Welcome back, climate leaders.

In today’s edition:

• 🏛 How the IRA has already reshaped the global economy

• 💰 A retail reuse platform raises $30m.

• 📉 EV price wars in China are a race to the bottom

Read time: 5 minutes

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BIG STORY

How the IRA has reshaped the economy

Driving the News: A year ago, the U.S. made a historic move by enacting the Inflation Reduction Act, marking the first significant federal climate legislation.

What's Happening: Investments are pouring into U.S.-based solar, wind, battery, and EV ventures.

• Over 100 new clean energy manufacturing facilities have been announced, and renewable energy projects are being developed at an unprecedented rate.

• The act has spurred approximately $278bn in new clean energy investments, resulting in the creation of over 170,000 jobs in its first year. This has led to companies doubling their spending on new manufacturing facilities.

• With rebates of up to $7,500 for EV purchases, sales are projected to exceed 1 million in the US for the first time this year.

Why It Matters: The U.S., being the largest historical CO2 emitter, has a significant role to play in global climate change mitigation.

• The act is anticipated to reduce greenhouse gas emissions by up to 48% by 2035 from 2005 levels. However, more measures will be required to achieve net zero emissions by 2050.

• Despite its success, the act has faced threats of repeal from Republicans. President Biden has also been criticized for his approach to fossil fuels and for not fully living up to the act's promise.

What's Next: The IRA is a big step. But building and deploying the right technology and solutions at a large scale is what will drive the right outcomes.

• Speed of subsidy disbursement, the scalability of companies, consumer willingness to adopt electrification, and political and local community resistance are major factors in ongoing success.

• The upcoming 2024 U.S. elections could also influence the law's trajectory. Despite challenges, the Inflation Reduction Act's anniversary is a testament to the U.S.'s commitment to addressing the climate crisis.

🌶 Hot take: The IRA is why this newsletter exists. After years of private sector advancements, like the reduction in solar and lithium costs, it’s the first meaningful step for the biggest country in the world to lead the way toward decarbonization.

HOT TOPICS

1. 🚛 Hydrogen trucks: The Biden administration aims to boost U.S. hydrogen production, supporting manufacturers like Toyota, Hyundai, Nikola, and Cummins to bring hydrogen-powered trucks to market. Hydrogen's advantages include quick refueling and lower total cost of ownership compared to electric semis. However, most freight falls within the range of electric semis.

2. ♻️ Reuse: Trove secured $30M in Series E funding, with total funding of $150M. The startup aims to expand its brand resale and trade-in services, focusing on new brands and verticals for a more sustainable, circular business model with major retailers such as Canada Goose, lululemon, Patagonia, REI, Levi's, Arc'teryx, Allbirds, and more.

3. 🇨🇳 China price wars: A fierce price war has made electric vehicles more affordable than gasoline cars. This has led to increased consumer adoption of plug-in vehicles, surpassing predictions.

4. 🧑🏼‍⚖️ Climate courts: Montana court rules in favor of young people suing the state over climate change, recognizing their rights to protection. The court found the state's energy policy violated their rights to a clean environment, citing the unconstitutionality of laws prohibiting climate impact consideration.

5. 💰 Big Oil and DAC: Oil giants Chevron and Shell are venturing into the emerging direct air capture (DAC) industry. Chevron will receive up to $3 million to explore feasibility in California, while Shell is part of a consortium with Louisiana State University and the University of Houston, potentially receiving $3 million for a DAC "hub" project.

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CHART OF THE DAY

Tesla's Model 3 and BYD's Dolphin now offer more affordable options compared to their competitors, with substantial market share impact. Although tax exemptions contribute to lower prices, true subsidy-free parity may not be achieved until 2025 for smaller cars in China according to BloombergNEF.

ACCLIMATE RECS

• The clean energy future is arriving faster than you think

• Taking on the bad e-bike takes

• Recycling failed to stop plastic pollution. A new global treaty might actually help

• Rising flood risks threaten many water and sewage treatment plants across the US

• Inside the industry that made climate denial work

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- Rick Jarrell, Founder of Acclimate