During this year’s DNC, President Biden reflected on numerous accomplishments and discussed his track record. One of the signature pieces of legislation of the Biden presidency, and of Democrats in this era, is the Inflation Reduction Act, also known as the IRA. This August marked the 2-year anniversary of the landmark federal law. Our guest this week teamed up with his students to track the cumulative effects of the implementation of the IRA. Jay Turner is the Wiliam R. Kenan, Jr. Professor of Environmental Studies at Wellesley College. He’s also a historian, author on U.S. environmental politics and wrote “Charged: A History of Batteries and Lessons for a Clean Energy Future.” He joins WITHpod to discuss progress made, developments in batteries and electric energy sources, possible paths forward to reach ambitious goals and more.
Note: This is a rough transcript. Please excuse any typos.
Jay Turner: If Trump is elected, we will see more projects be put on pause. Investment is going to go away. You know, companies are going to get scared off. I also think, you know, once the election takes place and if Harris comes into office, we’ll likely see another surge of investment as kind of there’s more regulatory certainty about what’s going to go forward. But I mean, for sure, right? Republican districts have a lot to lose if the Inflation Reduction Act gets rolled back. And I think it would be unclear if that would happen, even if Trump came into office, right? This is a law. They would have to be very clever about how they move the legislation through Congress, perhaps another rescissions act, unless they held a majority in both houses and the White House. So I think it’s going to be hard to undo the Inflation Reduction Act.
Chris Hayes: Hello and welcome to “Why Is This Happening?” with me, your host, Chris Hayes.
Well, we are in the final stretch of the election here. And at the DNC, President Joe Biden, who is of course not the nominee, gave a speech on the first night of the convention, which he went through his record. And he spent a considerable amount of time on what I think is the signature piece of legislation of both the Biden presidency and I think of Democrats in this era. It’s, I think, the most significant piece of legislation since the Affordable Care Act signed under President Barack Obama in 2010. And I think may prove to be among the most important pieces of legislation ever signed by a president. I think it still has a possibility to be that. And the reason it has a possibility to be that is there’s a lot of different things in that legislation. But as we just passed the two-year anniversary of it, the most significant part of that legislation are the hundreds of billions of dollars of incentives to invest in and to buy clean energy. So it’s got incentives for people that are creating carbon-free energy and for consumers that are purchasing it and businesses that are purchasing it. And those incentives have no limit to them in the bill.
There’s no amount of money set aside. They just go out the door as the tax credits are used, which means there’s enormous potential and it has precipitated a flood of investment and consumption of these products at a time when essentially we’re at a kind of fulcrum of whether we can lever the entire economy from a fossil fuels based economy to a carbon free economy to meet the Paris goals by 2030 and for the whole world to meet those goals. And in the global context of a bunch of other nations rushing ahead towards their Paris goals, including China, which we’ll talk about a bit today, which may have actually reached peak emissions this year, which is a shocking thing to consider. It may not be this year. The future is unwritten. But there’s a lot of people who now think that China may be peaking in emissions this year and go down every year after that. There is a tremendous amount happening on the green energy side.
And I think the Inflation Reduction Act, partly because it ended up being a kind of omnibus legislation of a number of different priorities, it can be hard to know exactly what it did and why it’s so significant. It doesn’t have that kind of searing and acute salience to the Affordable Care Act, Obamacare did, right? Everyone knew about Obamacare. Everybody knew what Obamacare was about. It was about healthcare. And even if people were confused about the workings of it, which they very much were, over time came to understand what it was. The Inflation Reduction Act, I think because it has a bunch of different provisions that aren’t necessarily related to each other, that having to do with the way the reconciliation works in the Senate, doesn’t have that same kind of obvious salience for people.
And yet I think it’s wildly significant. So I’ve been following on Twitter a professor named Jay Turner, who’s a professor of environmental studies at Wellesley College. He’s also a historian. He’s written about green energy. He wrote a book called “Charged: A History of Batteries and Lessons For a Clean Energy Future.” And he’s been sort of tweeting about the fact that both he and his students have been actually getting into the weeds of the Inflation Reduction Act and trying to track what it’s doing, where the investment is going, towards what technologies that those investments and all others are doing, what the cumulative effect is. And so I thought here to understand what the significance of this piece of legislation is and can be, because I think it still is at this kind of fascinating pivot point, I wanted to reach out and have Professor Jay Turner on the program. So, Jay, welcome.
Jay Turner: Hi, Chris. Well, thanks for having me.
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Chris Hayes: So first tell me a little bit about yourself. You wrote a book about batteries. You’ve been studying environmental history for a while. What’s your sort of area of expertise?
Jay Turner: Well, I mean, the starting point for all of this work was teaching an intro class on climate change and I have long interests in climate and energy issues, but teaching this class, which I’ve been teaching for almost 20 years.
Chris Hayes: Wow.
Jay Turner: Right from the start, students know about fossil fuels. They know about the advantages of renewable energy. But batteries have always been this big question mark. People weren’t sure what the difference was between a battery in their laptop and a battery in a future electric car and the double A battery they might put into a remote control. And so I realized that thinking about batteries, not just as an engineering or a piece of technology, but historically, socially, where the materials come from, that go into them, what happens to them at end of life. That’s important work to do. And so as a historian, that’s what I started focusing on about a decade ago. And I’ve been working on this topic since then. This book came out and the Inflation Reduction Act passed and suddenly batteries had a whole new relevance that they didn’t have a decade ago.
Chris Hayes: So let’s start with the climate provisions of the Inflation Reduction Act. If you can kind of walk us through what the major ones are. We’ve talked about this a little bit with Dave Roberts on the program. But try to simplify top lines. If someone says, okay, what are the climate provisions of the Inflation Reduction Act? How would you describe?
Jay Turner: The climate provisions of the Inflation Reduction Act really hinge on the two things you highlighted right at the start, right? One is encouraging investments in manufacturing clean energy technology, right? So providing subsidies to develop the supply chains, to invest in the factories, to encourage companies to come to the U.S. to do this work. Those are key goals of the Inflation Reduction Act. Programs like the advanced manufacturing tax credit, the investment tax credit, they’re helping to make those things happen.
