How has US industrial policy impacted climatetech investment?

The $213 billion in new climatetech investment made over the past year seems to have had mixed results so far. 

On the Catalyst with Shayle Kann podcast this week:

In climatetech circles, the Inflation Reduction Act was a big deal. The expectation was that combined with other parts of U.S. industrial policy such as the CHIPS and Science Act and the Bipartisan Infrastructure Law, the IRA would transform the American economy and ultimately slash U.S. carbon emissions. 

We can’t see the impact on carbon emissions yet, but we can measure the initial effects on the economy. So how’s it going so far?

In this episode, Shayle talks to Trevor Houser, partner at Rhodium Group, about the organization’s new Clean Investment Monitor, a database of climatetech investments developed with the MIT Center for Energy and Environmental Policy Research. Trevor highlights three different categories of policy impacts:

  • Sectors where policy accelerated existing trends, including solar deployment and EV sales.

  • Sectors where policy catalyzed new growth that probably would not have happened otherwise, such as manufacturing, hydrogen, carbon management and sustainable aviation fuels.

  • Sectors that are declining despite policy incentives, including the deployment of wind and heat pumps.

They discuss the drivers behind these trends and cover topics, including:

  • The regional clustering of manufacturing investment and new geographic hubs.

  • The surprising growth in hydrogen made from steam methane reforming, also known as blue hydrogen.

Recommended resources:

  • Rhodium Group: Clean Investment Monitor

  • Canary: Made in the USA: Ramping up clean energy manufacturing

  • Canary: U.S. offshore wind pushes ahead despite industry turmoil

Catalyst is a co-production of Post Script Media and Canary Media.

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