Episode 270: John Podesta on the Inflation Reduction Act and a New American Industrial Strategy

The Biden Administration is embarking on a new approach to shape the future of American industry and create opportunities for sustainable development. Anchoring this strategic vision is a historic piece of legislation known as the Inflation Reduction Act. Today’s episode of New Security Broadcast highlights a fireside chat at a recent Wilson Center event, between John Podesta, Senior Advisor to the President for Clean Energy Innovation and Implementation, and Duncan Wood, Wilson Center Vice President for Strategy and New Initiatives. The discussion explores opportunities provided by the Inflation Reduction Act and what it means for the U.S. and its allies path towards the clean energy transition.

 

“The IRA fits with our strategy that is embedded in the Bipartisan Infrastructure Law and Chips and Science Act to try to create a better investment environment in the United States. We are open to foreign direct investment, but economies in Asia and in Europe, as well as across the globe were concerned that we were paying the most significant attention to investment in the United States. However, we have maintained dialogue with our key trading partners, and the structure of the law provides benefits to countries, particularly in the critical minerals space.”

 

“Our strategy is to see prosperous industrialization, electrification, and decarbonization of economies across the globe. One of the effects of the bill is its global reach. BCG estimated that it would reduce the cost of clean energy deployment by 25 percent globally, which is a global public good. With the U.S. making that investment and creating that cycle of investment and innovation, it brings the “green premium,” which Bill Gates emphasizes, down even further. We are seeing that solar is the cheapest new form of electricity production around the globe today. And we are going further across a range of technologies that will be crucial for hitting net zero emissions targets, such as green hydrogen and carbon capture…The President makes no apologies for using U.S. tax dollars to support investments in the United States.” 

 

“We need to adjust our investment strategies and our sustainable development strategies in order to meet that goal [net zero]. It's not the only thing we need to do, we still have a huge finance challenge, particularly with developing economies. And that will be a topic of focus and conversation at the upcoming COP. This is not just a matter of developing the best technology, for we also have to be able to finance their deployment. And, the United States has a deep responsibility to make sure it's doing its part. The President's nomination of Ajay Banga is a step in the right direction.”

 

“We have to show up…It wasn’t a lack of knowledge, but a lack of long-term strategy, that illuminated what the dependence [on China] would be like. In Europe, North America, and Asia, there is a sense that this is an intolerable alliance. China will continue to be part of the global economy, the country leads in electric vehicles etc., but, as the Ukraine war taught us, we can’t be overly dependent on one country. So, what we need to do is reduce that dependency by developing new partnerships. In Europe and the U.S., it is critical to ensure that we pay attention to labor protection, human rights violations, and transparency…The mission remains sustainable development, but includes creating pathways for clean energy development that work simultaneously on the climate problem.”

 

Photo Credit: John Podesta speaking at a recent Wilson Center event, titled The Inflation Reduction Act and the Green Deal Industrial Plan: Transatlantic Cooperation on Critical Minerals, courtesy of the Wilson Center.