DeepSummary
In this episode, Jason Bordoff interviews Brian Deese, former director of the White House's National Economic Council, about the findings of the Clean Investment Monitor report on rising clean energy investment in the United States. Deese explains that the report found $213 billion in clean energy investment over the past year, a 37% increase from the previous year, driven largely by growth in manufacturing, particularly for electric vehicles and batteries.
Deese discusses the role of policies like the Inflation Reduction Act and infrastructure bill in driving this investment surge by using public investment to crowd in private capital for areas like clean energy where the private sector may underinvest. He distinguishes this 'industrial strategy' from traditional 'industrial policy' of the government selecting and subsidizing specific companies.
The conversation also covers challenges to implementing these policies, such as reforming utility markets, permitting delays, and the need to build resilient supply chains while being cautious about using national security rationales too broadly. Deese sees opportunities to further drive global emissions reductions by scaling financing and partnerships to deploy cost-reducing clean technologies in emerging economies.
Key Episodes Takeaways
- The U.S. saw a 37% increase in clean energy investment over the past year to $213 billion, driven largely by manufacturing for electric vehicles and batteries.
- Policies like the Inflation Reduction Act are pursuing an 'industrial strategy' to use public investment to spur private capital in areas the market may underinvest in.
- Key challenges include reforming utility markets, streamlining permitting, and building resilient supply chains while being judicious about national security rationales.
- The next priority should be scaling financing tools like development banks and carbon border policies to drive global deployment of cost-reducing clean technologies.
- Deese argues the perceived risks of 'industrial policy' are overblown compared to the economic and security benefits of strategic public investment.
- While faster implementation may increase public costs, that is by design to leverage more private capital in priority areas.
- The surge in investment spans different U.S. regions and may help revitalize communities left behind in past economic cycles.
- Sustaining long-term political durability will require continued economic benefits and making the national interests clear.
Top Episodes Quotes
- “The core of an industrial strategy, in my view, is using public investment on other tools of policy to try to crowd in private investment and build productive capacity in the economy in those areas where you believe that the private sector on its own is going to underinvest in the productive capacity we need for economic or national security needs.“ by Brian Deese
- “I've had a lot of conversations with investors who are deploying capital into clean energy in the american economy right now and sort of on the front lines of deploying capital. And one thing that has struck me about those conversations is that permitting isn't the first thing that they mention. And in most cases, the thing that they mention as being the biggest bottleneck and also the biggest dial mover is actually utility markets and the interconnections.“ by Brian Deese
- “We need to bring all of those things together. We need to deliver on them at scale and we need to make the case for why it is urgently in Americans economic and national security interest to scale that agenda.“ by Brian Deese
- “The opportunity is through more effective and creative use of us development finance, dramatic expansions of the multilateral development bank, capacity to include the World bank and some of the things that the president just proposed at the g 20, and more effective bilateral partnerships with big players like the Indians and the Indonesians, and creating a global system that actually encourages more rapid emissions reductions, which is going to require border adjustments and harmonization of border adjustments across time.“ by Brian Deese
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Episode Information
Columbia Energy Exchange
Columbia University
9/19/23
Investment is rising in America’s clean energy sector. According to the Clean Investment Monitor, a joint project of the Rhodium Group and MIT, the sector received $213 billion in new investment over the past year, a 37% increase over the previous year.
This new investment brings new challenges, such as implementing the Inflation Reduction Act (IRA), translating money into infrastructure, sustaining support for the energy transition, and fending off economic competition from abroad.
How is the surge of clean energy investment changing the American economy? What sectors and regions are benefitting the most? And what is still needed to get the U.S.on track to meet its climate goals?
This week host Jason Bordoff talks with Brian Deese about IRA implementation, green industrial strategy, and national security.
Brian was the director of the White House’s National Economic Council from 2021 to 2023. Prior to that, he served in the Office of Management and Budget and as a senior advisor to President Barack Obama, as well as global head of sustainable investing for BlackRock. Since leaving government, he has taken up a post as Institute Innovation Fellow at MIT, where he plays a key role in developing the Clean Investment Monitor.