Six months really isn’t a lot of time.
It typically takes six to eight months to find or fill a management-level job. Getting building permits can take that long or longer. Plant an apple or cherry tree today and it’s unlikely to bear fruit for another three to five years.
So, to see how quickly federal climate and clean energy policies are already creating jobs, driving economic growth and revolutionizing our economy is almost mind-boggling.
In the six months since President Biden signed the Inflation Reduction Act (IRA) into law, private companies announced at least $64 billion in new investments into more than 130 new clean energy projects that are expected to create more than 53,000 new, good-paying jobs, according to clean energy announcements tracked by my organization, E2.
In February alone, more than 20 new clean energy projects were announced in 15 states that will create at least 9,500 new jobs. That’s the equivalent to one major clean energy announcement every day of the week last month (excluding weekends).
Projects announced in February include new electric vehicle (EV) battery manufacturing and recycling plants from Ford Motor Co. and Redwood Materials that will create thousands of new jobs in Nevada and Michigan; a 200-employee factory in Maine that will make energy efficient heat pump hot water heaters and big solar operations in Virginia, Texas and Tennessee that produce for consumers some of the cheapest, cleanest electricity available.
While the IRA was created and passed by Democrats, the numbers continue to show it is benefiting red states as much — if not more — than blue states. The majority of projects announced in February, in fact, were in Republican-leaning states, from Nucor’s $125 million new electric vehicle steel plant in Alabama to MSS Steel Tube’s $6 million, 130-employee solar equipment factory in Tennessee.
There’s little doubt the IRA, and alongside it, the bipartisan Infrastructure Investment and Jobs Act, is attracting and spurring these new private investments and driving this growth, fostering the biggest economic transition we’ve seen in generations.
Under the two laws, companies can get tax credits or funding if they invest their own money in clean energy projects and new manufacturing plants for products such as batteries, solar and wind energy equipment, heat pumps, electric vehicles and EV charging equipment.
Consumers and businesses can also benefit directly from tax credits for buying these products, which lowers their energy costs, spurs the market, gives companies even more incentive to invest and create jobs – and by the way, also helps combat climate change.
In announcing plans for its new $3.5 billion, 2,500-employee battery plant in Michigan, Ford CEO Jim Farley said the factory is an example of what federal policy was intended to do. “We’re growing production of EV batteries here at home, reflecting the central purpose of the Inflation Reduction Act,” he said. “That’s why it was passed.”
And we’re just getting started.
According to a recent report from the nonprofit energy and workforce group Energy Futures Initiative (EFI), the IRA will create 1.5 million new jobs by 2030 as these EV and battery makers, solar and wind companies and energy efficiency businesses continue to expand.
Investment banking firm Credit Swisse predicts overall public and private investments stemming from the policies could be nearly $1.7 trillion over the next decade — almost five times the $370 billion or so in public investments and tax credits created by the IRA. You don’t have to be an investment banker to know that’s a pretty good return on investment.
Of course, there will be road bumps and detours on the way to a cleaner economy. Not every government-backed project will succeed. But it’s clear that in just the first six months, federal climate and clean energy investments are already bearing more fruit than just about anybody could’ve expected.
Congress and the Biden administration would be wise to continue nurturing this growth, so all of America can continue to reap the economic and environmental benefits that come with them.
Bob Keefe is executive director of the national nonpartisan business group E2, and he is the author of “Climatenomics: Washington, Wall Street and the Economic Battle to Save Our Planet.” E2 tracks clean economy projects and offers a monthly clean economy newsletter.