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The Alaskan village Kivalina is facing coastal erosion (Source: ShoreZone/Creative Commons)

USA - Tribal Provisions in the Inflation Reduction Act Address Energy, Climate Change

The Inflation Reduction Act (IRA) passed in August 2022 provides Native American tribes more than $720 million in direct spending for a range of efforts addressing energy and climate change, as well as agriculture, Indian affairs and other areas.

  • The law also offers tribes access to tax incentives not previously beneficial given the tax-exempt nature of Native American tribes.
  • Such incentives include tax deductions for increasing energy efficiency in buildings and tax credits for the production of renewable energy.

In support of transitioning to clean energy and combating climate change, Congress enacted the Inflation Reduction Act (IRA) (Pub. L. 117-169) to extend, modify and enhance many existing tax incentives, create new tax incentives, and provide funding to Tribal governments to meet their climate goals. Below, we discuss the opportunities included in the IRA that tribes should seek.

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Read also

Alaska Indigenous Communities at the Front Lines of Climate Change / RAGNHILD GRØNNING, High North News

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Direct Spending

The IRA provides more than $720 million in direct funding for Native American tribes. This funding is spread over six titles – Agriculture, Nutrition and Forestry; Commerce, Science and Transportation; Energy and Natural Resources; Environment and Public Works; Homeland Security and Governmental Affairs; and Indian Affairs.

  • Section 23001 – National Forest System Restoration and Fuels Reduction Projects. $2.15 billion for hazardous fuels reduction, vegetation management, more efficient and effective environmental reviews, and development and implementation of activities and tactics for the protection of old-growth forests on National Forest Service Lands. This section extends 638 contracting opportunities for tribes.
  • Section 23002 – Competitive Grants for Non-Federal Forest Landowners.$150 million for underserved foresters to invest in climate mitigation or forest resilience practices; $150 million for underserved foresters' participation in emerging private markets for climate mitigation and forest resilience; $100 million for small-forest landowners (fewer than 2,500 acres) to participate in emerging private markets for climate mitigation and forest resilience; $50 million to pay private forestland owners to implement forest practices based on the best available science to provide measurable increases in carbon sequestration and storage beyond customary practices on comparable land; and $100 million for grants under the wood innovation grant program under Section 8643 of the 2018 Farm Bill, including for the construction of facilities and hauling removed material to reduce hazardous fuels to locations where the material can be utilized. Grants are capped at $5 million and require a 50 percent cost share. Tribes are eligible entities for these opportunities.
  • Section 23003 – State and Private Forestry Conservation Programs. $1.5 billion in grants through the Urban and Community Forestry Assistance Program (16 U.S.C. Section 2105(c)) to tribes, and other eligible entities, for tree planting.
  • Section 40001 – Investing in Coastal Communities in Climate Resilience.$2.6 billion for direct expenditure, contracts, grants, cooperative agreements and technical assistance to tribes, and other eligible entities, for conservation, restoration and protection of coastal and marine habitats and resources, including fisheries, to prepare for climate-related events and conditions, as well as for projects that support natural resources to sustain coastal and marine resource-dependent communities.

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