U.S. cleantech spending benefits marginalized communities

Washington D.C. Correspondent
Source: Clean Investment Monitor, Rhodium Group and MIT CEEPR. • Community share of investments is culled from the manufacturing and energy and industry segments. The share of population is measured using U.S. 2020 Census data.

An outsized share of clean technology spending in the United States is landing in the communities hit hardest by climate impacts, unchecked pollution and coal-related job losses, according to an updated Clean Investment Monitor analysis shared exclusively with Cipher.

President Joe Biden has made climate, justice and jobs a cornerstone of his climate agenda. One goal of the 2022 Inflation Reduction Act, the most significant U.S. climate law, is ensuring federal spending on clean technologies benefits marginalized communities. Nearly two years on, the analysis shows these communities are indeed receiving a meaningful portion of the law’s tax credits and grants.

“We find that these communities are now receiving an ‘outsized share’ of national clean energy investments” since the IRA’s passage, Hannah Hess, associate director in the energy and climate group for the Rhodium Group, told Cipher by email.

The findings are based on an analysis of data in the Clean Investment Monitor, a project led by the Rhodium Group and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research.

As of March 2024, the monitor’s analysis shows clean-technology investments of $91.4 billion in disadvantaged communities, those identified by the White House climate and economic justice screening tool as economically distressed and overwhelmed by pollution.

The analysis also showed $80 billion in investments in low-income communities, where household income is below 80% of the local median income or the poverty rate is above 20%. And they found $49 billion has gone to “energy communities,” or those with properties that have been abandoned due to environmental contamination or where coal mines were closed after 1999 and coal-fired generation ended after 2009.

The chart above shows those three types of communities are receiving a higher percentage of cleantech investment than those communities represent as a percentage of the national population.

Hess noted one community affected by a coal mine closure and harmed by pollution could fall into all three categories — energy community, low-income and disadvantaged. These numbers represent the investment in each category, and not total investment — meaning some investments could be counted more than once.