Three laws will triple US climate change spending over the next decade

(Credit: Unsplash)

This article is brought to you thanks to the collaboration of The European Sting with the World Economic Forum.

Author: Victoria Masterson, Senior Writer, Formative Content

  • US government spending on climate technology and clean energy will more than triple in the next 10 years under three recently introduced laws, a new report finds.
  • The Infrastructure Investment and Jobs Act, CHIPS and Science Act, and the Inflation Reduction Act include more than $500 billion of climate spending.
  • The investment will help technology projects survive so-called ‘valleys of death’, when technologies fail because of a lack of funding.

Technology at a very early stage of development – or maybe not even invented yet – will be vital for the world to combat climate change.

In the United States, policy-makers have recognized this through three recent pieces of legislation that climate experts say could also have a huge impact on the economy.

Over the next 10 years, these new laws will lead to spending of more than $500 billion on climate technology and clean energy, according to a report by clean energy research organisation RMI.

This will make the next decade of US spending in these areas more than triple what it was in 2009-17, and 15 times higher than in the 1990s and early 2000s, RMI says.

The 3 laws driving climate spending

The Infrastructure Investment and Jobs Act includes $98 billion of spending over the next decade on projects that show working examples of clean energy technology. This will include providing grant funding. The legislation will also support investment in infrastructure connected to clean energy, such as supply chains, storage and transportation.

Another law, the CHIPS and Science Act, includes $54 billion of climate-related investment that will support energy research and the commercialization of various technologies, RMI says. It will fund areas including new battery chemistry and more efficient solar panels, according to Reuters.

A third law, the Inflation Reduction Act, includes $362 billion of investment in climate and clean energy through tax relief that will encourage the adoption and integration of these technologies.

Government spending through these laws is structured to reflect the level of emissions by sector, RMI says. The biggest proportion of climate spending in 2021-22 legislation will go into the electricity, industry and transport sectors, which are also the US’ biggest greenhouse gas emitters.

Why climate spending matters

By 2050, half of the world’s solutions for cutting emissions are expected to come from technologies that are currently only in the very early stages of development, RMI notes.

About 60% of 400 technologies listed by the International Energy Agency as key to carbon neutrality globally aren’t yet commercially available.

The US government’s investment is designed to encourage the development of these clean technologies. It will also help technology projects survive multiple so-called “valleys of death” – when they fail because of a lack of funding between their development and mass adoption.

Climate change is a big focus for US government

Investing in climate technologies is part of a big push to tackle climate change by US President Joe Biden’s government.

Other moves include the launch of a Buy Clean Task Force, which is boosting US government purchases of low-carbon building materials to help create a wider market for these items. There are also initiatives to tackle emissions from sectors such as heavy industry, where such reductions are harder to achieve.

The US has committed to reaching net zero emissions by 2050.

But the Climate Action Tracker, a tool that monitors government climate action, ranks US climate efforts as “insufficient”.

It also puts US climate finance as “critically insufficient”, meaning it is the area most in need of action – and with potentially most to gain from the recent climate and clean technology investments.

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