Democrats in the U.S. House of Representatives on Aug. 12 advanced the largest energy and climate package in the nation's history, teeing up a surge in domestic clean energy investment while positioning the U.S. as a leader in the fight against global warming.

In a straight 220-207 party-line vote, Democrats passed the Inflation Reduction Act, a measure that includes nearly $370 billion in energy and climate spending over 10 years.

"Our Inflation Reduction Act is a robust cost-cutting package that meets the moment, ensuring that our families thrive and the planet survives," U.S. House Speaker Nancy Pelosi, D-Calif., said in a floor speech ahead of the bill's passage.

Climate experts estimate the sweeping law will cut U.S. economywide emissions by approximately 40% by 2030 relative to 2005 levels, putting the country within striking distance of a 50%-by-2030 commitment made under the Paris Agreement on climate change.

Among its many provisions, the Inflation Reduction Act allocates $60 billion to support domestic clean energy and transportation manufacturing. It also extends existing tax incentives for renewable energy and carbon capture and creates new tax credits for existing nuclear plants and stand-alone energy storage.

The independent research organization Resources for the Future estimated the bill will save the average U.S. household approximately $170-$220 annually on electricity bills and related goods and services over the next decade.

"Our analysis has shown that the incentives-based approach of the bill will not only reduce emissions to address climate change, but also reduce costs for electricity, providing tangible benefits for U.S. consumers during this time of rising costs," Kevin Rennert, the group's director of federal climate policy, said in a statement.

The measure also contains billions in new spending to upgrade and expand the nation's electric transmission system. Academic experts estimate the U.S. may need to double or even triple its transmission capacity to achieve Biden's broader goal of a net-zero emissions economy by midcentury.

In addition, the bill provides a $7,500 federal consumer tax credit on electric vehicle purchases from U.S. automakers that meet certain domestic sourcing and labor requirements. Transportation recently surpassed the U.S. power sector as the nation's largest source of emissions.

With Democrats clinging to narrow majorities in both chambers of Congress, the bill represents a compromise between climate hawks and moderates. It will also open up parts of Alaska and the Gulf Coast to new oil and gas production.

As part of the legislation, U.S. Sen. Joe Manchin, D-W.Va., a key negotiator on the bill, also secured a deal with Democratic leadership to hold votes on a side agreement addressing permitting reform for major energy projects.

Democrats are expected to attach that legislation to a funding bill that must pass by Sept. 30 to keep the government running.

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