The U.S. government is set to spend nearly $80 billion annually on climate technology and clean energy, more than triple the amount spent yearly during the Obama administration, under three new laws.
Together, the 2021 Infrastructure Investment and Jobs Act and the recently passed CHIPS and Science Act and Inflation Reduction Act put $514 billion toward research, development, and deployment of low-carbon technologies, according to an estimate from the Rocky Mountain Institute (RMI), a clean energy think tank. That figure does not include money for curbing emissions from farming or for protecting forests and wild lands, nor does it account for ongoing spending by federal agencies on climate initiatives.
Federal spending is expected to mobilize $3.5 trillion in new capital investments, putting the U.S. on track to cut emissions by 40 percent by the end of this decade.
More than $100 billion of new federal investments will go toward boosting emerging technologies, such as carbon air capture, that are still in the research or demonstration phase, including technologies that may be too risky to attract private investors, the new analysis found. Of the more than 400 technologies that need to be widely deployed for the world to reach net-zero emissions, some 60 percent are not yet commercially available, highlighting the need for greater public investment in green technology, RMI said.
Federal climate spending will also include hundreds of billions of dollars for building out mature technologies, such as electric vehicles, and for bolstering U.S. manufacturing. The three bills include several provisions aimed at ramping up domestic production of EV batteries.
“Through the integrated efforts of these three bills, the [U.S. auto] industry now has a coherent, nearly comprehensive green industrial policy that looks likely to make U.S. producers competitive with China, help bring forward the tipping point where EVs cost as much up-front as gas-powered vehicles, and dramatically accelerates the transition to an electrified transportation sector,” the analysis said.
At the same time, the report finds a disconnect between federal investments and the sources of U.S. emissions. Roughly half of new spending will target the power sector, which accounts for just 25 percent of emissions, while just 12 percent of spending will go toward cleaning up transportation, which accounts for 27 percent of emissions.