S. manufacturing base, and addressing climate change 
by investing in low-CO2 energy sources and mitigation 
strategies, the IRA puts our country on a strong footing by creating 9 
million jobs over the next decade. The PERI study notes that of the 9 
million jobs being created by the IRA during the next decade, more than 
900,000 jobs will be part of building clean manufacturing supply chains 
and more than 400,000 jobs will be created in the electric vehicles and 
clean transportation sectors. Working families need them to be good 
union jobs.
    As more funding and tax incentives become available to companies, 
high road labor standards must be built into the process. Key 
conditions or considerations should be met. Does the company support 
workers' right to collectively bargain? Are the full-time and part-time 
workers provided family-sustaining benefits that promote economic 
security and mobility? Do the workers have a safe, healthy, and 
accessible workplace built with input from workers and their 
representatives?
    In addition, we must ensure that the investments to build vehicles 
and components are made in the communities where autoworkers are 
currently building traditional gas-powered vehicles and powertrains. We 
cannot wait for ICE jobs to be lost as we need to target new 
investments for auto manufacturing communities now. Auto manufacturing 
is central to the economy of many communities, creating community-
sustaining manufacturing jobs and stimulating economic activity in 
other sectors. Government support for EV investments should prioritize 
investments that create jobs in communities currently producing ICE 
vehicles and powertrains, hire incumbent autoworkers, and provide wages 
and benefits on par with unionized auto industry standards.
    The EV transition reinforces the continued importance of putting in 
place policies that facilitate vehicle and parts production in the 
United States and ease impediments to workers at non-union automakers 
to organize. As the nation invests in a transition to innovative 
technology, we must seize upon these opportunities to preserve and 
increase quality jobs.
    The union advantage is noteworthy. Unionized workers are more 
likely to earn more, have paid sick days and health insurance, and 
participate in a retirement plan. \9\ Policies that strengthen labor 
standards and support workers' right to collectively bargain are the 
building blocks for creating a stronger middle class. The shift to 
electric vehicles cannot come at the expense of good wages and benefits 
and it is critical that we do not leave workers behind as the industry 
transitions.
---------------------------------------------------------------------------
    \9\ Economic Policy Institute. Unions Help Reduce Disparities and 
Strengthen Our Democracy, April 2021.

    7. Mr. Nassar, you mentioned in your testimony that significant 
investments in motor vehicle and battery manufacturing have been 
announced in Tennessee, Georgia, Michigan, North Carolina, and 
Kentucky. Mr. Nas- sar, how can we ensure that many of these new jobs 
will be available in environmental justice and energy justice 
---------------------------------------------------------------------------
communities?

    Implementation, strong oversight, and vigorous enforcement will 
largely determine the success of the Inflation Reduction Act. The law 
includes support for communities' long-standing fight for clean air, 
climate resilience, and environmental justice. These investments will 
create about 150,000 jobs over the next decade. That includes 
environmental justice grants focused on creating 30,000 jobs for 
community-led projects that address the disproportionate health and 
environmental impacts from pollution; and creating 5,000 jobs from 
investments to reduce air pollution in schools, particularly in 
environmental justice communities.
    As battery and clean vehicle production ramp up in the U.S, 
workers' must have an ability to have a voice in the workplace and 
family-sustaining wages. There are deeply troubling signs for workers 
in the developing battery supply chain. Auto companies, including union 
automakers, are often creating joint ventures or strategic partnerships 
with foreign-based battery companies. This trend can be seen in battery 
cell production, material processing, and battery recycling. The White 
House report on critical supply chains found that the quality of new 
battery industry jobs is far below the automotive powertrain jobs they 
are replacing.\10\ We have significant concerns about whether companies 
in the battery supply chain will respect workers' rights to a free and 
fair choice to join a union. The EV transition must not result in 
increased outsourcing or an erosion of job quality in the auto 
industry.
---------------------------------------------------------------------------
    \10\ The White House. June 2021. ``Building Resilient Supply 
Chains, Revitalizing American Manufacturing, and Fostering Broad-Based 
Growth'':
---------------------------------------------------------------------------
https://www.whitehouse.gov/wp-content/uploads/2021/06/100-day-supply-
chain-review-report.pdf, p. 120.

                                  [all]