The report emphasises how the Biden administration’s major climate laws including the Inflation Reduction Act (IRA), Bipartisan Infrastructure Law (BIL) and the CHIPS Act have significantly boosted the US’s role in clean energy. Through these efforts, the country is gaining ground in the global energy transition yet any rollback could open doors for foreign competitors like China to dominate the industry.
The IRA alone has sparked over $200 billion in clean energy investment within the US attracting substantial foreign investment particularly from Japan and South Korea which has fueled job growth, created new factories and expanded clean technology infrastructure.
The report highlights that foreign companies have led the way in investing through the IRA with nearly half of the investment coming from overseas. Net Zero’s report warns that a repeal would not only weaken US manufacturing but would also “harm US manufacturing and trade and create up to $80 billion in investment opportunities for other countries including major US competitors like China.”
While countries worldwide are accelerating their shift toward clean energy, China has outpaced the US in critical areas like solar and electric vehicle production with the report noting that “China will be happy to wave in the rearview mirror of one of its world-leading EVs, as US manufacturers hobble on.”
The global demand for affordable sustainable energy without supportive policies, the US would likely depend more on imported technologies and missing out on economic benefits and job growth. The report stresses that “without the IRA’s manufacturing subsidies and the BIL’s demonstration programs, more of these technologies will be imported rather than produced in the US,” a reality that would shift clean energy production and profits to other countries.
The Biden administration’s policies have also helped US allies, many of whom initially worried about an “America First” approach to industry. Over time, they’ve recognized opportunities for partnership.
The report shows that as allies partner with US companies, they bring critical resources and technology leading to mutual benefits in job creation and innovation. Without the IRA and BIL, this momentum would likely be slowed by leaving the US and its allies with a smaller share of the clean technology market.
“US harm would come in the form of lost factories, lost jobs, lost tax revenue, and up to $50 billion in lost exports,” warns the report projecting significant economic consequences from potential repeals. With policies like IRA, CHIPS and BIL, the US has made strides in regaining competitiveness in clean energy manufacturing. However, repealing these policies would slow growth in US-based projects and according to the report, allow other countries such as China, Japan, Korea, Morocco and Mexico to seize the moment and fill the gap.
The stakes in the global energy transition are high and even though the US may continue to install renewables over time without IRA and BIL support, the majority of new clean technology products will be imported. In an increasingly green global economy, the report warns, “US loss will be a gain for others.”
This report sends a critical message that the US risks forfeiting economic and technological ground to its global competitors if climate policy rollbacks occur. The investments that the IRA, CHIPS and BIL have initiated are not only helping the US compete but are also boosting innovation, job creation and supply chain security which are essential elements to long-term economic growth.
Report Credits: Net Zero
