As the US powers its journey towards net zero emissions, bold actions and innovation take center stage. Marisa Lago, Under Secretary of Commerce for International Trade, US Department of Commerce, shares how these dynamic forces are driving the country's commitment to sustainable, carbon-free progress.
How are global developments shaping the energy transition in the US?
Since day one of his presidency, when President Joseph R. Biden signed an executive order to bring the US back into the Paris Agreement, the Biden-Harris Administration has made clear that it is committed to combating the climate crisis. This will be done both at home and around the world in collaboration with our partners and allies. The US has secured historic investments and partnerships in clean energy that will help to accelerate our transition, both in the US and globally.
The Biden-Harris Administration is making bold commitments that set the US on a path towards net zero emissions. By 2030, we will reduce our net greenhouse gas pollution by 52 percent from 2005 levels. By 2025, we aim to reach 100 percent carbon pollution-free electricity. And by 2050, we strive to reach our ultimate goal of net zero emissions.
We are also committed to working alongside partners to meet our commitment to the Sustainable Development Goals by 2030. As President Biden noted during his recent speech at the 78th Session of the United Nations General Assembly, the world is on track to meet its US$100 billion climate finance pledge made under the Paris Agreement, as well as the Global Methane Pledge—now endorsed by more than 150 countries. This will help to reduce potential greenhouse gases in our atmosphere by 30 percent in this decade.
At the same time, Russia’s unprovoked war on Ukraine signalled to both the US and our partners around the world that it is imperative we accelerate the clean energy transition to promote increased energy security, independence and supply diversity.
The US is strongly committed to investing in clean energy manufacturing and deployment, diversifying energy supply chains, and accelerating innovation. All of these commitments will boost domestic energy security. Our ability to export energy supplies to our European and other partners will also be enhanced, so that we can mitigate and prevent energy crises like the one caused by Russia’s war on Ukraine.
While we look towards a decarbonised future, we recognise that traditional fossil energy is going to remain a reality for our own consumption and that of our partners and allies. This is true even as we work together to reduce global carbon emissions and transition to clean energy sources. We will continue to advance the technologies for abating fossil emissions, while also seeking to forge on with the technologies for clean energy sources.
For our part at the US Department of Commerce, we will seek to promote clean technology partnerships through initiatives like the US-Singapore Partnership for Growth and Innovation. This can lead to increased trade and investment in a sector critical to tackling climate change and advancing progress towards net zero emissions.
As we navigate towards a net zero future, what impact has the Inflation Reduction Act (IRA) had on clean energy developments and businesses in the US?
The Inflation Reduction Act (IRA) is a historic achievement for clean energy security and climate action. It represents the largest investment in climate and clean energy solutions in US history. In terms of impact, the IRA provides energy companies and investors with an unprecedented degree of certainty through the incentives, grant programmes and loan guarantees that it provides.
This means the US can afford to think bigger and be more ambitious about building a clean energy economy. We can activate entire new industries, like clean hydrogen, while supercharging existing ones such as wind and solar generation. Ultimately, we estimate that the IRA will incentivise tens to thousands of billions of dollars in private-sector investment over the next decade. This will help to drive down energy costs in the US and costs for clean energy technologies worldwide. In combination with the CHIPS Act of 2022 (which stands for "Creating Helpful Incentives to Produce Semiconductors") and the Bipartisan Infrastructure Law, the IRA will transform the investment environment for clean energy. To put it simply, there has never been a better time to invest in this critical sector.
In the year since the IRA became law, we are already seeing how this groundbreaking legislation is sparking private and public investments and unleashing a clean energy and manufacturing boom in every corner of the country. Since the IRA became law, the private sector has announced at least US$110 billion in clean energy investments in the US climate and clean tech sectors. This is through projects ranging from solar to battery, and wind. Clean energy projects in motion after the passage of the IRA are expected to create up to 1.5 million jobs by 2030. Companies have announced nearly US$13 billion in new solar-related investments across 76 manufacturing plants and more than US$100 billion in new investments up and down the battery supply chain since President Biden took office.
Foreign direct investments will also play a critical role in helping the US to attract capital and innovation that will further accelerate the clean energy transition. The US Department of Commerce’s International Trade Administration’s (ITA)’s team of investment experts can help investors from Singapore and around the world seize every available opportunity to make mutually beneficial investment deals happen across the US. Our ITA investment experts, operating under the SelectUSA brand, stand ready to assist businesses across the clean technologies spectrum and various industries seeking to invest in the US. For more information, please visit www.trade.gov/selectusa or contact us.
