EP.217 Ethan Zindler, Climate Counselor, U.S. Department of the Treasury
Oct 29, 2024
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Ethan Zindler, Climate Counselor at the U.S. Department of the Treasury, dives deep into the future of the U.S. energy transition. He discusses the transformative effects of the Inflation Reduction Act and its electoral implications. Zindler also explores the complexities surrounding net zero financing and the importance of ESG principles. With wit, he rates hot-button topics like nuclear energy's resurgence and humorous links between sports challenges and climate progress. Expect insights on Just Energy Transition Partnerships and their significance in emerging economies!
The Inflation Reduction Act is transforming U.S. clean energy investment by introducing tax credits that aim to democratize access for underserved communities.
As the rise of electric vehicles drives an expected 25% increase in electricity demand by 2035, balancing this need with clean energy development presents a significant challenge.
Deep dives
Role of the Treasury in Climate Policy
The Treasury Department plays a crucial role in shaping U.S. energy and climate policy by crafting regulations that influence the tax code. Recently, the Inflation Reduction Act (IRA) introduced a series of new policies aimed at promoting lower carbon energy growth in the U.S. This includes overseeing U.S. investments in international climate funds and maintaining active participation in global climate initiatives. The Climate Counselor's position was also established to coordinate climate efforts across various departments, facilitating collaboration and communication on climate policy.
Impact of the Inflation Reduction Act
The IRA is recognized as a landmark piece of legislation for advancing clean energy technology and creating economic opportunities. It introduced numerous clean energy credit provisions and stimulated nearly half a trillion dollars in investment in the 24 months following its passage. By promoting tax credit accessibility and incentivizing investments in underserved communities, the IRA aims to democratize clean energy opportunities. The ongoing effort to obtain public and private sector engagement remains critical for maximizing the benefits of these tax credits.
Managing Increasing Electricity Demand
There is a projected increase in electricity demand in the U.S., driven primarily by the rise of electric vehicles. The International Energy Agency estimates a 25% increase in electricity demand by 2035, indicating a shift from flat demand trends. The challenge lies in balancing this demand with the need for clean energy developments while addressing transmission bottlenecks. Various legislative efforts aim to facilitate this transition, underscoring the importance of sustainable infrastructure planning.
Bipartisan Support for the Inflation Reduction Act
There are concerns about the future of the IRA amidst changing political landscapes, particularly regarding potential Republican intentions to dismantle it. However, the long-term stability provided by the IRA has created significant investment flows into various districts, yielding economic benefits across sectors. Analysis indicates that a large portion of IRA funding has reached counties with lower educational and income levels, promoting equitable growth. Moving forward, maintaining bipartisan support will be essential to preserve the advancements made in clean energy investment and broader economic impacts.
In this episode of Energy Unplugged, we are delighted to welcome Ethan Zindler, Climate Counselor at the U.S. Department of the Treasury, where he leads the Treasury’s Climate Hub. Ethan joins our Head of Advisory for the UK & Ireland, Brian Potskowski, and Lizzie Bonahoom, Associate in our U.S. Research team, to discuss the current landscape and future of the U.S. energy transition, especially in light of the upcoming November 5th election.
Before joining the Treasury, Ethan served as Head of Americas at BloombergNEF (BNEF). He played a pivotal role in the creation of Climatescope, an annual public resource detailing clean energy investment conditions in emerging market economies since 2012. Ethan has also authored reports on climate and clean energy for organisations such as the Climate Investment Funds at the World Bank, the World Economic Forum, and the United Nations, among others.
Main topics include the following:
What is the progress to date for the Inflation Reduction Act (IRA) and how could the upcoming elections in the United States impact its future?
Could the costs of the IRA overshoot, given higher power demand growth driven by generative AI?
How is the United States supporting Just Energy Transition Partnerships (JETPs) and what is the outlook for delivery of their objectives?