Marketplace All-in-One Is the clean energy economy doomed?
May 6, 2025
Christopher Knittel, an economics professor and associate dean at MIT Sloan, explores the precarious future of America's clean energy economy under shifting political winds. He discusses how Trump’s attempts to cut climate funding jeopardize the Inflation Reduction Act and the U.S.’s ability to access clean energy resources. Knittel highlights the global pivot towards electric vehicles and renewable energy, warning that the U.S. risks falling behind. The conversation also touches on Canada’s firm stance on sovereignty and the looming REAL ID deadline.
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Uncertainty in Clean Energy Funding
- The clean energy economy faces uncertainty under the Trump administration due to potential clawbacks of Inflation Reduction Act funds.
- Tax credits have spurred investments in batteries, EVs, solar, and wind, but their future is unclear.
Clean Energy Tax Credit Politics
- Over 80% of Inflation Reduction Act tax credits benefit Republican districts.
- Some Republicans push to preserve these credits or replace them with other tax incentives to benefit their constituents.
State and Federal Policy Interdependence
- State-level clean energy policies often rely on federal tax credits to remain affordable.
- Removing federal incentives could reduce states' appetite for clean energy investment.