'A year head start': How advocates say Illinois is in a good position for federal climate spending

The sweeping spending bill passed by Congress this month includes nearly $370 billion for energy and climate reform, making it the largest federal clean energy investment in the nation's history. Local environmental advocates and representatives say Illinois is uniquely positioned to take advantage of it.

Now headed for President Joe Biden's signature after passing the House on Friday, the Inflation Reduction Act comes about a year after the Illinois legislature passed its own historic climate law, the Climate and Equitable Jobs Act. The state law gives Illinois “a year head start” compared to other states, environmentalists said.

“Illinois is such an interesting place to be talking about this bill, because we definitely have our share of the pain from a warming climate,” said U.S. Rep. Sean Casten, pointing to extreme weather damage the state has experienced over the last decade. “But we are, I think, better positioned to capitalize on the gains from this bill than an awful lot of other states.”

Ann Mesnikoff, the federal legislative director for the Chicago-based Environmental Law and Policy Center, said the $2.6 billion for coastal restoration included in the bill will be of particular interest in Illinois, given our 63 miles of Lake Michigan shoreline.

“There's also a big investment for urban forestry, which has really been lacking over time — about $1.5 billion,” Mesnikoff said. “That could be a real opportunity for Chicago and more urban suburbs to invest in community forestry, which is important when we're dealing with heat.”

U.S. Rep. Bill Foster, a Naperville Democrat, said one Illinois industry poised to benefit from the bill is electric vehicle manufacturing — particularly with recent developments like Lion Electric Co.'s electric vehicle plant in Joliet and Hyzon Motors' hydrogen fuel cell production facility in Bolingbrook.

As solar and wind power gain traction in Illinois, Foster added, they will benefit from tax incentives for financial institutions to fund the energy storage technology needed to run a large number of wind farms and solar fields. They'll come in the form of $27 billion slated to go to a Greenhouse Gas Reduction Fund for projects that reduce or avoid emissions and other forms of air pollution.

For instance, Foster said, if a community wants to put a solar farm on some unused land nearby, the developers who want to install those solar cells “will find the banks are much friendlier because they have access to the Greenhouse Gas Reduction Fund.”

There are two such projects happening in Foster's own district. He said the funds for energy storage are vital to supporting an increase in renewable energy.

“If you're adding a small amount of variable, renewable energy to the grid, it works just fine,” Foster said. “But if you start adding more and more, then you have to come up with a plan for when you have long periods where the sky is overcast and the wind is not blowing.”

With Illinois receiving the majority of its electricity from nuclear power plants, Foster said, the state stands to also benefit from a tax incentive included in the bill called the Zero Emission Nuclear Power Production Credit.

“This will spur investment both in building new advanced nuclear reactors and continuing to operate Illinois' existing fleet of nuclear reactors,” he said.

Casten, a Downers Grove Democrat who sits on the Climate Crisis House Select Committee, said Illinois' transition from coal to primarily nuclear power, along with its investments in electric vehicle infrastructure, has set the state up for success.

“We're really at this point where a lot of the technologies that are giving us not just cleaner energy, but cheaper energy, are at a nexus in Illinois,” Casten said. “We're at a point to really capitalize on that, and that matters for the (Inflation Reduction Act).”

That's because a major crux of the new bill is tax incentives for manufacturers, utilities and consumers of clean energy technology, said Brian Gill, federal policy director at the Illinois Environmental Council.

Rather than each state receiving a formula-driven amount of funds — much like how last year's major infrastructure law operates — the states that will benefit from the “first come, first served” nature of this legislation are the ones that reach out and apply for grants, participate in programs and take advantage of the tax incentives available. These opportunities range from the state to the municipal and individual levels.

“This bill, with these tax incentives, can really supercharge what Illinois is doing and make that transition quicker, more just and easier for manufacturers to move toward renewable part production and for providers to move towards renewable energy,” Gill said.

Gill added, that because of Illinois' existing climate policy, the bureaucratic infrastructure needed to participate in the programs coming out of the bill already is in place.

“We've got kind of a year head start on a lot of other states to be able to take advantage of a lot of this money,” Gill said. “What we as the environmental community are going to do in the state over the next year is really push the state and the governor and state agencies to take advantage of as much of this money as possible.”

The 755-page bill includes more than 100 separate climate, energy and environmental justice programs, including more rebates for electric vehicle purchases and tax credits for homeowners who install home energy-efficient upgrades such as heat pumps and solar panels.

Despite the “huge step forward,” the bill falls short of the $555 billion for climate reform that Democrats originally asked for, and both advocates and representatives say the legislation is just the beginning.

Several independent models have determined the legislation would cut greenhouse gas emissions by about 40% below 2005 levels by 2030 — falling 10 percentage points short of the climate goal Biden set last year.

“There's more we have to do, but this is a huge shift in how we will tackle climate change, how we will get to a clean energy future, how we will improve energy efficiency and to some degree, reduce emissions in the transportation sector,” Mesnikoff said.

• Jenny Whidden is a Report For America corps member covering climate change and the environment for the Daily Herald. To help support her work, click here to make a tax-deductible donation.