On the flip side of the coin though, there are significant provisions in the Inflation Reduction Act aimed at encouraging the deployment of these technologies, whether it’s a utility building a new solar farm, maybe it’s a local school that’s going to develop a new elementary school and put in a heat pump heating system, it has provisions to encourage that. It also has many consumer facing programs, whether it’s adding installation to your home or purchasing an electric car or installing solar panels on a house. So it’s really about both expanding the production of these technologies in the U.S. and about expanding the deployment and consumption of these technologies as well. So I think those are the two key pieces that add up to a really big, not especially well named law that, as you said, it’s pretty hard to keep track of, but right to caveat (ph), it’s making a huge difference.
Chris Hayes: Well, part of it too, I think has to do with a funny genealogy of how this law came to be, which is that it was immediately clear. So the Democrats held the Senate somewhat improbably on January 5, 2021, which was when both Georgia senators, Jon Ossoff and Ralph Warnock won their respective runoffs, guaranteeing the Democrats would hold the Senate under President Joe Biden. Of course, we know what happened the next day, which was the violent storm of the Capitol. And the narrowest possible majority, which was 50, they had 50 Democrats with Kamala Harris casting the tie-breaking vote. They were able to pass the American Rescue Plan, which was the first kind of, you know, sort of COVID emergency recovery relief focused. The Inflation Reduction Act didn’t happen until more than a year after that. And it was very hard to get it through, and it would never survive a filibuster because you couldn’t get 10 Republicans to vote for it. So it had to go through reconciliation. And in order to go through reconciliation, everything has to do with the budget. It’s the rule of reconciliation. And so the reason I’m giving this history is all of these provisions are tax provisions, right?
Jay Turner: That’s right. Yeah, this law passed by the narrowest of margins. And I think you maybe just to take one more step back on the history, I think one thing that really stands out about the Inflation Reduction Act is that it marked a key change in the way energy climate advocates framed what climate action meant, right? If you step back 10 years and think about that era of the Affordable Care Act, there was also big energy legislation being pushed at that time too, right? For the Obama administration, addressing climate change was a real issue.
Chris Hayes: It was called Waxman-Markey and it passed the House and died in the Senate.
Jay Turner: Yeah, for sure. The key policy lever in Waxman-Markey was a cap and trade strategy, which is really just about putting a price on carbon. It was about limits and putting a price on carbon to lower greenhouse gas emissions.
And what’s happened over the following decade, what really kind of informed the Inflation Reduction Act was moving away from putting a price on carbon, specifying specific limits on carbon emissions, and instead really focusing on framing climate and enacting policy that focused on clean energy technologies as an opportunity, right? A way to bolster a new sector of economic growth to lower the costs for consumers and to create new jobs. And so in my mind, right, the Inflation Reduction Act really marked a watershed in terms of kind of the politics and the policy of climate, which should have generated a lot more political support. And in the end, right, the Inflation Reduction Act only passes because Kamala Harris cast that vote, that tie breaking vote to get the rescission’s bill to President Biden’s desk.
Chris Hayes: Right. So the kind of all carrot, no stick approach is one major change, right? We’re not going to cap carbon, we’re not going to increase the price of that, we’re going to just make it much cheaper to do the other stuff, to invest in it, to deploy in it and to buy it, right? To invest, deploy and consume, right? And there are other changes too in just the political economy that got us to the Inflation Reduction Act, successfully getting over the hump by the narrowest of margin.
Jay Turner: Yeah, for sure. Thinking kind of big picture, right? The way labor changed its position and the way that climate energy advocates were engaging with labor interests. That’s something that also really changed over the course of a decade. Labor was suspicious of Waxman-Markey. They were worried that it was going to pull out the rug from under them in the energy industry, that jobs were going to be lost, that it was going to be a losing proposition. Whereas there was a lot of work that went into building a coalition, the Blue-Green Alliance, between labor and climate policymakers during the 2010s. That really played into how the Inflation Reduction Act was structured because it’s important to emphasize it’s not just about providing incentives to these companies to invest in manufacturing. There are a lot of benefits that are pegged to doing things that include offering prevailing wages or including apprenticeships for workers to get training both on the job and in the classroom to use domestic materials like steel, which labor unions care a lot about, and to invest in energy communities, right? Communities that might see fossil fuel investments going down. There’s a bonus if you invest on clean energy manufacturing or deployment in those energy communities. So a lot of work was going on in the Inflation Reduction Act to ensure that the benefits of the law and these programs and these investments are spread wide in America.
Chris Hayes: Right. That’s a great point I want to get into because some of the work that you’ve done is about what this actually means geographically, which I think has been super fascinating. And I think it’s just novel. I don’t think anyone else quite gone through it like you and your students have in terms of tallying all this up. But again, what I think is difficult to penetrate in people’s consciousness from a branding perspective is we’re still talking about a patchwork of tax credits. And that phrase is like the most unsexy, like repellent to the attention phrase in the world. Like it is a package of tax credits, it’s a package of tax credits. It’s also like civilizationally transformational if we do it right. But fundamentally, the Archimedean lever here is the lever we’re using to try to like basically lift the entire world is a package of tax credits. And they’re a little obscure and they’re wonky.
So I want to actually just dive into them, particularly on the manufacturing investment side, because I think people have some vague sense, oh, if I buy an electric car, I can get a rebate from the government for X thousand dollars. If I install a heat pump, I can get a rebate from the government. And I think people have a general idea how that would work. You save the receipt, you file for your taxes. The government takes that off your tax bill. It’s a credit. So if, you know, whatever the credit amounts to, say it’s $3,000, you know, if you owe the government $12,000, now you owe them $9,000, that’s $3,000 in your pocket that wouldn’t have been there.
Jay Turner: Yeah, well, let me pick up on two things.
Chris Hayes: Yeah.
Jay Turner: I mean, I think one, right, just walking through the way some of these tax credits works might be more interesting than it sounds.
Chris Hayes: Yeah.
