With the next UN climate change conference in Sharm el-Sheikh, Egypt, the United States can participate with renewed credibility. In August, US President Joe Biden signed into law the largest US investment ever in tackling the climate crisis. The Inflation Reduction Act raises $374 billion to accelerate the deployment and lower the cost of clean energy technologies needed to replace fossil fuels.
However, US domestic action alone will not prevent the worst effects of climate change, including sea level rise, heat waves, wildfires and droughts. Developed countries are responsible for the lion’s share of historical greenhouse gas emissions. But today, developing countries are responsible for more than half of annual emissions and most of the increase in emissions. Even if the US and other developed countries implement the promises they made at the previous UN climate conference, COP26 in Glasgow, the world will remain behind on global climate goals, in part because developing countries cannot access many of the technologies necessary to release carbon Quickly. The Deinflation Act would make most of these technologies—like meltdown-resistant nuclear reactors and clean hydrogen—cheaper domestically. To bend the global emissions curve, the United States must commit to exporting these innovations to lower the cost for developing countries to switch to clean energy.
in the market
The Biden administration has pushed hard for climate action. As the presidential special envoy for climate, former Secretary of State John Kerry traveled between capitals to build momentum to lower carbon emissions. In his first week in office, Biden issued the executive order for dealing with the climate crisis at home and abroad, which directs all US government departments and agencies engaged in international work to integrate climate considerations into their policy initiatives.
But this new direction in foreign policy unfolded unevenly in practice and remained disconnected from the domestic climate agenda. That’s partly because the U.S. government has historically been bad at helping create domestic markets for the technological innovations it helps fund.. Since the United States passed the American Recovery and Reinvestment Act of 2009, The government has increased incentives for the development of clean energy industries, such as wind and solar. But only with the passage of the Inflation Reduction Act did the government really invest in expanding local clean energy production capacity. it was a long time ago. As journalist Robinson Meyer pointed out, many clean energy technologies that the United States helped create, such as solar panels, ended up being commercialized by foreign companies. The Chinese government, in particular, used forced technology transfers, intellectual property theft, and legitimate joint ventures to profit from US-funded research and development. It then offered state support for the production of these products. As a result, China exported back to the US the very technologies that the know-how created. of the USA.
God The Inflation Reduction Act, as well as the Infrastructure Investments and Jobs Act and the CHIPS and Science Act, help correct this problem by providing funding for domestic manufacturing and increasing tax credits for projects that contain sufficient domestic content—for example, US-made steel, iron, or critical minerals mined at home. As the United States strengthens international climate action, it increases the global market for climate solutions such as clean hydrogen and electric vehicles, where the United States already has several competitive advantages. Increased exports present an unprecedented opportunity for the United States to become the world’s preferred production center for clean technologies.
But the mere fact that conditions are ripe for exports does not mean they will take off. Whether American companies are able to export new and innovative technologies depends on the support of the US government, especially given the competition from other countries that recognize the same opportunity. And for These policies will last beyond Biden’s time in office, it is likely that clean energy jobs will have to multiply and pay well. In fact, to take advantage of this opportunity to generate economic growth by becoming a leader in clean energy production, the United States must change its trade diplomacy.
New climate bedding
This will require leadership from the Commerce Department, in particular The International Trade Administration, which has its own foreign service. More than 200 officers, stationed in the United States and abroad, are charged with promoting US exports. The Biden administration needs to expand its ranks and train its employees to prioritize the export of innovative green technologies, including long-lasting batteries and carbon removal that can carry emissions from the atmosphere over time. The Biden administration could use this workforce to market resources to cleantech startups and help them access one of the fastest-growing segments of the global economy. Persuading these companies to enter foreign markets quickly will ensure that American companies benefit from early entry. Such benefits would go to companies from countries that promote their national industries more aggressively.
ninthThe Commerce Department can assist the US clean energy sector by representing domestic companies and trade associations at international meetings on clean energy and climate, including upcoming United Nations conferences. There, U.S. government officials should announce export deals to signal to developing countries that U.S. companies can provide the technologies needed to achieve their clean energy plans. The Commerce Department should also encourage its commercial experts to join climate working groups and create interagency clean-tech teams. agencies to capture the opportunities opening up abroad as more countries step up to meet their climate goals.
US government policy on climate action and export promotion has operated in silos.
The Commerce Department cannot execute this strategy alone. It must work collaboratively with other departments, especially those that lead the Biden administration’s international climate work, but engage less in commercial diplomacy. To that end, the White House must develop a clean trade strategy, similar to the national security strategy, that charts the course for the entire federal government. Inter-ministerial cooperation is also needed. The Ministry of Foreign Affairs, for example, can regularly Send its embassies a market analysis conducted by the Department of Commerce, including information on updated priority sectors and supply chain segments. For example, American diplomats should be aware that Eastern European countries, wary of relying on Russia for energy, seem hungry for US nuclear reactor designs. Similar opportunities will abound—American companies may reap the benefits of the deflationary law by exporting green steel to Canada or developing geothermal projects in the Middle East and South Africa. The State Department could also deploy a senior official to champion clean-tech diplomacy and provide a one-stop shop for American companies seeking to access government resources. Relevant departments and agencies can create similar coordinator positions.
Similarly, the Biden administration should direct its export finance and development agencies to prioritize those technologies that the Inflation Reduction Act and other new legislation funds. These agencies—which include the US International Development Finance Corporation, the Export-Import Bank, and the US Trade and Development Agency—should embrace flexibility where they can. They should finance Projects beyond those that meet high local content requirements, as most emerging technologies will not clear the accepted thresholds when it comes to export support. The domestic content requirements of the Inflation Reduction Act are helpful in spurring domestic production, but bringing trade and financial support to similar standards would limit US competitiveness abroad. In the same vein, these agencies should support domestic production that enables clean energy exports that take on higher levels of technological risk. A greater focus on facilitating the export of innovative technologies would be better suited to recent domestic investments in the next generation of climate solutions.
Selling the program
The Biden administration should not expect Congress to give it more resources to fight climate change, especially since Republicans are expected to take control of the House in the midterm elections. Selling clean technology exports as a way to compete with China economically, however, is a message that may win broad support.
Historically, U.S. government policies on climate action and export promotion have operated in silos. Bringing them together could create a virtuous circle where reducing overseas emissions and creating local jobs go hand in hand. This effort could be politically durable given the bipartisan consensus around economic competitiveness and domestic manufacturing. The world stands to benefit greatly from the Biden administration’s domestic advance on tackling climate change. The United States needs to expand its climate progress globally. Without it, the U.S. could get far in meeting its domestic emissions reduction targets, but other countries could fall short.