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    Biden’s Climate Law Is Reshaping Private Investment in the United States

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    Lucrative tax incentives have fueled a surge in solar panels but failed to boost wind power, data from a new project show.Private investment in clean energy projects like solar panels, hydrogen power and electric vehicles surged after President Biden signed an expansive climate bill into law last year, a development that shows how tax incentives and federal subsidies have helped reshape some consumer and corporate spending in the United States.New data being released on Wednesday suggest the climate law and other parts of Mr. Biden’s economic agenda have helped speed the development of automotive supply chains in the American Southwest, buttressing traditional auto manufacturing centers in the industrial Midwest and the Southeast. The 2022 law, which passed with only Democratic support, aided factory investment in conservative bastions like Tennessee and the swing states of Michigan and Nevada. The law also helped underwrite a spending spree on electric cars and home solar panels in California, Arizona and Florida.The data show that in the year since the climate law passed, spending on clean-energy technologies accounted for 4 percent of the nation’s total investment in structures, equipment and durable consumer goods — more than double the share from four years ago.The law so far has failed to supercharge a key industry in the transition from fossil fuels that Mr. Biden is trying to accelerate: wind power. Domestic investment in wind production declined over the past year, despite the climate law’s hefty incentives for producers. And so far the law has not changed the trajectory of consumer spending on some energy-saving technologies like highly efficient heat pumps.But the report, which drills down to the state level, provides the first detailed look at how Mr. Biden’s industrial policies are affecting clean energy investment decisions in the private sector.The data come from the Clean Investment Monitor, a new initiative from the Rhodium Group, a consulting firm; and the Massachusetts Institute of Technology’s Center for Energy and Environmental Policy Research. Its findings go beyond simpler estimates, from the White House and elsewhere, providing the most comprehensive look yet at the effects of Mr. Biden’s economic agenda on America’s emerging clean-energy economy.The researchers spearheading the first cut of the data include Trevor Houser, a former Obama administration official, who is a partner at Rhodium; and Brian Deese, a former director of Mr. Biden’s National Economic Council, who is an innovation fellow at M.I.T.The climate bill President Biden signed into law last year includes a wide range of lucrative incentives to encourage domestic manufacturing and speed the nation’s transition away from fossil fuels. Doug Mills/The New York TimesThe Inflation Reduction Act, which Mr. Biden signed into law in August 2022, includes a wide range of lucrative incentives to encourage domestic manufacturing and speed the nation’s transition away from fossil fuels. That includes expanded tax breaks for advanced battery production, solar-panel installation, electric vehicle purchases and other initiatives. Many of those tax breaks are effectively unlimited, meaning they could eventually cost taxpayers hundreds of billions of dollars — or even top $1 trillion — if they succeed at driving enough new investment.Biden administration officials have tried to quantify the effects of that law, along with bipartisan legislation on infrastructure and semiconductors signed by the president earlier in his term, by tallying up corporate announcements of new spending linked to the legislation. A White House website estimates that companies have so far announced $511 billion in commitments for new spending linked to those laws, including $240 billion for electric vehicles and clean energy technology.The Rhodium and M.I.T. analysis draws on data from federal agencies, trade groups, corporate announcements and securities filings, news reports and other sources to try to construct a real-time estimate of how much investment has already been made in the emissions-reducing technologies targeted by Mr. Biden’s agenda. For comparison purposes, its data stretch back to 2018, under President Donald J. Trump.The numbers show that actual — not announced — business and consumer investment in clean-energy technologies hit $213 billion in the second half of 2022 and first half of 2023, after Mr. Biden signed the climate law. That was up from $155 billion the previous year and $81 billion in the first year of the data, under Mr. Trump.Trends in the data suggest that the impact of Mr. Biden’s agenda on clean-energy investment has varied depending on the existing economics of each targeted technology.Mr. Biden’s biggest successes have come in spurring increased investment in American manufacturing, and in catalyzing investment in technologies that remain relatively new in the marketplace.Fueled partly by foreign investment, like in battery plants in Georgia, actual investment in clean-energy manufacturing more than doubled over the last year from the previous year, the data show, totaling $39 billion. Such investment was almost nonexistent in 2018.The