Jay Turner: And so we started off talking about those uncapped tax credit. So let’s talk about those. And that’s something that’s new to the Inflation Reduction Act. It includes the Advanced Manufacturing Production Tax Credit. It’s section 45X, and it’s a per unit production incentive for clean energy technologies that are being manufactured in the U.S.. So this means if you’re manufacturing a solar panel or a wind turbine or an advanced battery or mining and refining critical minerals, then you can get a credit from the government based on how much you are producing. And there is no limit on this in terms of how much these are worth. There is a time limit in terms of how long they will last. They will phase out in 2032.
Chris Hayes: Let me just stop you right there. Just because I don’t think I actually understood that until you just said it. It’s not an investment. It’s actually a production credit. So like you’re going to get a per unit, per wind turbine produced, per battery produced, per solar panel produced —
Jay Turner: Yeah.
Chris Hayes: — dollar amount from the government.
Jay Turner: Right, so let’s talk about that in the case of batteries —
Chris Hayes: Right.
Jay Turner: — because it’s a really big deal in the world of battery manufacturing. So the credit amounts to up to $45 per kilowatt hour of battery storage.
Chris Hayes: Wow.
Jay Turner: And so what does that mean? Like an average car has somewhere between, an E.V., electric car, has somewhere between a 75 and 100 kilowatt hour battery. So for each one of those kilowatt hours of battery capacity, it’s a subsidy of $45. So, trying to think. Let’s put that in a little bit of context. The end of 2023, I think Bloomberg was estimating kind of worldwide, the cost to manufacture a lithium ion battery pack was $140 per kilowatt hour, okay? And so the U.S. —
Chris Hayes: Wow.
Jay Turner: — under the Inflation Reduction Act is offering $45 per kilowatt hour of battery capacity manufactured. So that incentive adds up to about a third of the cost of the battery —
Chris Hayes: Wow.
Jay Turner: Right? So —
Chris Hayes: Wow.
Jay Turner: — remember why the U.S. has become a really attractive place to invest in battery manufacturing —
Chris Hayes: Wow.
Jay Turner: Those kinds of numbers are what’s bringing big battery manufacturers from Asia to the U.S.
Chris Hayes: So let’s stay on that because I actually did not realize that was the size of the subsidy and how significant that is. So this is kind of classic industrial policy in some ways. And we know that China has subsidized industries for years and there’s been a huge battle between its competitors and China, us included, about those subsidies and whether they constitute unfair trade practices and there’s a whole trade question to have, which we can get into about subsidies as unfair trade practice, right? But let’s just talk about the effects, right? So, the U.S. announces this and the idea is, look, you can come here and start a battery manufacturing plant and make batteries at a 30 percent discount because the government will subsidize that 30 percent. And all of a sudden that math is going to pencil out for you in a way it didn’t before, right? That’s the sort of idea. Now, has that worked?
Jay Turner: Yeah.
Chris Hayes: So then the question is like, okay, well, fine, you pass it, but there might be all kinds of reasons that factories do or don’t relocate other than that math penciling out.
Jay Turner: Yeah.
Chris Hayes: So what’s happened?
Jay Turner: Well, let’s add two things to this before we get to the what’s happened part. So, I mean, just one other kind of key provision of these tax credits —
Chris Hayes: Yeah.
Jay Turner: — that’s really important to understand is that it’s not just about producing the batteries, but it’s also about encouraging people to buy the vehicles that those kinds of batteries go into. So one really important set of provisions around the E.V. tax credit is that they have supply chain requirements. The vehicle itself has to be manufactured in North America. And then over the next eight years, the percentage of the battery components and the materials that go into the batteries, that ratchets upward. And if a battery doesn’t meet that standard, then it doesn’t qualify the vehicle for the E.V. tax credit, right? So this is more reason for these companies to invest in domestic battery manufacturing because they need these domestic batteries —
Chris Hayes: Right.
Jay Turner: — to get the electric vehicles to qualify for the tax credit, right? So it means right now if you go out and buy a Chevy Blazer E.V., you’re going to get a $7,500 discount on that car because it’s, I think, manufactured in Mexico and it meets the sourcing requirements for the batteries. But if you go out and buy the brand new Kia —
Chris Hayes: EV9?
Jay Turner: — EV9.
Chris Hayes: Oh, I’ve looked at it, buddy.
Jay Turner: Yeah, the SUV. Yeah.
Chris Hayes: I know. I got my eyes on that EV9.
Jay Turner: But it has been assembled in South Korea with battery sourced from overseas. So it hasn’t been eligible for that $7,500 tax credit, but that’s going to change, right?. Kia is building a factory to manufacture the EV9 in the U.S. and I think they’ve just started production, right? So this is why these companies are investing both in the battery manufacturing and part it’s because of the production tax credit, but then it’s also because of these E.V. tax credits being pegged to the domestic supply chain. And that’s changing the economic calculus.
Chris Hayes: So that’s really important. There’s like a double hit here, right? Because you’re going to get that subsidy tax credit on the per kilowatt hour battery produced. And then there’s also the consumer subsidy on the vehicle that you sell that has the battery. So you want to basically do both.
Jay Turner: Yeah. And let’s just add one more thing in, right? You know, it’s exciting to see policy work —
Chris Hayes: Yes.
Jay Turner: — and to see policy be well designed. And it’s not as if a tax credit for purchasing an electric vehicle is new, right? We’ve had that at least since 2009 with the American Recovery and Reinvestment Act. But the earlier tax credit was just a blanket tax credit, right? Any manufacturer could get a credit for selling an E.V. to a consumer up to, I think, 200,000 cars. Like that was the program through the early 2020s. And that didn’t do anything to encourage investments in the U.S. to onshore industry, to help labor interests, to build the supply chain, right? So this new E.V. tax credit program, you know, does a lot of that work that the older system didn’t.
Chris Hayes: There’s an argument against this, right? I mean, I think the political argument for that is very strong. The political economy argument is very strong. But a kind of classic neoliberal look at this would be, this is all very inefficient from a trade perspective. You should build these batteries where they’re cheapest and both investment and labor should flow across borders to where they’re cheapest. That’s likely going to be China. Although we should note that China subsides the hell out of all this stuff too. And this is creating a whole bunch of inefficiencies fundamentally that are both making everyone poorer, right? Because the cost of all this stuff is going to be higher than it kind of should be in some market terms, but also is going to make it hard to sustain. If it’s fundamentally predicated on a set of tax credits and subsidies, as soon as those go away, it’s not going to work and what you’re going to be left with is something like the ethanol program, which is massively expensive to the U.S. government, doesn’t really have any positive economic effect, but has become such a cornerstone of the corn lobby and corn growers that you can never get rid of it. And essentially functions as this like wildly wasteful, counterproductive, destructive subsidy in perpetuity forever and ever, amen. Why is this going to be different than that if you think it is going to be different?
