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Tens of billions of dollars of IRA funding will now be earmarked for environmental justice

Tens of billions of dollars of IRA funding will now be earmarked for environmental justice


The Biden administration is officially folding Inflation Reduction Act programs into its environmental justice initiative.

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Joe Biden stands at a podium in front of the White House with people standing behind him.
WASHINGTON, DC - SEPTEMBER 13, 2022: (L-R) U.S. Second Gentleman Doug Emhoff, U.S. First Lady Jill Biden U.S. President Joe Biden, U.S. Vice President Kamala Harris, U.S. Speaker of the House Nancy Pelosi (D-CA) and Senate Majority Leader Chuck Schumer (D-NY), stand onstage after the conclusion of an event celebrating the passage of the Inflation Reduction Act.
Photo by Anna Moneymaker/Getty Images

As money starts to roll out for the US’s landmark clean energy and climate bill, a big chunk of the benefits will now be officially set aside for disadvantaged communities.

Programs totaling $118 billion in federal funding through the Inflation Reduction Act will now have to ensure that at least 40 percent of the benefits they produce flow into disadvantaged communities in the US. The Biden administration updated its list today of federal programs included within its Justice40 Initiative, a document it shared first with The Verge.

President Joe Biden launched the Justice40 program with an executive order in 2021. It stipulates that the “overall benefits of certain Federal investments flow to disadvantaged communities that are marginalized, underserved, and overburdened by pollution.” To be clear, that doesn’t mean that 40 percent of the funding will be designated for those groups, just the “benefits” (more on that later).

“For far too long, communities that have borne the brunt of power plant and industrial pollution have been left out and left behind.”

The list of federal programs covered by the initiative includes — for the first time — measures funded through the Inflation Reduction Act (IRA) passed last year. Altogether, the 74 new IRA programs represent $118 billion in federal funding. That includes programs aimed at reducing pollution, promoting clean energy and workforce development, restoring habitats, and helping communities adapt to the consequences of climate change like more intense heatwaves and wildfire seasons.

The IRA outlines $369 billion in new spending for clean energy and climate programs, the biggest such investment the US has made to date. Much of the funding is in the form of tax credits for clean energy, which won’t be subject to the Justice40 Initiative. On top of speeding up deployment of clean energy technologies, the IRA was also meant to create jobs and fund measures to better protect communities from climate change.

Low-income households, Americans of color, and other groups that have been historically marginalized in the US tend to face bigger risks from pollution and climate disasters. “For far too long, communities that have borne the brunt of power plant and industrial pollution have been left out and left behind,” John Podesta, senior advisor to the president for clean energy innovation and implementation, said in a press release. Tying the Justice40 Initiative and IRA together could help change that.

Many of the efforts to end those disparities are already in the works. The Department of Housing and Urban Development’s Green and Resilient Retrofit Program, for example, is one of the IRA-funded programs that will now be part of the Justice40 Initiative. So far, it has given 1,500 low-income households $100 million for renovations to make their homes more energy-efficient and resilient to climate change.

Now, the Justice40 Initiative will hold it and other IRA programs accountable for making sure that communities that need the federal funding the most will receive at least 40 percent of the benefits.

To be sure, there has been wrangling over how the initiative decides who is “disadvantaged” and what counts as a “benefit.” The Biden administration created a Climate and Economic Justice Screening Tool to help federal agencies identify which communities might be disadvantaged based on how much pollution they’re exposed to and certain socioeconomic factors.

Racial demographics, however, aren’t included in the tool’s methodology. That provoked quick backlash this year, considering many communities of color are disproportionately affected by pollution and “natural” disasters. Black Americans are expected to face more severe impacts from climate change — including extreme temperatures, flooding, and poor air quality — compared to other demographic groups, according to a 2021 EPA report.

How the 40 percent of “benefits” from each federal program are calculated can also vary from agency to agency. It doesn’t necessarily mean that 40 percent of the money is put in communities’ hands. Instead, it might reflect the percentage of pollutants reduced or acres of green space created, for instance.

Global climate negotiations start tomorrow at a United Nations conference in Dubai. Biden is expected to skip the conference, where economically developing nations will push for environmental justice, too — particularly via funding from wealthy, more polluting countries, like the US, to make up for loss and damage they’ve suffered from climate change.