bulk of that spending was focused on the electric-vehicle supply chain, including in the new Southwest cluster of activity across California, Nevada and Arizona. The Inflation Reduction Act includes multiple tax breaks for such investment, with domestic-content requirements meant to encourage production of critical minerals, batteries and automotive assembly in the United States.The big winners in manufacturing investment, though, as a share of states’ economies, remain traditional auto states: Tennessee, Kentucky, Michigan and South Carolina.Mr. Biden’s bipartisan infrastructure law targets the clean-energy economy, including spending to build out more charging stations for electric vehicles.Gabby Jones for The New York TimesThe climate law also appears to have supercharged investment in so-called green hydrogen, which splits water atoms to create an industrial fuel. The same is true of carbon management — which seeks to capture and store greenhouse gas emissions from existing energy plants or pull carbon out of the atmosphere. All those technologies struggled to gain traction in the United States before the law showered them with tax breaks.Hydrogen and much of the carbon-capture investment is concentrated along the coast of the Gulf of Mexico, a region filled with incumbent fossil fuel companies that have begun to branch into those technologies. Another cluster of carbon-capture investment is concentrated in Midwestern states like Illinois and Iowa, where companies that produce corn ethanol and other biofuels are beginning to spend on efforts to sequester their emissions.The incentives for those technologies in the Inflation Reduction Act, along with other support in the bipartisan infrastructure law, “fundamentally change the economics of those two technologies, making them broadly cost-competitive for the first time,” Mr. Houser said in an interview.Other incentives have not yet budged the economics of critical technologies, most notably wind power, which boomed in recent years but is now facing global setbacks as projects become increasingly expensive to finance.Wind investment was lower in the first half of this year than at any point since the database was started.In the United States, wind projects are struggling to navigate government processes for permitting, transmission and locating projects, including opposition from some state and local lawmakers. Solar projects and related investment in storage for solar power, Mr. Houser noted, can be built closer to power consumers and have fewer hurdles to clear, and investment in them grew by 50 percent in the second quarter of 2023 from a year earlier.Some consumer markets have yet to be swayed by the promise of tax breaks for new energy technologies. Americans have not increased their spending on heat pumps, even though the law covers up to $2,000 toward the purchase of a new one. And over the last year, the states with the highest spending as a share of their economy on heat pumps are all concentrated in the Southeast — where, Mr. Houser said, consumers are more likely to already own such pumps, and to be in need of a new one. More

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    Bill Gates, Marie Kondo and World Bank Head Will Speak at Times Climate Event

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    Sign up to watch the livestream and connect with online attendees about solutions to the climate crisis on Thursday, Sept. 21.Climate change is an issue that stretches across borders, touching every facet of our lives. Addressing it likewise requires shifts in almost every industry and institution. On Sept. 21, The New York Times will bring together newsmakers, including innovators, activists, scientists and policymakers, for an all-day event examining the actions needed to confront climate change.The livestream is available for Times subscribers.Sessions will include:Ajay Banga, president of the World Bank GroupAl Gore, former vice president of the United StatesBill Gates, founder of Breakthrough Energy and co-chair of the Bill & Melinda Gates FoundationEbony Twilley Martin, executive director of Greenpeace USAEleni Myrivili, global chief heat officer to U.N. Habitat and the Arsht-Rock Resilience CenterMarie Kondo, tidying expert and founder of KonMari MediaMichael R. Bloomberg, founder of Bloomberg L.P. and Bloomberg PhilanthropiesRobin Wall Kimmerer, scientist and authorTimes journalists, including the managing correspondent for the Climate Forward newsletter, David Gelles, and domestic correspondent, Somini Sengupta, and national food correspondent, Kim Severson, will drive the conversation.Signing up for the livestream will also give you an opportunity to connect with other online attendees on the messaging platform Slack. Each day will feature a different topic and guests, along with prompts from Times editorial staff.Details about the Slack channel and event schedule will be shared after registering. More

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    Heat Is Costing the U.S. Economy Billions in Lost Productivity

