As the global economy moves toward decarbonization, there are substantial market opportunities for producers of advanced energy technologies and their material suppliers. Cambridge Econometrics was commissioned by the Climate Leadership Council (CLC) to examine how supportive domestic and trade policies can strengthen the competitiveness of American manufacturers and enable the U.S. to capture a larger share of the growing markets for basic commodity manufacturing, advanced energy technologies, and decarbonization equipment.

Our analysis – carried out using our global macroeconomic model E3ME – bolsters the case that supportive domestic policy can help the U.S. capture a larger share of emerging global markets in decarbonization and clean energy technologies.

Key findings include: 

• Supportive domestic policy can significantly boost U.S. industry. Policies such as permitting reform, the continuation of bipartisan tax policies, and research support for U.S. industry can provide greater economic benefits than would be realized without policy intervention.
  
  
• Strategic policy support can help position the U.S. as a leader in emerging advanced energy technologies, where substantial investment could create positive economic impacts. Direct air capture (DAC) is a promising area of potential development given the U.S.’ potential to leverage abundant geological storage formations and low‑cost energy supplies. Other emerging energy technologies where the U.S. could take a leadership role include small modular reactors, large-scale carbon capture and sequestration, and advanced biofuels.
  

   

Economic impacts of the policies evaluated include: 

• An increase in GDP of around 0.8% by 2035 and 1.1% by 2050, compared to a business-as-usual baseline.
  
  
• An increase in net exports of metal products, chemical products, machinery and electronics, and fossil fuels and mining of around $450 billion by 2035 and $1.8 trillion by 2050.
  
  
• An increase in the U.S. share of global exports in key sectors, including metal products, chemical products, machinery and electronics, and fossil fuels and mining.