“Next Generation of US Policies for Industrial Innovation” by World Resources Institute provides an overview of many industrial policy tools federal and state policymakers can use to secure the future of U.S. industries, ranging from continuation and expansion of existing tax credits, procurement policies, and grant programs to new policies, including demand-side and market-based policies. Forecasts project that industry will be the highest emitting sector in the United States by 2030. While recent legislation and programs have boosted efforts to decarbonize and bolster the competitiveness of the U.S. industrial sector, the programs must continue and additional action is needed.
The U.S. Department of Energy estimates that $700 billion to $1.1 trillion of investments will be needed to decarbonize the sector by 2050, with 60% of the needed technologies still being developed or not yet developed. Estimates show that the investment needed is 5 to 10 times more than what was included in the BIL and IRA.
The United States needs to usher in the next generation of innovative industrial policies. Each of these policies alone can achieve emissions reductions, but combining incentives and grants with demand-side levers and market-based measures can unlock synergies, speed decarbonization, and secure the future of U.S. industries. In this expert note, the authors outline three policy categories that can be implemented at the federal or state level:
- Tax credits, subsidies, and grants incentivize reducing the emissions intensity of products.
- Demand-side levers create a market for those products.
- Market-based mechanisms disincentivize use of conventional, emissions-intensive processes.
Access the note here
