Jubilee Post News & Views
Dr. Seema JavedUS retreat on clean energy could yield up to $80 billion in new supply chain opportunities for markets outside the US while costing US companies up to $50 billion in lost export revenue :
In the wake of Donald J. Trump’s re-election to the US presidency this week, the Net Zero Industrial Policy Lab at Johns Hopkins University finds that the US retreat on clean energy could yield up to $80 billion in new supply chain opportunities for markets outside the US while costing US companies up to $50 billion in lost export revenue.
The Biden Administration’s investments in climate leadership across the CHIPS Act, the Bipartisan Infrastructure Law (BIL) and the Inflation Reduction Act (IRA) have shifted the landscape of US and global clean energy supply chains.
The IRA has created over $200 billion in clean energy investment inside the United States. CHIPS and the Bipartisan Infrastructure Law created new government offices to support scientific and technological development. The IRA and BIL investments are having a global impact and the countries that had strategically positioned themselves in clean energy supply chains are benefitting.
Their scenario analysis shows that US repeal of the IRA would, in the most likely scenario, harm US manufacturing and trade and create up to $80 billion in investment opportunities for other countries, including major US competitors like China. US harm would come in the form of lost factories, lost jobs, lost tax revenue, and up to $50 billion in lost exports.”
The abdication of US leadership on climate technology will hurt the United States more than it hurts other countries,” said Bentley Allan, co-director of the Net Zero Industrial Policy Lab at Johns Hopkins. “At this point, the climate transition is inevitable.
Europe, China, Japan, South Korea, and other countries have put their economies all-in on the energy transition. A Trump Presidency with a Republican-controlled House will only delay and create problems for the energy transition. It can’t prevent it, and therefore it can only harm the American public in both the short term and in the long term.”
Trump will take office on January 20 and has promised to emphasize climate change inducing fossil technologies and to deprioritize clean energy, including wind, solar, EV and battery technologies, which have grown exponentially during the current Biden administration. Authors Bentley Allan and Tim Sahay find that:
China, Korea, the EU, Morocco, Japan, India, Canada, and Mexico, among other countries, would be able to capitalize on US retreat in battery and solar supply supply chains, should the incentives under the US Inflation Reduction Act be reduced or repealed.
The report looks at three scenarios of clean energy retreat and assesses opportunities for other countries as well as lost export revenue for US companies.
A US slowdown in the deployment of and investment in clean technologies presents an opportunity for countries such as China, Brazil and India to capture its market share. Clean technology accounts for 10% of global GDP growth and the global market for six key technologies – solar PV, wind turbines, EVs, batteries, electrolysers and heat pumps – is set to reach over USD 2 trillion by 2035.
Many Global South countries are rapidly deploying renewables and already have a higher share of solar and wind in their electricity generation than the US.
Renewable infrastructure in the Global South is simpler, more easily scaled and has shorter lead times than fossil fuel infrastructure.
China is already the global leader in the manufacturing of clean tech and has announced enough clean technology capacity to supply all of the demand in the Global South. The impact of a Trump presidency for China is mixed, it could benefit from a potential reduced US’ market share of clean technologies, but is set to face prohibitive tariffs on its exports to the US market.
Other countries may benefit from US backpedalling. Brazil pulled in USD 35 billion in energy transition investment in 2023, ranking sixth globally, and India could flip from being a net importer of clean technologies to net exporter by 2035.
There’s a massive energy/industrial opportunity waiting for the Global South, and this is their moment to seize it,” said Tim Sahay, co-director of the Net Zero Industrial Policy Lab at Johns Hopkins and co-editor of The Polycrisis. “We may see a kind of reversal of what happened after the IRA passed, where key US allies and competitors will capitalize on jobs and industries, while the US ‘boils in its own oil.’ By supercharging green industrial policy globally, strong industrial powers will be able to feed the beast of US demand while growing their own clean energy base.
