US President Joe Biden’s 2022 Inflation Reduction Act (IRA) promised $370 billion in tax credits to the renewable energy industry. Image: Unsplash/matthewhenry
Explore and monitor how Energy Transition is affecting economies, industries and global issues
Get involved with our crowdsourced digital platform to deliver impact at scale
Stay up to date:
Listen to the article
- US President Joe Biden’s 2022 Inflation Reduction Act (IRA) promised $370 billion in tax credits to the renewable energy industry.
- In the six months since the IRA came into law, more than 100,000 clean energy jobs have been created in the US as a result of almost $90 billion invested.
- The International Renewable Energy Agency predicts the sector could employ 38 million people globally by the end of the decade.
When US President Joe Biden signed the Inflation Reduction Act (IRA) into law in August 2022 it immediately released $370 billion worth of funding to provide tax credits for clean energy projects. The aim is to cut US greenhouse gas emissions by 40% below 2005 levels by the end of the decade, but what kind of impact has it had so far?
Inflation Reduction Act sparks green jobs growth
More than 100,000 ‘green jobs’ were created in the US in less than six months after the IRA was signed into law, according to new research. Non-profit Climate Power says, as of the end of January 2023, 94 clean energy projects were ongoing, representing almost $90 billion in new private-sector investments.
The wind, solar and electric vehicle (EV) sectors are creating new jobs for electricians, technicians, mechanics, construction workers and many others. The report says more than nine million green jobs could be created over the next decade.
What's the World Economic Forum doing about the transition to clean energy?
“Thanks to President Biden’s affordable clean energy plan, businesses are investing in manufacturing like never before and planning to create good paying jobs in every corner of the country,” said Lori Lodes, Executive Director of Climate Power.
“This is only the beginning – we’re months after the passage of the Inflation Reduction Act and we’re already at the precipice of a renewed manufacturing, Made in America boom… all while reducing toxic emissions that harm the health and wellbeing of our communities,” she added.
Investing across the US in green energy jobs
The report highlights several states where billions of dollars have been invested in new green jobs since the Inflation Reduction Act came into effect. These include:
- Georgia – so far $15.27 billion has been invested, which will lead to the creation of 16,627 green jobs. This includes more than $9 billion invested by Hyundai to build battery plants to supply the manufacture of EVs in the US.
- Tennessee – $10.9 billion of clean energy investment has already created 11,753 jobs. The state will see the construction of several battery plants, along with a lithium hydroxide plant, and Ford Motors has begun building a $5.6 billion EV manufacturing complex.
- Michigan – $7.2 billion is going into the economy, with the creation of 9,572 jobs in the state’s clean energy sector and potentially 167,000 more over the next 10 years. The EV charging company Flo is launching its first US manufacturing facility in the state, with plans to establish over a quarter of a million EV chargers for American drivers.
Global green energy jobs boom
In 2021, there were approximately 923,400 clean energy jobs in the US, according to the International Renewable Energy Agency (IRENA), which predicts the Inflation Reduction Act will help create millions more over the next decade.
However, the rapid rise in green jobs isn’t just happening in the US. IRENA’s Renewable Energy and Jobs: Annual Review 2022 reports that employment in renewable energy could rise to more than 38 million globally by the end of the decade. Worldwide employment in the clean energy sector grew by 700,000 from 2020-2021, reaching 12.7 million jobs, it says.
Solar provided the biggest share of renewable energy jobs at 4.3 million, while hydropower and biofuels generated 2.4 million each, and wind power provided 1.3 million new jobs. Other sectors like geothermal, heat pumps and ocean energy made up the rest of the jobs growth, IRENA says.
Creating the jobs of tomorrow
The World Economic Forum is working to highlight the importance of the green and social sectors to the future health and stability of the global economy. “The climate crisis and geopolitical tensions are accelerating the shift towards greener economies and greater energy independence. Providing a socially inclusive and environmentally sustainable economy is a key policy goal for many countries,” the Forum notes in a recent report.
Its Jobs of Tomorrow white paper series seeks to quantify the need for green and social jobs in 10 countries, by 2030, to meet inclusion and environmental ambitions. It is a call to action for governments and businesses to prioritize investment in these roles, as well as the systems that support them.
Don't miss any update on this topic
Create a free account and access your personalized content collection with our latest publications and analyses.
License and Republishing
The views expressed in this article are those of the author alone and not the World Economic Forum.
More on Energy TransitionSee all
February 29, 2024
Kate Whiting and Simon Torkington
February 22, 2024
Ameya Hadap, Thibault Villien De Gabiole and Laia Barbarà
February 20, 2024
Thea de Gallier
February 15, 2024
February 14, 2024
Thea de Gallier
February 13, 2024