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    From meatpackers to home health aides, workers are struggling in sweltering temperatures and productivity is taking a hit.As much of the United States swelters under record heat, Amazon drivers and warehouse workers have gone on strike in part to protest working conditions that can exceed 100 degrees Fahrenheit.On triple-digit days in Orlando, utility crews are postponing checks for gas leaks, since digging outdoors dressed in heavy safety gear could endanger their lives. Even in Michigan, on the nation’s northern border, construction crews are working shortened days because of heat.Now that climate change has raised the Earth’s temperatures to the highest levels in recorded history, with projections showing that they will only climb further, new research shows the impact of heat on workers is spreading across the economy and lowering productivity.Extreme heat is regularly affecting workers beyond expected industries like agriculture and construction. Sizzling temperatures are causing problems for those who work in factories, warehouses and restaurants and also for employees of airlines and telecommunications firms, delivery services and energy companies. Even home health aides are running into trouble.“We’ve known for a very long time that human beings are very sensitive to temperature, and that their performance declines dramatically when exposed to heat, but what we haven’t known until very recently is whether and how those lab responses meaningfully extrapolate to the real-world economy,” said R. Jisung Park, an environmental and labor economist at the University of Pennsylvania. “And what we are learning is that hotter temperatures appear to muck up the gears of the economy in many more ways than we would have expected.”A study published in June on the effects of temperature on productivity concludes that while extreme heat harms agriculture, its impact is greater on industrial and other sectors of the economy, in part because they are more labor-intensive. It finds that heat increases absenteeism and reduces work hours, and concludes that as the planet continues to warm, those losses will increase.The cost is high. In 2021, more than 2.5 billion hours of labor in the U.S. agriculture, construction, manufacturing, and service sectors were lost to heat exposure, according to data compiled by The Lancet. Another report found that in 2020, the loss of labor as a result of heat exposure cost the economy about $100 billion, a figure projected to grow to $500 billion annually by 2050.A U.P.S. delivery in Manhattan on Monday.Spencer Platt/Getty ImagesOther research found that as the mercury reaches 90 degrees Fahrenheit, productivity slumps by about 25 percent and when it goes past 100 degrees, productivity drops off by 70 percent.And the effects are unequally distributed: in poor counties, workers lose up to 5 percent of their pay with each hot day, researchers have found. In wealthy counties, the loss is less than 1 percent.Of the many economic costs of climate change —- dying crops, spiking insurance rates, flooded properties — the loss of productivity caused by heat is emerging as one of the biggest, experts say.“We know that the impacts of climate change are costing the economy,” said Kathy Baughman McLeod, director of the Adrienne Arsht-Rockefeller Foundation Resilience Center, and a former global executive for environmental and social risk at Bank of America. “The losses associated with people being hot at work, and the slowdowns and mistakes people make as a result are a huge part.”Still, there are no national regulations to protect workers from extreme heat. In 2021, the Biden administration announced that the Occupational Safety and Health Administration would propose the first rule designed to protect workers from heat exposure. But two years later, the agency still has not released a draft of the proposed regulation.Seven states have some form of labor protections dealing with heat, but there has been a push to roll them back in some places. In June, Governor Greg Abbott of Texas signed a law that eliminated rules set by municipalities that mandated water breaks for construction workers, even though Texas leads all states in terms of lost productivity linked to heat, according to an analysis of federal data conducted by Vivid Economics.Business groups are opposed to a national standard, saying it would be too expensive because it would likely require rest, water and shade breaks and possibly the installation of air-conditioning.Martin Rosas, the vice president for the United Food and Commercial Workers Union International. “When it’s extremely hot, and their safety glasses fog up, their vision is impaired and they are exhausted, they can’t even see what they’re doing,” he said of the workers he represents.Brett Deering for The New York Times“OSHA should take care not to impose further regulatory burdens that make it more difficult for small businesses to grow their businesses and create jobs,” wrote David S. Addington, vice president of the National Federation of Independent Business, in response to OSHA’s plan to write a regulation.Marc Freedman, vice president of employment policy at the United States Chamber of Commerce, said, “I don’t think anyone is dismissing the hazard of overexposure to heat.” But, he said, “Is an OSHA standard the right way to do it? A lot of employers are already taking measures, and the question will be, what more do they have to do?”The National Beef slaughterhouse in Dodge City, Kan., where temperatures are expected to hover above 100 degrees Fahrenheit for the next week, is cooled by fans, not