Several landmark climate initiatives have been passed since 2021, pumping trillions into the US economy. Even though less than a month has passed since the Inflation Reduction Act was enacted, we are already seeing some of the powerful effects ripple through the economy.
President Biden ran for office on the belief that climate change was “one of the greatest threats facing our country.”
After winning the presidency, Biden immediately took action, rolling back several Trump-era environmental rollbacks and outlining his plans for a sustainable American future. In fact, on his first day in office, Biden signed Executive Order 13990 (EO 13990), titled “Protect Public Health and the Environment and Restore Science to Address the Climate Crisis.”
Since then, a key theme of the administration’s plan has been to reestablish the United States as a leader in sustainable development while investing in new technologies to create jobs and bring back manufacturing lost overseas. .
In particular, Biden is focused on mass adoption of EVs and advancing renewable energy projects. The administration is aggressively targeting 50% EV share of total U.S. vehicle sales by 2030.
Although many automakers are currently facing delays in the production of electric vehicles, recent initiatives should help reduce supply chain bottlenecks. For example, one of the biggest challenges preventing automakers from ramping up production of electric vehicles is the shortage of semiconductors, which the administration intends to alleviate.
Recent Climate Initiatives Adopted to Boost the U.S. 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 while spurring manufacturing growth. Other recently adopted climate initiatives intended to stimulate the economy:
- Infrastructure Investment and Jobs Act (IIJA) – Signed into law in November 2021, the IIJA provides $89.9 billion in funding to improve public transit with zero-emission vehicles. The bill also invests $7.5 billion in building a national 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, rebates for energy-efficient appliances and additional clean energy incentives for businesses.
These bills were signed into law less than a year (or less than a month) ago and are already showing promise. Here are some recent examples of these climate initiatives doing what they were designed to do: creating jobs and bringing manufacturing back to the United States while accelerating clean energy efforts.
Manufacture of electric vehicles and batteries
Automakers expect demand for electric vehicles to continue to climb. In particular, the Reducing Inflation Act provides tax credits for buyers of electric vehicles with the aim of making sustainable transportation affordable for everyone.
However, for an electric vehicle to be eligible, its parts must come from the United States or its free trade partners with final assembly in North America. This requirement excludes several foreign automakers from participation. As a result, several automakers have announced plans to accelerate or establish new investments in electric vehicles and battery assembly in the United States.
- Hyundai is considering accelerating its schedule for building electric vehicles in the United States. Although Hyundai was already planning a dedicated electric vehicle factory in Georgia, they aim to begin construction by the end of this year.
- Volkswagen has signed a memorandum of understanding with Canada to source EV battery components like nickel and lithium. VW says the deal will shorten its supply chain and boost sales in the United States.
- Mercedes-Benz already has a dedicated battery plant in the United States at its Georgia plant. Still, the luxury automaker says it will source 10,000 tonnes of battery-grade 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 per year.
- Panasonic has announced that its second battery cell factory will be located in Kansas, where it plans to manufacture new 4680 cells for Tesla and is considering a third large-scale battery cell factory.
- Tesla is planning a lithium refining plant in Texas, for which the electric vehicle leader has already filed an application.
And that’s only in the automotive industry. Let’s take a look at the progress made in renewable energy since the implementation of climate initiatives.
Renewable energy projects
Another main objective of the recently passed climate bills is to advance renewable energy projects. As the United States aims for a carbon-free electricity sector by 2035, renewable energy will play an important role. Meanwhile, as the costs of fossil fuels and electricity soar, renewable energy is more essential than ever for energy security and the conservation of natural resources.
- First Solar, the largest solar panel maker in the United States, announced plans to invest $1.2 billion to ramp up solar panel production. The solar panel maker also plans to upgrade three of its facilities. The CEO of First Solar says recent climate initiatives have prompted the company to redouble its efforts.
- SPI Energy, a California-based global clean energy provider, today announced that it has signed a new lease for additional facilities to expand its solar module manufacturing capacity to 2.4 GW in 2023 to meet growing demand for US-made solar modules.
Renewable energies are expected to take off in the coming years. The United States added 13.2 GW of utility-scale solar power capacity in 2021, a new annual record. Imagine what will be accomplished this year.
The developments listed above are made possible thanks to recently adopted climate initiatives. With more funds available for clean energy projects and incentives to buy sustainable options, the bills are working as intended – creating jobs and bringing manufacturing back to the United States while building a resilient energy sector for the coming.
So far, the new policies have added about 642,000 manufacturing jobs to the US economy. Global automakers are rushing to build electric vehicles in the United States, and renewable energy makers are expanding their production capacities. The new investments are also making clean, sustainable energy options available to a wider market of buyers.
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