Jay Turner: Yeah, I share the concerns about ethanol. We can set that aside for a moment. So why is this going to be different? One, right, this is the auto industry. This is the solar industry. This is the wind energy industry, right, up against kind of entrenched fossil fuel interests. And the playing field has not been. level, right? We have provided subsidies through tax credits to investments in fossil fuels historically. And so this is an industry that is playing catch up domestically and so I think, you know, having these kinds of incentives is important on that front. It’s important in terms of the geopolitics. And, you know, these are technologies that are going to be central to 21st century economic growth and energy security, right? And the U.S. has interests that go, you know, in developing this domestically, right, to secure our national security.
And so, you know, that is a reason to subsidize this in the near term, not to mention the climate implications of this, which are super important, but also these are industries that work at scale and give companies confidence to make investments at the scale that we need to fundamentally change our energy system requires this kind of government support. And they think, what’s going to happen in 10 years? You have this manufacturing at scale, costs have come down, consumers are now taking advantage of these technologies and those subsidies aren’t necessary, right? This will be self-sustaining, perpetuating industry, but we’re not there, right? This is that fulcrum, that transition moment. And so having this kind of policy is crucial.
Chris Hayes: Yeah, that’s a great point. So there’s something dynamic here, right? This is something we talked about with Jigar Shah at the U.S. Department of Energy about sort of going from research to commercialization to mass deployment that the cost curves come down, things get more efficient. You build the first factory and it costs you 10X and the second factory might cost you seven and the third might cost you four and pretty soon you’re finding inefficiencies over time so it’s not just a static situation. And the second thing which you alluded to, which I should just note here because I was sort of playing devil’s advocate is not only is there tax incentives, depletion allowance and things like that for oil and gas. They don’t pay the cost of pollution. I mean, this is the key point, right? They’re all dumping their effluent in the river and they don’t have to pay to clean up the river and they don’t have to pay for whatever damage the polluted river does. That’s the classic sort of tragedy of the commons. The carbon, the atmosphere, they don’t pay for it. They’re polluting the atmosphere and they’re not paying for the pollution. So their product is artificially mispriced and the idea of a carbon tax or cap and trade was to put a price on that carbon. We didn’t do that, but the subsidy is a way of essentially sort of working on the other side of the ledger, right? If you’re not going to tax carbon, if you make the green stuff cheaper, you’re also getting closer to reflecting the true price of that pollution.
Jay Turner: For sure. And the strategy is working, right? So I know one of the things you wanted to talk about is what’s happening. And that’s something that I’ve really been tracking closely with my students. And the reason for this is right about the time that book I wrote on “Charge: A History of Batteries and Lessons for a Clean Energy Future” right as about the time it came out, it just became clear that companies are starting to make investments in E.V. manufacturing and battery manufacturing to the point that like, it seemed like a press release was starting to come out every other day. And, you know, as someone who follows this closely, I was starting to feel overwhelmed. Like I couldn’t keep up. And so, you know, I said to a student —
Chris Hayes: Wow.
Jay Turner: — maybe we should just like build a spreadsheet and just start writing all of this stuff down and just start tracking all of these announcements. And so that was kind of the genesis of this project. And we started this in the spring of 2022 and then the Inflation Reduction Act passed in August of 2022. And it was like, you know, just off to the races. So, you know, we’ve seen an enormous set of investments in clean energy manufacturing in response to the Inflation Reduction Act. We’re tracking 195 projects in wind, solar, batteries and electric vehicle manufacturing that adds up to $116 billion in investment and promise of roughly 24,000 new jobs. So that’s like just post IRA. We’re also tracking kind of all the investments that we can find, including those pre-IRA. And when you put all those numbers together, it’s 406 projects, $227 billion —
Chris Hayes: Wow.
Jay Turner: — in investment and 350,000 jobs. So, like the investment we’ve seen just in the last two years is basically half of all the investment that we’re tracking from all the years before that. So, you know, it really has accelerated the rate.
Chris Hayes: Right. So a bunch of stuff was happening even before the Inflation Reduction Act. And what’s the before and after picture look like? Why was momentum building even before the subsidies?
Jay Turner: Well, you know, there had been investments in clean energy, you know.
Chris Hayes: Right. Of course.
Jay Turner: kind of a big push came with the American Reinvestment and Recovery Act in 2009 with the Obama administration. You know, some investments, early investments in batteries and solar. But the rate of investment really picks up starting with the Biden administration. I think the signals were clear. The Bipartisan Infrastructure Law was a key piece of policy that was favoring clean energy technologies. And so, you know, up to kind of 2021, we were seeing about a billion dollars in investment per month. That grows to about $4 billion per month around the time that the Bipartisan Infrastructure Law passes and then it goes up to about $5 billion a month with the Inflation Reduction Act. That’s when the average level of kind of newly announced investments for the last two years, $5 billion in this clean energy sector per month. And that’s a major jump for where we were kind of pre-Biden administration.
Chris Hayes: More of our conversation after this quick break.
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Chris Hayes: So these projects you’re tracking, first of all, I mean, it’s hard to generalize across so many projects, but what are some examples and like, what does it mean a new project? You know, a new battery plant, like what’s that look like? How big is it? How many people work there?
Jay Turner: Yeah. So, you know, we’re talking about new battery plants like the Blue Oval project in Kentucky or Panasonic’s new battery factory in DeSoto, Kansas, or LG’s battery factory, which is in Arizona. We’re talking about projects around solar manufacturing, like a Illuminate project, which is in Ohio or other solar projects, which are located in Georgia. It’s investments in the components and materials that go into this, so companies that are manufacturing separators or cathodes or even the materials that go into these technologies. So you know, mining for lithium, refining lithium. So it’s about the whole supply chain. How many people work in these factories? You know, if you’re talking about a battery factory, you’re talking about a facility that is, you know, somewhere in the neighborhood of 20 to 30 times larger than a football field, right? Really big facilities.
