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US Manufacturing Sector Needs New Policy, Funding to Bolster R&D, Avert Climate Change

(Credit: Information Technology and Innovation Foundation)

The manufacturing sector could face new policy changes and sources of funding in terms of their pathway to net-zero emissions, if findings from a new report are heeded.

Manufacturing may soon become the sector with the largest greenhouse gas emissions in the US, yet national plans to achieve net-zero emissions have so far not focused on retooling these industries, according to the report from the Information Technology and Innovation Foundation, the Boston University Institute for Sustainable Energy, and Fraunhofer USA’s Center for Manufacturing Innovation. In order to bolster the US manufacturing sector and avert climate change, timely research, development and deployment policies targeted at specific manufacturing industries could create competitive advantage and expand investment, the report states.

Policymakers must fashion an integrated response to both the climate imperative and the manufacturing challenge, particularly in terms of industries and technologies where domestic producers are most likely to succeed against international competitors. 

If policymakers focus federal investment in those industries, they will engage industry, labor, the states and communities, mobilizing the “awesome power of markets to inspire innovators and rapidly scale up innovations,” according to the report.

Specific industries that could be targeted for manufacturing and climate policy to increase competitiveness could include:

  • Clean hydrogen production, which will become a core sector of the global low-carbon economy;
  • Next-generation heat pumps, novel drying technologies, and related innovations, that will be in high demand worldwide to cut emissions from buildings and low-temperature industrial processes;
  • Clean chemical manufacturing, which will require innovations in recycling and bio-based production;
  • Biotechnology-based proteins, that could displace emissions from agriculture.

“A manufacturing policy that fails to trigger radical emissions reductions could lead to the United States’ increasing economic isolation and worsening competitiveness if the rest of the world shifts toward clean production,” the authors write. 

“Success is not guaranteed in any of these industries, but they will all need support from the private and the public sectors, increased R&D and demonstration funding, and policies that maximize investment and stimulate demand,” said Henry Kelly, senior fellow at the Boston University Institute for Sustainable Energy and co-author of the report. “An integrated climate and manufacturing strategy, tailored to the opportunities and barriers that each industry faces, would give the United States a chance to claim global leadership on climate, strengthen its manufacturing base, and create rewarding jobs.”

Currently, industry accounts for 23% of US greenhouse gas emissions, following transportation (29%) and electricity (25%), according to the EPA. 

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