Clean and Competitive: Opportunities for U.S. Manufacturing Leadership in the Global Low-Carbon Economy

Abstract

The United States needs an integrated national strategy to address the twin challenges of bolstering its manufacturing sector and averting climate change. Timely federal RD&D and deployment policies targeted to specific manufacturing industries could create comparative advantage, expanding domestic investment and employment.

KEY TAKEAWAYS

▪ Sincere efforts to fulfill national pledges to achieve net-zero emissions will drive a nearly complete retooling of global manufacturing.

▪ This retooling gives the United States a chance to rebuild domestic manufacturing while converting to clean production. To seize it, the federal government must act strategically and forcefully to leverage the nation’s strength in innovation.

▪ Clean hydrogen production will become a core sector of the global low-carbon economy. Focused policies could enable significant domestic investment and job creation, both in the industry itself and in hydrogen-using industries like steelmaking.

▪ Next-generation heat pumps, novel drying technologies, and related innovations will be in high demand worldwide to cut emissions from buildings and low-temperature industrial processes. Smart, targeted policies could bring their production onshore.

▪ Clean chemical manufacturing will require innovations in recycling and bio-based production. A well-funded and coordinated national program could convert U.S. strengths in this industry into durable advantages and large rural investments.

▪ Biotechnology-based proteins could displace emissions from agriculture. The United States is a global leader in this emerging industry, and a robust federal policy could help secure that position.

Keywords: industrial policy, energy policy, climate policy, hydrogen, chemicals, biotechnology