At two years, GOP states benefit the most from climate law
Data DiveThe nation’s fledgling climate law is boosting the economies of mostly Republican-led states two years after it was passed, according to a new Clean Investment Monitor analysis.
Tallying the cleantech benefits of the 2022 Inflation Reduction Act (IRA), the analysis finds Nevada, Wyoming, Arizona, Tennessee and Montana are the largest recipients of clean energy and cleantech dollars relative to the size of their economies.
While the overall amount invested may be higher in other states — $94 billion in California and $69 billion in Texas — cleantech dollars make up a larger share of the overall economy in states like Nevada and Wyoming.
The Clean Investment Monitor is a joint database developed by research firm Rhodium group and Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.
Nevada has seen an upsurge in utility scale solar and storage installations and clean aviation fuel manufacturing. It also is developing mines to extract and process lithium, a mineral essential for electric vehicle batteries, according to Hannah Hess, associate director for research at the Rhodium Group’s Energy & Climate division.
Likewise, Wyoming is seeing a lot of investment in wind farms and carbon capture and management projects, she added.
Since the enactment of the IRA, the analysis finds actual government- and private-sector investments in manufacturing and deploying these clean technologies have surged to nearly half a trillion dollars ($493 billion), compared with $288 billion in the two years preceding the law.
“The law provides 10 plus years of certainty through expanded and enhanced clean energy tax credits, signaling to the business community that they can think big and make long term decisions,” John Podesta, climate advisor to the Biden administration, said in a recent press briefing.
Republican lawmakers from Nevada, Arizona, Georgia and Utah are supporting the IRA’s benefits to their states and calling on House Speaker Mike Johnson to refrain from axing the law’s clean energy tax credits even though none supported the bill’s passage. Those first three states in particular are considered battlegrounds in this presidential election cycle.
Despite the billions pouring in, cleantech manufacturing has faced hurdles from high inflation and interest rates, supply chain constraints and other economic factors.
Two in five clean manufacturing projects announced during the first year after the IRA’s passage now face delays, according to a recent Financial Times analysis. Delays are not unusual for projects of this scale, however, noted Johns Hopkins University professor Jonas Nahm.