air-conditioning.Workers wear heavy protective aprons and helmets and use water vats and hoses heated to 180 degrees to sanitize their equipment. It’s always been hot work.But this year is different, said one worker, who asked not to be identified for fear of retribution. The heat inside the slaughterhouse is intense, drenching employees in sweat and making it hard to get through a shift, the worker said.National Beef did not respond to emails or telephone calls requesting comment.Martin Rosas, a union representative for meatpacking and food processing workers in Kansas, Missouri and Oklahoma, said sweltering conditions present a risk for food contamination. After workers skin a hide, they need to ensure that debris doesn’t get on the meat or carcass. “But when it’s extremely hot, and their safety glasses fog up, their vision is impaired and they are exhausted, they can’t even see what they’re doing,” Mr. Rosas said.Almost 200 employees out of roughly 2,500, have quit at the Dodge City National Beef plant since May, Mr. Rosas said. That’s about 10 percent higher than usual for that time period, he said.Maria Rodriguez, who has worked at the same McDonald’s in Los Angeles for 20 years, walked out on July 21.Jessica Pons for The New York TimesBut even some workers in air-conditioned settings are getting too hot. McDonald’s workers in Los Angeles walked off the job this summer as the air-conditioned kitchens were overwhelmed by the sweltering heat outside.“There is an air-conditioner in every part of the store, but the thermostat in the kitchen still showed it was over 100 degrees,” said Maria Rodriguez, who has worked at the same McDonald’s on Crenshaw Boulevard in Los Angeles for 20 years, but walked out on July 21, sacrificing a day of pay. “It’s been hot before, but never like this summer. I felt terrible — like I could pass out or faint at any moment.”Nicole Enearu, the owner of the store, said in a statement, “We understand that there’s an uncomfortable heat wave in LA, which is why we’re even more focused on ensuring the safety of our employees inside our restaurants. Our air-conditioning is functioning properly at this location.”Tony Hedgepeth, a home health aide in Richmond, Va., cares for a client whose home thermostat is typically set at about 82 degrees. Last week, the temperature inside was near 94 degrees.Any heat is a challenge in Mr. Hedgepeth’s job. “Bathing, cooking, lifting and moving him, cleaning him,” he said. “It’s all physical. It’s a lot of sweat.”Warehouse workers across the country are also feeling the heat. Sersie Cobb, a forklift driver who stocks boxes of pasta in a warehouse in Columbia, S.C., said the stifling heat can make it difficult to breathe. “Sometimes I get dizzy and start seeing dots,” Mr. Cobb said. “My vision starts to go black. I stop work immediately when that happens. Two times this summer I’ve had heart palpitations from the heat, and left work early to go to the E.R.”In Southern California, a group of 84 striking Amazon delivery workers say that one of their priorities is getting the company to make it safe to work in extreme heat. Last month, unionized UPS workers won a victory when the company agreed to install air-conditioning in delivery trucks.Amazon delivery drivers striking at the company’s Palmdale, Calif., warehouse and delivery center on Tuesday.Robyn Beck/Agence France-Presse — Getty Images“Heat has played a tremendous role — it was one of the major issues in the negotiations,” said Carthy Boston, a member of the International Brotherhood of Teamsters representing UPS drivers in Washington, D.C. “Those trucks are hotboxes.”Many factories were built decades ago for a different climate and are not air-conditioned. A study on the effects of extreme temperatures on the productivity of auto plants in the United States found that a week with six or more days of heat exceeding 90 degrees Fahrenheit cuts production by an average of 8 percent.In Tulsa, Okla., Navistar is installing a $19 million air-conditioning system at its IC Bus factory, which produces many of America’s school buses. Temperatures on the floor can reach 99 degrees F. Currently, the plant is only cooled by overhead fans that swirl high above the assembly line.Shane Anderson, the company’s interim manager, said air-conditioning is expected to cost about $183 per hour, or between $275,000 and $500,000 per year — but the company believes it will boost worker productivity.Other employers are also adapting.Brad Maurer, who leads a construction contracting business in Michigan, where heat has caused his employees to stop working hours before quitting time at some sites.Emily Elconin for The New York TimesBrad Maurer, vice president of Leidal and Hart, which builds stadiums, hospitals and factories in Michigan, Ohio, Indiana, Kentucky and Tennessee, said managers now bring in pallets of bottled water, which they didn’t used to do, at a cost to the company of a few thousand dollars a month.Rising heat around Detroit recently caused his employees to stop working three hours early on a Ford Motors facility for several days in a row — a pattern emerging throughout his company’s work sites.“It means costs go up, production goes down, we may not meet schedules, and guys and women don’t get paychecks,” Mr. Maurer said. Labor experts say that as employers adapt to the new reality of the changing climate, they will have to pay one way or the other.“The truth is that the changes required probably will be very costly, and they will get passed on to employers and consumers,” said David Michaels, who served as assistant secretary of labor at OSHA during the Obama administration and is now a professor at the George Washington School of Public Health.“But if we don’t want these workers to get killed we will have to pay that cost.”David Gelles More

