Earlier this month, the Senate passed the bipartisan infrastructure bill, which included unprecedented investments in climate infrastructure. Yet the bill on its own falls short of meeting the urgency of the moment, one that UN Secretary-General António Guterres called “a code red for humanity.” Without the truly transformational complementary provisions in the $3.5 trillion budget resolution, the U.S. risks missing our climate targets while also ceding global technology competitiveness, what the White House Council of Economic Advisers calls “the 21st-century moonshot, though on a much grander scale.”
Over the past decade, our non-profit organization, Elemental Excelerator, has funded more than 100 entrepreneurs at the leading edge of cleantech innovation. These founders and companies represent the future engines of our economy, and they give us hope. They range from BlocPower, decarbonizing buildings in frontline communities, to Ampaire, already flying electrified airplanes. We know the incredible potential these companies and entrepreneurs hold, but we also know that government support is critical — including federally-funded research, incentives and supportive policies — to enable them to innovate at top speed.
The next 10 years represent a decisive decade for climate action. Not only to reduce emissions, but also to create more equitable economic growth and opportunity, as well as millions of high-quality, well-paying jobs throughout the U.S. While the world is on the cusp of transformational breakthroughs in a variety of climate and cleantech areas, neither innovation nor deployment is moving at the necessary pace to avoid climate catastrophe and significant human suffering.
According to the International Energy Agency’s 2020 report, “Tracking Clean Energy Progress,” only 16 of the 46 clean energy technologies and sectors were “on track” to achieve a net-zero emissions economy by 2050. Sectors accounting for the largest share of emissions, power and buildings, are considered “off track.” With massive gaps in existing technologies to meet that goal by 2050, the time is ripe for enhanced support from the federal government for equitable clean energy innovation and entrepreneurship.
The good news is that the energy and climate technology market is the strongest it has ever been. Cleantech investment is growing five times faster than the average growth of venture capital. In 2020, more than $4 billion of new funds were formed for the climate venture capital market, and growth is expected to accelerate this year. Climate and cleantech present a $3.5 trillion economic opportunity annually over the next 30 years, and early-stage venture capital for climate-focused companies increased 3,750 percent from 2013 to 2019.
As startups grow, they create good jobs such as installing solar and energy efficiency, working on transportation electrification, running geothermal power plants, and creating work for electricians, carpenters, accountants and other jobs in local economies. According to the Department of Energy, the energy sector added 560,000 jobs in 2020, rebounding quickly following job losses due to COVID-19. Most of these jobs are geographically specific and centered in rural and suburban areas rather than just major tech hubs. Investing in energy efficiency, clean energy deployment and other decarbonization technology creates smart jobs and new economic opportunities in places that need it the most.
Yet innovation does not occur in a vacuum. There are many well-established barriers and market failures that require remedy through well-designed policies, programs, incentives and strategies. For example, solar costs have decreased more than 70 percent in the past decade, thanks in part to supportive policies such as research funding and tax credits. In addition, policy is necessary to ensure that the benefits of innovation are distributed equitably, and in ways that redress past injustices.
Congress now has a once-in-a-generation opportunity to support innovators and entrepreneurs in communities across the country who are building the future U.S. clean energy economy at scale. The $3.5 trillion budget resolution contains the most consequential investments in climate, justice and jobs ever seen, including expanded funding for innovation, a clean electricity payment program and clean energy tax credits that will drive uptake of wind, solar and electric vehicles to reduce energy costs for regular Americans and create high-quality jobs in the process.
We urge Congress to swiftly pass both the bipartisan infrastructure bill and the $3.5 trillion budget resolution. Doing so will unleash American ingenuity, innovation and entrepreneurship, contributing to critical climate solutions and breakthroughs. In the long run, this is a modest investment that will pay dividends many times over, ensure U.S. global competitiveness in cleantech, create millions of clean energy jobs, slash pollution, and advance an equitable 100 percent clean future.
Dawn Lippert is the CEO of Elemental Excelerator, a non-profit investor on a mission to redesign the systems at the root of climate change. Lippert also serves as the director of innovation and community at Emerson Collective. She is also a board member of Climate Real Impact Solutions II, a climate-focused special-purpose acquisition company.
Aimee Barnes serves as the director of Elemental’s Policy Lab, which aims to connect entrepreneurs with policymakers and help them make policy that is responsive to and supportive of climate and social equity innovation. She previously served as senior advisor on climate change to former California Gov. Jerry Brown from 2017-2019.