Catalyzing Market-Driven Sustainability In The US

Catalyzing Market-Driven Sustainability In The US

After the 2024 US Presidential election, many have been left wondering about the election result’s impact on sustainability initiatives in the United States – particularly the fate of Inflation Reduction Act (IRA), which President-elect Trump took issue with on the campaign trail. The IRA of 2022 allocated $369 billion toward clean energy and climate initiatives, including tax credits and incentives for energy storage and manufacturing. Since April 2024, over $4 billion has been invested in renewable energy projects in southern states – with North Carolina and South Carolina leading at $1.8 billion and $1.5 billion respectively – driven largely by foreign investments seeking favourable US regulatory conditions. Battery storage has seen the largest share of this funding, with strong bipartisan support signalling a secure future for these investments.

While the impacts of Trump’s second presidency are still uncertain, America’s climate investment is safe. Here’s why:

• Climate investment has stable foundations. Federal tax incentives, like the Energy Efficient Home Improvement Credit and Residential Clean Energy Credit, are firmly established, allowing consumers and manufacturers to benefit from reliable financial support. These incentives enable homeowners to access clean energy upgrades through a combination of federal and state rebates, supporting long-term industry growth.
  
  
• ESG is at the core of corporate strategy. Corporate ESG initiatives are fuelled by investor pressure, consumer preference and operational risk management. Key frameworks like the TCFD have been widely adopted, not as regulatory requirements, but as good risk management practices that align with stakeholder expectations. Financial institutions have intensified due diligence on environmental impacts, with enhanced reporting requirements now integral to securing capital. Market forces, rather than regulatory mandates, continue to drive ESG adoption as corporations respond to investor and consumer demands for sustainable practices.
  
  
• It’s a new era for renewable innovation. Innovation in renewables – including advancements in AI, energy storage and nuclear technology – is accelerating, not because of lack of regulation but because innovation will include sustainability. The IRA incentivizes clean energy, while decentralized energy systems and microgrids represent the next frontier. Market-driven dynamics will continue to steer US sustainability initiatives, ensuring resilience in the face of policy shifts.
  
  
• Political and corporate stakeholders are aligned. The IRA benefits have extended to prominent investors – including Harold Hamm, Jared Kushner and Howard Lutnick, whose firms have invested heavily in renewable projects enabled by the IRA. This alignment of political influence with financial investment underscores the bipartisan appeal of the IRA’s economic and environmental impact.

There are multiple forces at play…
It’s important to remember that it would take an act of Congress to repeal any of this spending with a majority of 60 votes. Current House of Representative rules say a 60-vote majority is required to pass anything in US government. With Republicans holding the House, for the moment, by just one vote, they cannot afford for any representative to vote nay. Meanwhile, a coalition of 18 Republicans in the House of Representatives have already told leadership that they will caucus with the Democrats if any move is made to roll back the IRA. That coalition understands how many jobs were created, and they will lose their seats in Congress if they lose funding. Without those 18 votes, the IRA cannot be repealed. The voice of reason – and market dynamics – says that American climate policy can’t keep capitalism from saving the planet.