And also employing, you know, anywhere from one to 3000 people to manufacture enough batteries to supply, say a million vehicles, you know, 500,000 to a million vehicles per year. So really big projects when you’re talking about the battery factories, you know, projects where they’re down the supply chain tend to be smaller than that. But I think you need to come back to like, what are some of the general trends we’re seeing? And one clear general trend is we’re seeing a lot more investment in the manufacturing kind of at the end products, so the solar panel or the final battery cell than kind of the processes upstream or the mining of the materials that go into those technologies. So I think, you know, that’s one clear trend, a lot more on the manufacturing side, further down the supply chain. And also seeing a lot of investment in rural communities. That’s a big trend as well.
Chris Hayes: Let’s talk more about that because I thought you sort of track the geography of this. And even as you just sort of mentioned these places, I mean, one of the sort of theory of the case from a political economy perspective was we’re going to do what Donald Trump sort of talked about, but never did, right. The core of this complaint, which is that the neoliberal economy of the U.S. post 1980s, particularly post 1990s and China, you know, entering the World Trade Organization and getting most favored nation status and NAFTA produced this situation in which according to economic theory, everyone was better off because there were winners and losers from free trade and the winners outnumbered the losers. But from a political geography perspective, from a political economy perspective, from a sense of place, you know, these places that had industrial manufacturing that saw them go away were really devastated and brutalized and the communities disintegrated and all these things. So the idea is if we take that idea seriously, we use the mechanisms of government for a kind of 21st century green industrial policy where we use government subsidies to pair with private investment to sort of recreate an American new, you know, rust belt, right, green belt where the kinds of rural places that have lost these jobs, people are going to come in, they’re going to be good paying jobs, they’re going to pay a good wage, they will maybe be unionized and people who don’t have college degrees, the kind of satisfying, important and dignified, stable middle-class work that happened in the 1960s with say, you know, Detroit and UAW. That’s the division. What does the political geography look like?
Jay Turner: Yeah, well, you know, these are big projects and they’re projects that require a lot of space and a lot of workers and —
Chris Hayes: Right.
Jay Turner: — a lot of available electricity and they’re projects that need land costs to be low, right? And they’re businesses that are making investments, are interested in going to areas where they think the local government is friendly to business. And so when you start to add all of these factors up, I mean, what has become clear is that one, the IRA is driving a tremendous amount of investment to rural communities in America, right? And this is important because when we track the numbers and do the analysis, these are communities that have lower than average median household incomes and higher unemployment. So it’s taking economic opportunity and jobs to communities that will benefit from that. But it also means that most of these projects are going to areas of the country, to congressional districts that are represented by Republicans. And like not just by a little bit, but by a whole lot, right? For every $1 in investment that’s going to a Democrat congressional district, $4 are going to Republican congressional districts.
Chris Hayes: Four to one.
Jay Turner: Right four to one, yeah.
Chris Hayes: Wow, that is a really striking number.
Jay Turner: Yeah. So why is this, right, because the Republicans sure weren’t pushing for the Inflation Reduction Act. And you know all of these factors that we’ve mentioned, right, you know, friendly to business, low land costs, available workers, electricity, all of those are important. But at this point, two years in, we’re also seeing a clustering effect where kind of the early investments in areas is bringing more investment with it, right? So you’re seeing not the Rust Belt, but the Battery Belt, as people are describing it. It’s emerging in the Southeast with Georgia at its epicenter, where you’re seeing a whole cluster of investments in clean energy technologies around E.V.s and solar and batteries in new parts of the country. And this marks a really big change in the industrial geography of the country.
Chris Hayes: Four to one is really a pretty striking number. I mean, to talk about, you know, the opposite of sort of rewarding your base and kind of screwing your political enemies. I mean, that’s how it should be at some level. You shouldn’t think that way. And I think part of the theory of the case is that this kind of investment will be good for people, which is the most important thing, but also maybe transform the politics and the political economy and political geography. I do wonder, do we see evidence of this changing the politics around this stuff? Like when Trump’s out there saying, we’re going to get rid of all this E.V. nonsense, that would be bad for the economy of the state of Georgia, I think, pretty unambiguously, right?
Jay Turner: It would really lead to a lot of uncertainty. And, you know, we’re already seeing some projects being put on pause.
And if Trump is elected, we will see more projects be put on pause. Investment is going to go away. You know, companies are going to get scared off. I also think, you know, once the election takes place and if Harris comes into office, we’ll likely see another surge of investment as kind of, there’s more regulatory certainty about what’s going to go forward. But I mean, for sure, right? Republican districts have a lot to lose if the Inflation Reduction Act gets rolled back. And I think, you know, it would be unclear if that would happen even if Trump came into office, right? This is a law. They would have to be very clever about how they move the legislation through Congress, perhaps another rescissions act, unless they held a majority in both houses and the White House. So I think it’s going to be hard to undo the Inflation Reduction Act. But right, Republicans have a whole lot at stake. But I think the other piece of this is, is it going to make a difference in the election, right? Are these red districts going to vote for Harris because they see the benefits of the Inflation Reduction Act? And I think there it’s a challenge of timing, right? And these jobs are, you know, dependent upon projects that are being built or maybe are going to be built next year, right? But they’re not projects —
Chris Hayes: Right.
Jay Turner: — that are employing people today. And construction jobs are good jobs that are important jobs, but they’re also, it’s messy, right? Construction is when there’s a lot of uncertainty and trucks are rolling down —
Chris Hayes: Disruptions.
Jay Turner: — the highway and a lot of disruption. And so I think for a lot of communities on the ground, I think there’s been a lot of good reporting on this in places like Georgia, right? This transition doesn’t look like a win yet, right? There is still deep skepticism. So, you know, I think if all of this goes to plan, all of these projects come to fruition, we see these industries scale up, things could be really different four years from now, but the timing isn’t right for the Inflation Reduction Act to really change the politics on the ground in these communities this election cycle.
