The Growth of Clean Energy Industries through Climate Legislation

In the design of clean energy and climate legislation, careful attention is required to make sure competitiveness impacts—both positive and negative—on U.S. manufacturing firms are fully considered. Much of the attention to date has focused on seeking ways to avoid placing existing manufacturing firms, particularly those in energy-intensive, trade-exposed (EITE) sectors, at a competitive disadvantage to firms in the same sectors operating in countries without similar restrictions.

This paper examines ways policies can be designed to encourage the rapid growth in markets for the clean energy technologies that will be critical to reducing our emissions of greenhouse gases, to expanding economic growth at home, and to enhancing our energy security. Global demand for clean energy technologies will continue to expand as a result of a number of factors including increased demand for energy as global populations and economies grow, the need for lower- polluting sources of energy to ensure economic growth is environmentally sustainable, and the need to replace aging power plants in order to meet a wide range of air and water quality requirements. The magnitude of the challenge to develop and deploy technologies on the scale required to shift to a cleaner energy system is daunting. We are now in the critical early stages of this shift, but the race is on to see which countries will become the global suppliers of these clean energy technologies. The policies put in place  over the next few years will go a long way to determining whether clean energy technologies will become a major growth sector and job generator for the United States or whether we will become an importer of these technologies from other countries.