The US has demonstrated strong leadership to drive down the costs of emerging clean energy technologies. What role can public-private partnerships play to accelerate their widespread adoption in the region?
The climate crisis is global and cuts across nearly every segment of society, from civil society to governments and global financial institutions, to industry and innovators. We in government know that we are not equipped to address this challenge alone. Partnership with the private sector and other actors will be critical to meeting the myriad challenges that climate change poses. The private sector possesses expertise in every corner of the economy. It has substantial capacity to invest in new infrastructure, and the ingenuity to bring innovations to market—all of which make the private sector an essential partner as we work towards solutions.
A key example of how public-private partnerships are delivering results is the US Department of Commerce’s work in promoting international collaboration and removing barriers to deploying small modular reactors (SMRs). These are the next generation of civil nuclear energy. Through multilateral fora such as the AsiaPacific Economic Cooperation (APEC), US Department of Commerce subject matter experts and private-sector stakeholders are working to standardise regulations with international partners. This will help simplify and streamline the global deployment of SMRs and other emerging clean technologies.
Through initiatives like the Indo-Pacific Economic Framework for Prosperity (IPEF), we seek to leverage the opportunities presented by the clean economy transition. This will lay the foundation to tackle the more difficult climate challenges in the years to come. Specifically, we are working with IPEF partner nations to pursue our respective climate goals. This included deploying clean technologies, connecting markets through policies and standards, and facilitating investments in climate-related projects in the region.
The US and Singapore are also leveraging public-private partnerships to accomplish objectives through the US-Singapore Partnership for Growth and Innovation. We have been working with the private sector, fostering collaboration on key climate technologies, and promoting high standards in international bodies—especially as we look ahead to COP28. We were pleased to co-host a virtual workshop this past July with the Singapore Water Association to highlight technologies and best practices for coastal protection.
How is the Department of Commerce working with industry leaders to support Southeast Asia's "Energy Transition Towards a Net Zero World"?
The Net Zero World Initiative is the premiere US government initiative to accelerate the global energy transition, including in Southeast Asia. Led by the US Department of Energy and drawing upon expertise from across the US government, Net Zero World is helping to accelerate the decarbonisation of global energy systems.
For our part at the Department of Commerce, we are tapping our global network of trade professionals to connect Net Zero World partner countries—which include Singapore, Thailand, and Indonesia—with US businesses that can provide cutting-edge solutions to help meet their climate and clean energy ambitions.
Last year, alongside the Department of Energy, the Department of Commerce co-hosted the Net Zero World Industry Forum in Washington, DC. This convened government officials from partner countries and industry representatives for a day of discussion on how to engage and leverage the private sector to further the goals of this important initiative.
We also see a particularly compelling opportunity to strengthen our partnerships in the Indo-Pacific Region to advance the clean energy transition. The Clean Economy Pillar of President Biden’s IPEF will help the US and 13 other nations achieve their shift to clean energy. It will also catalyse the economic opportunities presented by the energy transition in a critical and fast-growing region.
We look forward to our upcoming roundtable, “Low Carbon Technology in Decarbonising the Energy Sector”. The Department of Commerce will be co-hosting this with the Energy Research Institute @ NTU, Nanyang Technological University, at Singapore International Energy Week 2023.
About Marisa Lago, Under Secretary of Commerce for International Trade, US Department of Commerce:
Marisa Lago is the Under Secretary of Commerce for International Trade at the US Department of Commerce. She was appointed by President Joseph R. Biden and sworn in on December 28, 2021.
Ms Lago has a distinguished career in public service with expertise in international markets, trade, financial regulation, and enforcement. Before joining the Department of Commerce, she served as Director of the New York City Department of City Planning and Chair of the City Planning Commission from 2017 to 2021. Prior to that, she worked as Assistant Secretary for International Markets and Development in the US Department of the Treasury from 2010 to 2017, and as President and CEO of the Empire State Development Corporation from 2008 to 2009.
Ms Lago received a Bachelor of Science degree in physics from The Cooper Union and her juris doctorate cum laude from Harvard Law School. She is a member of the Council on Foreign Relations and the American Law Institute. She is also a recipient of the Ellis Island Medal of Honor. Ms Lago is a strong advocate for free and fair trade and for the importance of international cooperation to address global challenges. She is committed to working with businesses, governments, and civil society to promote economic growth and prosperity for all.