Is the US really experiencing a boom in green energy jobs? – DW – 10/08/2024

After casting the deciding vote to pass the Inflation Reduction Act in the US Senate in August 2022, Vice President Kamala Harris touted the bill as “an historic achievement for our country that will directly benefit millions of Americans.”

Two years later, in the final weeks of her own whirlwind presidential campaign, Harris has been reminding voters about the “hundreds of thousands of high-quality clean energy jobs” and the “thriving clean energy economy” created as a result of the legislation.

“I will recommit the nation to global leadership in the sectors that will define the next century,” Harris said in late September, outlining her economic policies in the battleground state of Pennsylvania and vowing to “expand our lead in clean energy innovation and manufacturing.”

Two years later, what’s the verdict on IRA?

The Inflation Reduction Act (IRA), one of the key achievements of the Biden administration, is the largest climate investment in US history. And most analysts have said the government pledge to invest $370 billion (€330 billion) in clean energy technology, manufacturing and innovation over the next decade has already had a galvanizing effect on the national economy.

“No matter how you look at it, the IRA is a success. It could be the most transformative policy we’ve seen in recent history,” said Bob Keefe, executive director at E2, a nonprofit which advocates for environmental economic policies. He told DW by email that since the IRA was signed into law two years ago, private companies have invested at least $140 billion into more than 340 major clean energy projects across the US.

“This is all positioning America to finally compete in what’s expected to be a $20 trillion global marketplace for clean economy goods,” said Keefe. According to E2, in 2023 — the first full year of grants, loans, investments and other incentives under the IRA — 58% of all new positions created in the energy sector were green. That equates to 149,170 jobs primarily in electric vehicles, energy efficiency and renewables. 

That job growth was more than three times faster than overall US employment, according to E2’s latest Clean Jobs America report, “set[ting] the stage for the next several years as the industry begins to feel the full impact from historic investments and incentives in the IRA.”

“Government investments have definitely catalyzed private-sector investments,” said Keefe. “By creating these tax credits and other investments, by extending them for the next 10 years — and by backing them up in many cases with direct government investments — businesses now have better clarity that investing in factories, green energy projects and shifting their business models toward an electric future makes sense.”

US economy seeing ‘clean energy manufacturing boom’

Electric vehicle projects, in particular, make up more than a third of all clean economy projects announced in the past year, with the US intent on catching up with Chinese and European automakers. Recent data from the US Bureau of Labor Statistics showed that EV projects are helping to drive a 34-year high in auto manufacturing jobs. 

More than 90% of those projects are in manufacturing, which could end up swaying potential voters come November 5. Earlier this year, the National Association of Manufacturers trade advocacy group credited parts of the IRA with “support[ing] manufacturers across the United States, with direct investments and tax credits generating a major increase in manufacturing construction and jobs.”

“The overall economy is enjoying a clean energy manufacturing boom that’s creating tens of thousands of good jobs,” said Jack Conness, a policy analyst with the nonpartisan Energy Innovation think tank in San Francisco. In an email, he said the IRA has reduced inflation numbers “more than other major global economies,” kept the unemployment rate in check and pushed the US toward “finally becoming a major clean energy manufacturing player at the international level.”

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“The clean economy revolution in America created by the IRA is bringing new opportunities to communities across America — many of which were left behind by previous economic revolutions,” said Keefe.

“But even beyond these direct investments and jobs, the indirect economic benefits are huge. It takes construction workers to build factories,” he said. “Those construction workers need to eat at local restaurants and stay at local hotels and buy local supplies. Once a factory is up and running, its employees also need all of those things, and they invest their wages back into the local community.” 

Keefe said these green energy projects are expected to add more than $400 billion to US gross domestic product in the coming years, across the country — from lithium extraction operations in California to solar panel plants in Texas and factories making batteries and electric cars in the southern state of Georgia. 

“These clean economy projects are happening in almost every state. And it’s happening now,” he said.

Despite Republican threats, IRA has ‘momentum’

A recent Financial Times investigation revealed that some 40% of IRA-related projects are currently delayed or temporarily stopped, due in part to overproduction in China and uncertainty ahead of the presidential election. And critics — mostly Republicans, none of whom voted for the IRA — have jumped on the chance to call out what they see as “wasteful” spending.

But Conness pointed out that projects of this scale, which are transforming industry, can take time to become the new standard and start delivering on their initial promises.

“Big manufacturing facilities don’t turn on overnight, and IRA is still only two years old,” he said. “This process will take time, but it has been an important start to diversifying clean energy manufacturing across the entire globe.”

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And indeed, despite outward criticism of the legislation, some Republican lawmakers have called on Republican House Speaker Mike Johnson to maintain clean energy tax credits, if former President Donald Trump is reelected in November.

“Traditional red and purple states — like Georgia, North Carolina, South Carolina, Michigan, Arizona, and Indiana — are the top six recipients of IRA-related clean energy manufacturing investments,” said Conness, referring to states where the Republican Party enjoys greater support — and which could be pivotal in choosing the next president. The latest E2 report highlighted that nearly 60% of the projects announced since 2022 are in Republican congressional districts. “IRA is gaining broad support across the political spectrum,” said Conness.

And even Republican House Speaker Johnson admitted, in a recent interview with broadcaster CNBC, that making changes to the legislation would require “a scalpel and not a sledgehammer, because there’s a few provisions in there that have helped overall.”

That hasn’t stopped Trump from saying he would dismantle key provisions in the IRA, like tax credits for electric vehicles and clean energy factories, with a vow to claw back unspent funds from what he has called the “green new scam.”

Todd Stern, a special envoy for climate change under Barack Obama who helped to negotiate the 2015 Paris Climate Agreement, told DW at Climate Week NYC that clean energy definitely isn’t part of Trump’s agenda.

“But if Kamala Harris [is elected], there will be new policy measures taken to spur greater development of clean energy, purchasing of clean energy, rebates for people who buy electric vehicles,” he said.

Manufacturers, too, don’t necessarily want to change course just as the benefits of the IRA are starting to be felt. In 2023, for example, more than 3.4 million households received $8 billion in tax credits in 2023 related to energy-efficiency upgrades, according to data from the US Department of the Treasury in August.

“This demand underscores the importance of preserving these credits to bolster manufacturing competitiveness,” said Chris Phalen, vice president of domestic policy for the National Association of Manufacturers.

“As for the future of the clean economy, yes, there’s clearly momentum,” said Keefe. “But look back at what was (not) happening before the IRA, and look what’s happened since. The difference is clear — and so are the risks to our future if we don’t continue to move forward with clean energy and clean vehicles as fast as we possibly can.”

Additional reporting by Louise Osborne in New York.

Edited by: Tamsin Walker