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    Canada Offers Lesson in the Economic Toll of Climate Change

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    Wildfires are hurting many industries and could strain households across Canada, one of many countries reckoning with the impact of extreme weather.Canada’s wildfires have burned 20 million acres, blanketed Canadian and U.S. cities with smoke and raised health concerns on both sides of the border, with no end in sight. The toll on the Canadian economy is only beginning to sink in.The fires have upended oil and gas operations, reduced available timber harvests, dampened the tourism industry and imposed uncounted costs on the national health system.Those losses are emblematic of the pressure being felt more widely as countries around the world experience disaster after disaster caused by extreme weather, and they will only increase as the climate warms.What long seemed a faraway concern has snapped into sharp relief in recent years, as billowing smoke has suffused vast areas of North America, floods have washed away neighborhoods, and heat waves have strained power grids. That incurs billions of dollars in costs, and also has longer-reverberating consequences, such as insurers withdrawing from markets prone to hurricanes and fires.In some early studies of the economic impact of rising temperatures, Canada appeared to be better positioned than countries closer to the Equator; warming could allow for longer farming seasons and make more places attractive to live in as winters grow less harsh. But it is becoming clear that increasing volatility — ice storms followed by fires followed by intense rains and now hurricanes on the Atlantic Coast, uncommon so far north — wipes out any potential gains.“It’s come on faster than we thought, even informed people,” said Dave Sawyer, principal economist at the Canadian Climate Institute. “You couldn’t model this out if you tried. We’ve always been concerned about this escalation of damages, but seeing it happen is so stark.”Nonetheless, Mr. Sawyer and his colleagues did try to model it out. In a report last year, they calculated that climate-related costs would mount to 25 billion Canadian dollars in 2025, cutting economic growth in half. By midcentury, they forecast a loss of 500,000 jobs, mostly from excessive heat that lowers labor productivity and causes premature death. Then there are the increased costs to households, and higher taxes required to support government spending to repair the damage — especially in the north, where thawing permafrost is cracking roads and buildings.The recent fires have forced some lumber mills to idle. It’s not clear how widespread the damage will be to forest stocks.Jen Osborne for The New York TimesIt is too early to know the cost for the current fires, and several months of fire season remain. But the consulting firm Oxford Economics has forecast that it could knock between 0.3 and 0.6 percentage points off Canada’s economic growth in the third quarter — a big hit, especially since hiring in the country has already slowed and households have more debt and less savings than their neighbors to the south.“We already think we’re teetering into a downturn, and this would just make things worse,” said Tony Stillo, director of economics for Canada at Oxford. “If we were to see these fires really disrupt transportation corridors, disrupting power supply to large population centers, then you’re talking about even worse consequences.”Estimates of the overall economic drag are built on damage to particular industries, which vary with each disaster.The recent fires have left some lumber mills idle, for example, as workers have been evacuated. It’s not clear how widespread the damage will be to forest stocks, but provincial governments tend to reduce the amount of timber they allow to be harvested after large blazes, according to Derek Nighbor, chief executive of the Forest Products Association of Canada. Infestations of pine beetles, which have flared up as milder winter temperatures fail to kill off the pests, have curtailed logging in British Columbia.Although lumber prices have been depressed in recent months as higher interest rates have weighed on home construction, Canada is confronting a housing shortage as it works to bring in millions of new immigrants. Reduced availability of wood will make its housing problem more difficult to solve. “It’s safe to say there’s going to be a supply crunch in Canada as we work through this,” Mr. Nighbor said.The tourism industry is also being hit, as the fires erupted just as operators were going into the crucial summer season — sometimes far from the fires. Business plunged in the peninsula town of Tofino, a popular destination for whale watching off Vancouver Island, when its only highway access was cut off by a fire two hours away. The road has since reopened, but only one lane at a time, and drivers need to wait up to an hour to get through.Sabrina Donovan is the general manager of the Pacific Sands Beach Resort and the chair of Tofino’s local tourism promotion organization. She said that her hotel’s occupancy sank to about 20 percent from 85 percent in the course of June, and that few bookings were coming through for the rest of the year. Employers commonly house their staff during the summer, but after weeks without customers, many workers left for jobs elsewhere, making it difficult to maintain full service in the coming months.