In the third quarter of 2024, clean energy and transportation investments in the United States hit a remarkable milestone, surging to a new peak of $71 billion. This growth trajectory has been nearly uninterrupted over the past three years, showcasing a 12% increase from the same period in 2023. Clean investments now represent 5% of total private investments in the US, up from 4.5% in Q3 2023.
The surge in retail investment, up by 9% from the previous quarter, was the primary driver behind the overall clean investment growth. This increase was largely fueled by a significant rise in zero-emission vehicle sales during Q3. While clean technology manufacturing investment remained stable quarter-on-quarter, with declines in solar manufacturing offset by modest gains in battery and ZEV manufacturing, it saw a substantial 57% increase from the same period last year. Conversely, investments in deploying technologies to decarbonize energy and industrial production declined by 7% quarter-on-quarter, marking the third consecutive quarter of decrease and a 6% drop compared to Q3 2023. Investments in emerging climate technologies, such as clean hydrogen and sustainable aviation fuels, rose by 4% from the previous quarter but dipped by 6% compared to the same period last year.
Analysis using the Clean Investment Monitor database revealed that the expansion of clean electricity capacity in the US is falling short of the levels required to achieve a 40% reduction in net greenhouse gas emissions by 2030, a target set by the Inflation Reduction Act. Current projections suggest that the growth rates of solar and wind energy are aligning more closely with a scenario that would only yield a 30% reduction in emissions by 2030.
This quarter’s report introduced several methodological updates that have expanded the scope of technologies covered and impacted the scale of findings. The monitoring now encompasses approaches to decarbonizing cement, iron and steel, and pulp and paper production, offering a broader view of industrial emissions reduction advancements. Additionally, the inflation adjustment process has been refined to track price changes more precisely, enhancing the accuracy of cost assessments over time. Moreover, increased focus has been placed on tracking the construction progress of monitored facilities, with start dates adjusted based on evidence of groundbreaking activities. These updates have led to revised investment estimates for this quarter and prior periods.
As the clean energy and transportation sectors in the US continue to witness robust growth and evolving technologies, the importance of sustainable investments becomes increasingly evident. These developments not only drive economic growth but also play a crucial role in achieving environmental targets and reducing carbon footprints. The strategic allocation of resources towards clean technologies is essential for fostering a greener and more sustainable future for generations to come.
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