Chris Hayes: Let’s stay on this because I think this is a really important point, right? So let’s say, you know, the Inflation Reduction Act passes and LG or Kia says, hey, you know, we’re going to do a new battery plant in this town in Georgia. And, you know, maybe the governor, Governor Kemp, who has been, I think, my understanding, you know, quite open to and encouraging of these kinds of investments, touted them himself quite a bit. He goes and does a ribbon cutting, right, or they have an announcement, then he does a press conference. But it takes a long time to build a battery factory, presumably, right? I mean, that’s like a few years at least probably. So no one’s actually working and making the batteries there yet.
Jay Turner: Right. I don’t think any of these big battery plants that were announced post Inflation Reduction Act, none of them are in operation at this point.
Chris Hayes: Right.
Jay Turner: Some of them are under construction at this point but, right, it takes two to three years to bring one of these factories online, right? So that means we’re kind of in this messy construction, not kind of stage, but right, all those new jobs and people going to work at those factories and the tax revenues that are going to come to the local communities, right? All of that’s not rolling in yet.
Chris Hayes: That’s a great point. It does make you wonder about the durability of it. I think my read on this, Dave Roberts read on this as well, and we had him on the program, was that they’re not really campaigning on repealing the Inflation Reduction Act the way they campaign on, say, repealing the Affordable Care Act. Trump hates clean energy. He talks about it being crazy that his whole riff about sharks is about electrified boats, like that’s the most ridiculous idea in the world. We were just talking before, you and I both just got back from Iceland and I rode on electrified ferry to Westman Island, which is super cool because you get on it, it pulls into the dock and then at like, at the dock, there’s like an enormous plug that shoots out of the dock into the boat about 15 or 20 feet up on the boat and like plugs into it to charge it.
Jay Turner: Now I feel like I have to go back to Iceland. I missed something.
Chris Hayes: You missed this. It’s super —
Jay Turner: I missed this.
Chris Hayes: — it’s super cool. And actually I then read it because I then read a whole report on the electrification of ferry service across Europe, which is there’s tons of these electric ferries. They started in Scandinavia and Norway, but they’re operating now in Italy and Greece, et cetera, et cetera. Point being Trump has a deep and weird like antipathy towards clean energy, almost on aesthetic grounds. Like he doesn’t like it. I mean, also he wants money from big fossil fuel interests. He’s reported to have told them he wants them to raise him a billion dollars. All of that said, it’s not clear to me they’re going to be able to get the votes to repeal the Inflation Reduction Act —
Jay Turner: Yeah.
Chris Hayes: — right? That doesn’t seem like the most likely thing even if Trump is elected.
Jay Turner: Yeah, I mean, I think we also kind of in this context should mention that Elon Musk, right, is cozying up to Trump and —
Chris Hayes: Yes.
Jay Turner: — and he’s confusing this. This doesn’t make sense in the first place. And then, you know, kind of that new dynamic, you know, just further confuses kind of how Trump thinks about energy policy. But I think kind of the bigger point, the one that is more interesting to me historically is, right, how Republicans are positioning themselves on the Inflation Reduction Act. And right, I mean, it’s really different, right? We were talking about the Waxman-Markey bill earlier. And —
Chris Hayes: Right.
Jay Turner: — when that piece of legislation was on the table, which was 2009, 2010, that was the same time that the Affordable Care Act was on the table. And during those midterm elections, right after Obama was elected, right, two years into his first term, Republicans railed against the Affordable Care Act, but I think we forget that they also railed especially in rural communities —
Chris Hayes: Oh my God.
Jay Turner: — against the Waxman-Markey bill. You know, there was a group going around with a hot air balloon that they would float up in farm fields and you know, it was a hot air balloon, you know calling yes, you know global warming, right? It’s, you know, a whole bunch of hot air and they would you know tell people that this Waxman-Markey bill was going to lead to, you know, $4, $5, $6 gasoline and you’re going to have to have energy audits before you could even sell your home. I think it was a major talking point during the midterm election in these communities and we haven’t seen any of that with the Inflation Reduction Act, right? They’re really —
Chris Hayes: Great point.
Jay Turner: — not emphasizing that. And I think that kind of marks a change in terms of the politics.
Chris Hayes: And also just to get back to the brass tacks of the subsidies because this timeline is so important. So you see investment going from a billion a month to four billion to five billion, right? You’ve got all this stuff in the pipeline, you’re tracking 400 projects, maybe half of them or so are specifically post Inflation Reduction Act. They’ve got to get built, get online several years. If the Inflation Reduction Act is not repealed, all these subsidies and tax credits last a decade, right, through 2032?
Jay Turner: That’s right.
Chris Hayes: So I guess the question is, I mean, obviously there’s been an enormous difference, I think, in climate policy and the government between a Trump administration and Harris administration for a million reasons, which we talked about with David Roberts. But on specifically the durability of the subsidies in the act and the investment, It should continue at some level, right? I mean, maybe there’ll be a little more regulatory uncertainty, but what do you think would happen? How durable does your data collecting suggest it would be under a Trump administration?
Jay Turner: Yeah. I mean, I’m not sure our tracking speaks to that directly, but I think what’s important in my mind is that, you know, The Inflation Reduction Act, because it was a rescissions bill, because it was designed to, you know, change the tax code, right? It’s going to take another law from Congress to fundamentally change the incentives that the Inflation Reduction Act put into place. I mean, there could be some tweakings around the implementation, right? Kind of, you know, how we define what a foreign entity of concern is, or determine whether a battery kind of meets those domestic sourcing requirements that we talked about, right? There could be, you know, some regulatory, you know, kind of details that could be tweaked in ways that would make the subsidies harder to earn. But the, you know, basics of having the production, the advanced manufacturing tax credit, right, that’s not going to change unless the Republicans can pass a bill and get past a Democratic filibuster to move that legislation into law. So I think, you know, in that way, it was purposefully designed to be durable by embedding it in the tax code. It doesn’t make it permanent, but it’s a lot harder. It’s not the sort of thing where you had Trump can come in and wave his pen and wipe it away.
