How recent climate initiatives are boosting the US economy

Several key climate initiatives have been approved since 2021, injecting trillions of billions into the US economy. While it has been less than a month since the inflation reduction law went into effect, we already see some of the powerful effects spreading across the economy.

President Biden ran for office with the idea that climate change was “one of the greatest threats our country faces”.

After winning the presidency, Biden immediately stepped in, re-implementing several environmental rollbacks from the Trump era and outlining his plans for a sustainable American future. Indeed, on his first day in office, Biden signed Executive Order 13990 (EO 13990), entitled “Protecting Public Health and the Environment and Restoring Science to Address the Climate Crisis”.

Since then, one of the main themes of the administration’s plan has been to reestablish the United States as a sustainability leader, while investing in new technologies to create jobs and bring back lost production overseas.

In particular, Biden is focusing on the mass adoption of electric vehicles and the advancement of renewable energy projects. The administration is aggressively aiming for 50% of the electric vehicle share of total U.S. vehicle sales by 2030.

Source of the photovoltaic solar plant: first solar

Although many automakers are facing delays in electric vehicle production, recent initiatives should help alleviate supply chain bottlenecks. For example, one of the most significant challenges holding automakers from downsizing electric vehicle production is the shortage of semiconductors, which the administration plans to alleviate.

Recent climate initiatives have been approved to revive the US economy

The CHIPS and Science Act, passed in August, provides $ 52.7 billion for semiconductor research, development, and manufacturing to build a national supply chain by stimulating production growth. Other recently approved climate initiatives aimed at stimulating the economy:

  • Infrastructure Investment and Jobs Act (IIJA) – Entered into law in November 2021, the IIJA provides $ 89.9 billion in funding to improve public transportation with zero-emission vehicles. The bill also invests $ 7.5 billion in building a nationwide electric vehicle network.
  • Inflation Reduction Act (IRA) – Biden signed the IRA bill on August 16, which invests $ 369 billion to promote a clean and sustainable energy economy. The IRA bill includes tax credits for buyers of electric vehicles and solar installations, discounts for energy-efficient appliances, and additional clean energy incentives for businesses.

These bills were signed into law less than a year ago (or less than a month) and are already showing promising results. Here are some recent examples that show these climate initiatives are doing what they were designed for: creating jobs and bringing manufacturing back to the United States, accelerating clean energy efforts.

Production of electric vehicles and batteries

Carmakers expect demand for electric vehicles will continue to grow. In particular, the Inflation Reduction Act provides tax credits for buyers of electric vehicles in an attempt to make sustainable transport affordable for all.

Mercedes-Benz battery plant in Georgia Source: Mercedes

However, for an electric vehicle to be eligible, its parts must be sourced from the United States or its free trade partners with final assembly in North America. This requirement excludes several foreign car manufacturers from participating. As a result, several automakers have announced plans to accelerate or establish new investments for electric vehicle and battery assembly in the United States.

  • Hyundai is considering speeding up its timeline to build electric vehicles in the United States. Although Hyundai was already planning a dedicated electric vehicle plant in Georgia, they aim to begin construction by the end of this year.
  • Volkswagen has signed a Memorandum of Understanding with Canada to procure electric vehicle battery components such as nickel and lithium. VW says the deal will shorten its supply chain and boost US sales.
  • Mercedes-Benz already has a dedicated battery plant in the United States at its facility in Georgia. However, the luxury automaker says it will purchase 10,000 tons of battery lithium from Rock Tech to help it reach its goal of an all-electric portfolio after 2025.
  • Honda is partnering with LG Energy to invest $ 4.4 billion in a new battery plant in the United States with a capacity of 40 GWh annually.
  • Panasonic has announced that its second battery cell factory location will be in Kansas, where it plans to produce new 4,680 cells for Tesla and is considering a third large-scale battery cell factory.
  • Tesla is planning a lithium refining factory in Texas, for which the electric vehicle leader has already applied.

And this is only in the automotive industry. Let’s take a look at the progress of renewable energy since climate initiatives were put in place.

Renewable energy projects

Another major goal of recently passed climate bills is to advance renewable energy projects. With the United States aiming for a carbon-free electricity sector by 2035, renewables will play a significant role. Meanwhile, as the costs of fossil fuels and electricity rise, renewable energy is more crucial than ever for energy security and the conservation of natural resources.

  • First Solar, the largest solar panel manufacturer in the United States, has announced plans to invest $ 1.2 billion to accelerate solar panel production. The solar panel maker also plans to upgrade three of its facilities. First Solar’s CEO says recent climate initiatives have prompted the company to redouble its efforts.
  • SPI Energy, a California-based global clean energy provider, announced today that it has signed a new lease for additional facilities to expand its solar module production capacity to 2.4 GW in 2023 to meet growing demand. of American-made solar modules.

Renewable energy is set to take off in the coming years. The United States added 13.2 GW of industrial-scale solar power capacity in 2021, a new annual record. Imagine what will be achieved this year.

Take by Electrek

The developments listed above are made possible thanks to the recently approved climate initiatives. With more funds available for clean energy projects and incentives to purchase sustainable options, bills are working as expected, creating jobs and bringing manufacturing back to the United States, while establishing a resilient energy sector for the future.

So far, the new policies have added some 642,000 manufacturing jobs to the US economy. Global automakers are competing to build electric vehicles in the United States, and renewable energy producers are expanding production capacities. The new investments are also making clean and sustainable energy options available to a wider market of buyers.

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