The need to address climate change remains urgent. Over the past 15 months, the U.S. Congress has passed meaningful legislation that has the potential to dramatically reduce emissions, and—importantly—allow the United States to lead in accelerating the global transition toward a net-zero economy. Three significant pieces of legislation—the Infrastructure Investment and Jobs Act (IIJA), the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, and the Inflation Reduction Act (IRA)—provide the United States with the opportunity for unprecedented investment in climate and clean-energy solutions. Estimates project that these policies could reduce U.S. net greenhouse gas emissions to 32 to 42 percent below 2005 levels in 2030. While this represents a significant down payment on the U.S. goal under the Paris Agreement—50 to 52 percent reductions below 2005 levels by 2030 and net-zero emissions by 2050—much work remains in achieving this target.
The next two years will be crucial in determining whether we can maintain that momentum and realize the promise of recent gains. Climate action, however, continues to face headwinds from the ongoing energy crisis resulting from Russia’s invasion of Ukraine, persistent inflation, supply chain disruptions, high commodity prices, and higher interest rates. Meanwhile, continuing partisan political divides provide an added layer of complexity.
Nevertheless, the private sector continues to invest in low-carbon technologies, both to reduce emissions and to capitalize on growing markets for low-carbon goods and services. Companies and the communities they operate in both stand to benefit substantially from these opportunities, but the private sector can move further and faster with targeted policy support. Policymakers will need to prioritize climate and energy policies to realize those benefits and accelerate the transition to a thriving, just, and resilient net-zero emissions economy.
Realizing the full potential of the low-carbon economy will require not only the strategic implementation of the IIJA, CHIPS Act, and IRA, but also new legislative and regulatory actions. Implemented well, these three laws will catalyze much-needed investment in low-carbon technologies, clean-energy infrastructure, and climate resilience. But they alone cannot transform the economy. Hard-to-abate sectors will require further support, including clear market signals to speed the low-carbon transition. Additionally, supply chains will need reimagining; any carbon-pricing and trade policy must align; paths to climate resilience must be defined and cleared; and our workforce will need to evolve to meet the needs of growing sectors.
This brief lays out a set of legislative and executive recommendations that fall into four major priority categories:
- Investment: Policies to drive private sector investment in clean-energy and low-carbon technologies, as well as approaches to minimize investment risk.
- Competitiveness: Policies to enhance the competitiveness of U.S. industries, particularly manufacturing, by growing domestic markets and supply chains, innovating new and exportable low-carbon technologies, and building on the U.S. carbon advantage.
- Community: Policies to empower local communities not only to prepare for the impacts of a changing climate, but to also build the necessary capacity to capitalize on emerging economic development opportunities in the low-carbon transition.
- Whole of economy: Policies to further reduce emission across the entire economy.
These recommendations have been informed through a series of discussions with companies across a wide range of sectors to identify specific legislative and regulatory approaches that can best align climate and economic objectives. What follows is a set of recommendations developed with the benefit of that input, which can help grow the U.S. economy while taking significant steps to further reduce emissions. C2ES is grateful to these companies for their contributions.
A summary factsheet of the policy priorities can be found here.
Reaching for 2030 Release Event
Feb. 28, 2023