Chris Hayes: I mean, again, you know, this is one of these questions of how much does gravity continue to exist and just basic political self-interest win out over, you know, cult of personality or whatever. But that four to one ratio, right, $4 of investment in districts represented by Republicans to every $1 of investment in districts represented by Democrats, presumably that should create a bit of a constituency in the United States Congress to not want to get rid of this stuff. I mean, you know, that’s not guaranteed, but it does seem like it should be a bit of a thumb on the scale.
Jay Turner: I would agree. I would expect that’s how we would see it play out, but, I don’t know. Politics have been awfully unpredictable.
Chris Hayes: We’ll be right back after we take this quick break.
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Chris Hayes: I want to just talk about two more aspects. So one is what this is doing. So we’ve talked a lot about the kind of political economy of this, right? The idea of like where this manufacturing being cited, what it can mean for local economies, the sort of clustering effect, which is a really interesting feature of economic geography. It’s actually what Paul Krugman got his Nobel Prize for his work on economic geography. We all have examples in our head of it, Silicon Valley and Detroit and auto being sort of the two most obvious. It’s like there’s no real geographic reason that you have to launch a bunch of tech companies in Northern California. It’s not like there’s some like amazing natural resource there that you got to mine, right? It just sort of happened for a bunch of contingent reasons. Also pretty true of auto in Detroit. There’s actually a bunch of different places that we’re working on those that sort of clustered there. So you’ve got that aspect to it. You’ve got this sort of the politics of it. You’ve got the labor aspect. In terms of what it’s doing to the actual amount, like, are we making this stuff cheaper and at scale as these things come online, I guess is the next question.
Jay Turner: Yeah. Well, we’re definitely investing in the factories, right, to build these. We’re talking about the solar panels and the wind turbines, and especially the batteries and the electric cars. There’s some concern, right, about uptick, right? How are consumers going to respond, right? You know, are consumers going to buy electric vehicles, right? There are definitely headwinds there because concerns and confusion about electric vehicles persist. But I think the big picture question about what difference is this going to make? I mean, one important metric is what differences is it going to make in terms of our greenhouse gas emissions? That is one of the —
Chris Hayes: Yeah.
Jay Turner: — key goals here, right, is to meet our Paris Climate Accord commitments. And I don’t have the answer to that, but the go-to person for me on that, right, is the work of Jesse Jenkins and the ZERO Lab at Princeton University. And they put out in August of 2024, so real recently, their most recent analysis based on how investments are scaling up post Inflation Reduction Act. And, you know, what their analysis shows is that with all of these investments in the model kind of uptick of these technologies, the Inflation Reduction Act gets us about halfway to where we need to be in terms of meeting net zero greenhouse gas emissions goal for 2050. So we’re in a much better place than we were pre-Biden administration, pre-Bipartisan Infrastructure Act, pre-Inflation Reduction Act, but there’s a lot of work left to do, and the Inflation Reduction Act by itself is not going to get us there. So, I think where the IRA kind of puts its kind of policy emphasis right on decarbonizing the electric grid, right by scaling up wind and solar and decarbonizing transportation by giving us a reason to move from fossil fuel to electric vehicles. Those are areas where the modeling indicates we’re going to be close to being on track, but there’s still a lot of work to do in industry and on the residential sector and the commercial sector. So, I think we should celebrate the Inflation Reduction Act, but also realize —
Chris Hayes: Yeah.
Jay Turner: — we need a Harris administration that’s going to take us on a next big step.
Chris Hayes: That’s a great, great point and a super, super important one. In terms of the geopolitical aspects of this, particularly around trade and competition, I mean, what are the reverberations been? I don’t know if this is something that you talked or thought about. I mean, I know in the context of batteries, this has been, you know, a real tug of war, right? The warning has been for a long time from Democrats, if we don’t seize the moment, these jobs of the future will go to China. And in some ways that has happened to a large extent. I mean, you know, it’s wild. Occasionally on social media, you’ll see some advertisement for some Chinese electric car that costs like 7,000 U.S. dollars and looks pretty dope. What effect has this had on China or other places in the world? The Europeans were ticked off about a lot of elements of the Inflation Reduction Act. In fact, I think they’re even leveled some like formal trade complaints. What have the international reverberations been?
Jay Turner: Yeah. Well, I think China is the topic to talk about here because China has established itself as the global leader in the clean energy sector. In some ways, this seems so obvious. At the same time, if you think back to just 10 years ago, the big concern about China was that it was building a new coal-fired power plant, right? Like two coal-fired power plants every week, or that China was going to stop importing recyclables in 2017. While those were the chief concerns, China kind of behind the scenes was building out a huge clean energy industry. And so I think as I read it, the Inflation Reduction Act is a very necessary strategy to put the U.S. in a position to play catch up to China in terms of the jobs, in terms of energy security, in terms of economic growth. And I think it’s worth realizing that this was a strategy that both China and the U.S. were pursuing post-recession in 2008. At the same time, the U.S. passes the American Recovery and Investment Act. That was when China started to make —
Chris Hayes: Right.
Jay Turner: — investments. in their clean energy sector. But the difference was, after those midterm elections in 2010, the Republicans took over the House and they basically shut down all of the lending for clean energy technology investments that the Obama administration had put into place.
Chris Hayes: Right.
Jay Turner: So, it’s Solyndra was the failed solar company that became kind of the example for why these kinds of investments didn’t make sense. So, while we were bringing our collective hands over Solyndra, forgetting the fact that Tesla also took advantage —
Chris Hayes: Yup. Yup.
Jay Turner: — of these policies in those years. China leaned in, and at first it might have seemed, especially on the battery front, that China was really just laying the groundwork for its consumer electronics manufacturing industry. But it turns out that lithium ion batteries aren’t just important for smartphones and laptops, but have become a key technology to the clean energy transition. And China wasn’t just investing in the factories, they were investing in the whole supply chain, right? Building relationships with, you know, mining interests in Australia and making investments in the Democratic Republic of the Congo and Latin America so that, you know, they put themselves in really having, you know, the lion’s share of both the supply chain and the materials processing and the manufacturing for batteries and solar panels and wind turbines.
