The Inflation Reduction Act: A step toward strengthening resilience to drought

Climate advocates are rightly cheering the tax credits and other incentives for clean energy production in the just-passed Inflation Reduction Act (IRA).  But the last-minute addition of drought resilience funding for Western states, which helped secure the votes of U.S. Sen. Kyrsten Sinema (D-Ariz.) and other lawmakers from the region, is less noticed but especially timely.

That funding can address needs in a large swath of the United States that, along with many regions across the globe, is in some stage of drought. In the United States, the most notable of these is the climate change-fueled megadrought—the worst in 1200 years—that is threatening communities and livelihoods in the West. The federal agency tasked with overseeing the region’s water resource management is ordering a 25 percent reduction in water use by Arizona, New Mexico and Mexico starting next year.

Climate change elevates the risk of droughts like the intense megadrought in the Southwest. Now that new regions of the country are moving into drought phase, and the Western water supply is moving further into crisis mode, more urgent federal policy action is needed.

Let’s start out West, where the population is growing and water resources in the 17 states west of the Mississippi River are managed by the U.S. Bureau of Reclamation. The IRA focuses a good deal of drought-relief to these states. Here’s what communities, tribes, and businesses there can expect:

  • Much of the explicit drought relief money in the IRA, a full $4 billion, will be directed to these states over the next four years. The $4 billion will enable water conservation projects and ecosystem restoration efforts through grants and contract support. It will also compensate users for their efforts to reduce water use.
  • Emergency drought relief will be available to tribes affected by Bureau of Reclamation activities in these states, via $12.5 million in direct financial assistance.
  • Another $550 million will be available to disadvantaged communities to plan, design, and construct water-supply projects.

Drought isn’t a concern only in the U.S. West. The IRA additionally establishes resources that can benefit any drought-impacted place in the United States. For instance, the IRA will help property owners invest in energy and water efficiency. Nearly $1 billion in grant funds will be available through the Department of Housing and Urban Development for the next six years for this objective. These funds are on top of $8.3 billion in drought resilience investments provided through the 2021 bipartisan infrastructure law.

Other elements of the legislation address critical challenges and could help communities facing drought. For example, the Council on Environmental Quality will receive funding to improve data collection on the disproportionate effects of climate change, a step that should help federal, state, and local decision-makers prepare at-risk communities for a variety of climate hazards, including drought. Nearly $20 million will be channeled to various programs that help farmers prepare for climate change. In addition, a number of energy efficiency, wildfire, extreme heat, and climate adaptation planning provisions in the bill help alleviate risks in drought-ridden areas.

These steps represent good leadership from Congress, and many match C2ES’s recommendations outlined in our 2021 Federal Policy Action Plan to Accelerate Local Climate Resilience: namely, significantly increasing funding for proactive resilience, reducing barriers to funding for marginalized and low-income communities, and increasing funding for other hazards like wildfire resilience planning.

Undoubtedly, states and localities will continue to take drastic measures to alleviate the impacts of drought.  And because droughts—in particular the megadrought—have deep impacts on our agricultural system, the effects felt in that region ripple out to the rest of the country.  Without continued and expanded federal support and attention to drought resilience, people across the country could soon feel the impacts at the grocery store. Additional federal action could further position the country to adapt to drought conditions and minimize negative impacts. Notably, the National Climate Adaptation and Resilience Strategy (NCARS) Act would streamline federal strategy and resources for hazards like drought.

Nevertheless, in the face of shrinking rivers, depleted reservoirs, and low-level lakes, the funding established by the IRA comes not a moment too soon.