When America Leads: Competing for the Future of Clean Energy Executive Summary
Strategic investments in clean energy technologies could yield massive and lasting benefits for the US economy by mid-century. A groundbreaking two-part report from Boston Consulting Group (BCG), commissioned by Third Way and Breakthrough Energy, demonstrates that the United States has an opportunity to create an unparalleled advantage in the global market across ten clean energy technologies, representing an estimated market value of $130 trillion dollars and driving millions of new jobs through 2050.
The first report, released in September 2022, estimated the market value, job potential, and US competitiveness in advanced nuclear, clean steel, direct air capture, electric vehicles, low carbon hydrogen, and long-duration energy storage. These six technologies could drive $60 trillion in market value through 2050 and create millions of jobs across the US.
A new and final installment from BCG estimates that four additional clean technologies — geothermal, carbon capture, utilization and storage (CCUS), offshore wind, and solar — will have a market of $70 trillion from 2020–2050. The report calls out several segments of the supply chain (described by BCG as “value chain segments”) where the US has the ability to build – or has already built – a durable competitive advantage, including project development for solar, offshore wind, and geothermal and manufacturing of equipment for all four technologies.
Combined, these two data-rich reports quantify the economic infusion that would come from betting big on America’s potential to leverage sectors where the US has or can create a competitive edge. Just as important, it identifies specific segments in these ten clean technology value chains where we should invest, so the private sector has the best chance of competing and winning for us all, creating good-paying jobs, strengthening America’s energy security, and accelerating decarbonization at home and abroad.
BCG’s analysis measures how America stacks up against our global competitors at every point in the supply chain for these rapidly growing industries. This two-part report provides estimates on carbon abatement potential, economic and jobs impacts, and the opportunity for a strong, domestic advantage for each of the ten clean technologies.
Despite a period of hollowing out, the US is poised to roar back if we leverage cleantech solutions. The BCG report provides compelling evidence that the US has the technical leadership and talent to compete in many value chain segments across clean energy technologies. Adding to this competitiveness heft is the triumvirate of legislation: the Infrastructure Investment and Jobs Act (IIJA), CHIPS and Science Act, and the Inflation Reduction Act (IRA).
Taken together, federal funding combined with private investment will scale up these technologies and reduce costs. Savings will translate into double-digit deployment growth between now and 2030.
By taking stock of America’s advantages in each technology, where we can lead, and where we should partner with allies, this study points US policymakers and industry leaders to the smartest bets on American clean energy for domestic manufacturing and exports.
In addition to the economic and strategic benefits, deploying these ten clean energy technologies across the world would reduce 30 gigatons of CO2 every year by 2050, or over 80% of today's annual CO2 emissions. That's equivalent to retiring over 85% of the coal power plants operational today. While the climate benefits would accrue around the globe, the US can put its shoulder behind developing, deploying, and exporting these technologies to get a big share of the economic benefits. But it will require quick and targeted support from policymakers to capture both the greatest emissions and the most significant economic impact.
Here are some key findings from the complete BCG report:
The United States is on track to become the dominant player in electric vehicles with a unique opportunity to lead in raw materials, battery and powertrain manufacturing, original equipment manufacturing (OEM), software development, and after-sales services.
- Strategic policy support could increase the US market share from 10% to 55% for the highly competitive value chain segments across the EV sector.1
- Building on private sector leadership, the total domestic market is estimated to reach $7-8 trillion in sales through 2050.
- The priority segments in the EV value chain could create jobs for millions of Americans—more than any other technology evaluated in the study.
Offshore wind manufacturing and installation will yield thousands of jobs in shipbuilding, components production, and more.
- The US is behind the ball, as major competitors have captured 95% of the global market already. Supporting RD&D on less-established floating offshore wind technology is one of the smartest ways to get back in the game.
- Collaborating with our trading partners will be key since we need to scale up together, drawing on each of our competitive strengths across multiple value chain segments.
- The Biden Administration has set a target of 30 GW by 2030. Along with investment and production tax credits, the US has the opportunity to meet or even exceed this capacity.
The US advanced nuclear industry that Third Way put on the map for policymakers in 2015 could become one of the largest drivers of a global expansion of nuclear reactors. America’s early leadership in intellectual property, research, and public-private partnership investments give the United States an excellent shot at competing for the $450-$550 billion potential global market. It is imperative for security as well as climate and economic reasons that the US maintains its lead in this sector.
- BCG finds a high market value potential and significant opportunity to create a competitive advantage in the manufacturing of reactor components, completed reactors, intellectual property licensing, and more.
- The proportion of the global market that US companies could capture is estimated to be 20% under a business-as-usual approach and as high as 30% if policymakers deliver the strategic support to become a market leader.
- Emerging markets are expected to have considerable growth in nuclear capacity through 2050, primarily from imports from countries like the United States.
Industries that helped build America are at the forefront of the new clean energy industrial revolution. The United States has an existing clean steel sector and a skilled workforce. It is home to some of the most productive and clean mills in the world.
- Steelmaking accounts for 10% of global carbon emissions. As companies look to decarbonize, the US market is expected to be the largest opportunity for clean steelmakers, with an expected market value of over $3 trillion in cumulative value through 2050.
- The demand for clean steel is foundational to the growth of multiple sectors and will only increase as the US builds out better roads and cleaner water systems from the infrastructure law.
- US steel is 60% less carbon intensive than Chinese steel. Currently, American steel manufacturers are not rewarded for being clean. The US needs to make this a competitive advantage to re-shore steelmaking as a crucial step to decarbonizing this global sector.
These findings show how the United States can win big by leveraging public and private sector investment to secure a competitive advantage in clean technologies, supercharge our economy, create millions of new jobs, and strengthen, stabilize, and secure our energy supply chains. Stimulating demand for clean energy technologies and carbon-free products will not only cut costs and emissions, but also scale up domestic industries that will allow America to export mature, clean energy technology at scale, bringing new economic engines to strengthen US communities.
The transition to the clean energy economy is here, and it is more economically rewarding and politically viable than we ever imagined. Big bets are often risky, but this seminal new research shows us exactly where to place our chips on the table to create significant climate and economic benefits for America and our allies.
Third Way will release additional explainers and policy recommendations for each value-chain segment highlighted in the study. Sign up for our mailing list here to ensure you receive these reports as soon as they are published.
See page 10 in the BCG report, “Potential for US Competitiveness in Emerging Clean Technologies.” 15 September 2022. https://www.thirdway.org/report/potential-for-us-competitiveness-in-emerging-clean-technologies.