Chris Hayes: This is a tech question which you may or may not be able to answer, but I suspect you will, which is, we’ve seen sort of astonishing growth in efficiency of a lot of these various technologies, capacity, particularly for batteries, you know, how much energy they can store and how many kilograms. And cost, they’ve come down hugely. Are we at some sort of battery, like we’re going to need a lot of batteries in the green economy. We’re going to need them to work for a fairly long time. Are we approaching some plateau of battery technology or is there some next level of battery technology past the kind of lithium batteries that we’ve been using that’s going to be necessary for like the next phase of this transition?
Jay Turner: Yeah, I mean, it’s a great question. And as a historian, I’m probably the wrong person to answer it. But I’ve watched this sector very carefully for a long time now. And one thing that’s important about batteries is that progress tends to come very slowly. I mean, yeah, the storage is per unit, weight or volume is better than it was, but there have been incremental gains. We were talking about 10, 20, 30 percent gains, whereas it’s the price, the cost curve. That’s what’s changed so much. We’ve seen the cost of lithium ion batteries fall many times more than their energy storage abilities have increased. But I think what’s most important here is there has never been as much attention and investment and research, both in the private sector and in terms of the public sector, government-supported work, educational work, in batteries in these clean energy technologies. So I think we’re going to see the pace of innovation increase as a result of that. And we’re already seeing some of that happening. Even as I finished this book, I spent 10 years working on the history of batteries and I think I gave maybe one line to sodium ion batteries because they just didn’t seem like they were kind of a player.
And over the last two and a half years, sodium ion batteries have gone into production and have started to be scaled up. And they offer an alternative to lithium ion batteries, slightly different applications, but uses a different part of the periodic table that’s a little bit easier to work with, a little bit safer, a little bit more abundant. And I think we’re going to continue to see that kind of innovation. I’m excited. I’m not an expert in it by any means, but the work that Forum Energy is doing on long duration storage based on iron air batteries, like this is not going to be in your car, but this is the sort of thing that they’re actually planning to put up in Maine to store, you know, kind of utility scale electricity storage to help offset or to meet demand during peak periods. You know, those kinds of investments and innovations, you know, are going to be key because as you said, we’re going to need a lot more of these batteries.
Chris Hayes: What is iron air? Is that what the word you used?
Jay Turner: Iron air. Yeah, right.
Chris Hayes: What is iron air?
Jay Turner: So it is the battery chemistry and my very basic understanding of this is, you know, how this battery is designed to work is kind of based on harnessing the properties of iron and rust and using that to store and recover energy. That’s a very bad explanation. I’m sure there’s a much better one on their website, but it has the potential to be low cost at scale. It has the potential to be long duration, you know, storing. If we think of lithium ion batteries, this being good for maybe four hours of grid scale storage, this technology can be for hundreds of hours of grid scale storage. And that would make a real difference in deploying a clean electricity grid.
Chris Hayes: Yeah, and just people are probably tracking this, but just to emphasize, you know, we’ve got batteries in all these consumer devices, obviously, cars being chief among them. But at the utility level, as you move towards solar and wind, those fluctuate depending on whether it’s a windy day, they fluctuate by time of day and by season. If you’re talking about solar, solar has this mismatch problem between when the sun is shining and when people drop power. So, you know, you’re getting most of your power in the middle of the day when people aren’t home and they’re at work, people come home, sun goes down, energy spikes, managing that is a huge challenge for utilities and batteries are a way of essentially time shifting. There’s other things you can do, what’s called base load coming from other carbon-free sources, hydroelectric dams and nuclear being chief among them. But utility scale batteries is a whole other universe of fascinating innovation where we’re going to have to have lots more of cool solutions.
I’m going to check out that Maine project. I mean, one thing that struck me when I talked to David Roberts about this from the Volts newsletter and podcast, you know, again, I’m not saying like everything solved and everything’s great. Your point about, you know, the IRA is maybe going to get us halfway there. We need the other half and there’s so much work to do. But the law has been a success, it seems like. Like there was a theory of the case, we ran the experiment and put it into effect. And so far it seems like it’s doing what you would want it to do, which isn’t always the case with legislation. Sometimes there’s unintended consequences, sometimes things backfire. This seems like the design, the thinking of the design and what it has borne out in reality is sort of shockingly, pleasantly close.
Jay Turner: Yeah. I mean, one might even say it’s exciting —
Chris Hayes: Yeah.
Jay Turner: — you know, to see these investments, the potential to manufacture solar panels in the U.S. scale of battery manufacturing to bring the cost down, to make these technologies accessible to more people across the country. I mean, you know, that is exciting and that is what we’re seeing happening. I mean, yeah, there are a lot of things that still need to happen. Everything with the Inflation Reduction Act is not working, you know, quite right. But big picture, you know, this is a success story. You know, I think it’s going to be hard to frame it that way and describe it that way and to get votes based upon it during the election cycle. But I think when you take a step back and you look at, you know, this from a climate perspective, from a policy perspective, right, you know, this is the kind of carefully designed policy we need and we need more of.
Chris Hayes: Jay Turner is a professor of environmental studies at Wellesley College. He’s a historian. He’s been studying the effects of the Inflation Reduction Act. He’s also author of the book, “Charged: A History of Batteries and Lessons for a Clean Energy Future.” That was great, Jay. Thank you so much.
Jay Turner: Thanks, Chris. Really goo to meet you.
Chris Hayes: Once again, great thanks to Jay Turner. I learned a ton from that conversation. I hope you did, too. Would love to hear your feedback. You can e-mail us at withpod@gmail.com. Get in touch with us using the hashtag #WITHpod. You can follow us on TikTok by searching for WITHpod. You can follow me on Threads, what was used to be known as Twitter and Bluesky all @chrislhayes.
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“Why Is This Happening?” is presented by MSNBC and NBC News, produced by Doni Holloway and Brendan O’Melia. Engineered by Bob Mallory and featuring music by Eddie Cooper. Aisha Turner is the executive producer of MSNBC Audio. You can see more of our work, including links to things we mentioned here by going to nbcnews.com/whyisthishappening.
“Why Is This Happening?” is presented by MSNBC and NBC News, produced by Doni Holloway and Brendan O’Melia, engineered by Bob Mallory, and featuring music by Eddie Cooper. Aisha Turner is the executive producer of MSNBC Audio. You can see more of our work, including links to things we mentioned here, by going to nbcnews.com/whyisthishappening.