How is U.S. industrial policy affecting actual climatetech investment?

In climatetech circles, the Inflation Reduction Act (IRA) was a big deal. The expectation was that, combined with other parts of U.S. industrial policy like the CHIPS and Science Act and 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 the Rhodium Group, about the organization’s new Clean Investment Monitor, a database of climatetech investments developed with the MIT Center on Energy and Environmental Policy Research. Trevor highlights three different categories of policy impacts:

• Sectors where policy accelerated existing trends, like solar deployment and EV sales.
• Sectors where policy catalyzed new growth that probably would not have happened otherwise, like in manufacturing, hydrogen, carbon management, and sustainable aviation fuels.
• Sectors that are declining despite policy incentives, like the deployment of wind and heat pumps.

They discuss the drivers behind these trends and cover topics like:

• The regional clustering of manufacturing investment and new geographic hubs, like the Southwest.
• 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: US offshore wind pushes ahead despite industry turmoil

Sign up for Latitude Media’s Frontier Forum on January 29, featuring Crux CEO Alfred Johnson, who will break down the budding market for clean energy tax credits. We’ll dissect current transactions and pricing, compare buyer and seller expectations, and look at where the market is headed in 2024.

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