“This most recent fire has been pretty devastating for the majority of the community,” Ms. Donovan said, noting that the coast had never in her career had to deal with wildfires. “This is something we now have to be thinking about in the future.”The wildfires could depress spending when households are already strained.Jen Osborne for The New York TimesRegardless of the severity of any particular episode, the costs mount as disasters get closer to critical infrastructure and population centers. That is why the two most expensive years in recent history were 2013, when major flooding hit Calgary, and 2016, when the Fort McMurray fire wiped out 2,400 homes and businesses and hamstrung oil and gas production, the area’s main economic driver.This year, most of the burning has been in rural areas. While some oil drilling has been disrupted, the damage overall to the oil industry has been minor. The greater long-term threat to the industry is falling demand for fossil fuels, which could displace 312,000 to 450,000 workers in the next three decades, according to an analysis by TD Bank.But there is still a long, hot summer ahead. And the insurance industry is on alert, having watched the increasing damage in recent years with alarm. Before 2009, insured losses in Canada averaged around 450 million Canadian dollars a year, and now they routinely exceed $2 billion. Large reinsurers pulled back from the Canadian market after several crippling payouts, increasing prices for homeowners and businesses. That is not even counting the life insurance costs likely to be incurred by excessive heat and smoke-related respiratory ailments.Craig Stewart, vice president of federal affairs for the Insurance Bureau of Canada, said climate issues had become a primary concern for the organization over the past decade.The mounting cost of catastrophic events in CanadaPayouts including adjustment expenses by property and casualty insurers for disasters that total more than $30 million, in 2021 Canadian dollars.

    Source: Insurance Bureau of CanadaBy The New York Times“Back in 2015, we sent our C.E.O. across the country to talk about the need to prepare for a different climate future,” Mr. Stewart said. “At the time, we had the Calgary floods two years before in the rear view mirror. We thought, ‘Oh, we’ll get another event in two to three years.’ We never could’ve imagined that we’re now seeing two or three catastrophic events in the country per year.”That’s why the industry pushed hard for the Canadian government to come up with a comprehensive adaptation strategy, which was released in late June. It recommends measures like investing in urban forests to reduce the health effects of heat waves and developing better flood maps that help people avoid building in vulnerable areas. Fire and forestry experts have called for the forest service, decimated by years of austerity, to be restored, and prescribed burns to be scaled up — all of which costs a lot of money.Mike Savage, the mayor of Halifax, doesn’t have to be convinced that the spending is necessary. His city was the largest to sustain fire losses this spring, with 151 homes burned. That calamity came on the heels of Hurricane Fiona last year, which submerged much of the coastline. Mr. Savage worries about the fate of the isthmus that connects Nova Scotia to New Brunswick, and the power systems that now peak in the hot summer instead of the frigid winter.“I certainly believe that when you invest in mitigation there’s a dramatic positive impact from those investments,” Mr. Savage said. “It’s going to be a challenging time. To think we got through this fire and say, ‘OK, that’s good, we’re done,’ that would be a little bit naïve.” More

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    Why What We Thought About the Global Economy Is No Longer True

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    While the world’s eyes were on the pandemic, the war in Ukraine and China, the paths to prosperity and shared interests have grown murkier.When the world’s business and political leaders gathered in 2018 at the annual economic forum in Davos, the mood was jubilant. Growth in every major country was on an upswing. The global economy, declared Christine Lagarde, then the managing director of the International Monetary Fund, “is in a very sweet spot.”Five years later, the outlook has decidedly soured.“Nearly all the economic forces that powered progress and prosperity over the last three decades are fading,” the World Bank warned in a recent analysis. “The result could be a lost decade in the making — not just for some countries or regions as has occurred in the past — but for the whole world.”A lot has happened between then and now: A global pandemic hit; war erupted in Europe; tensions between the United States and China boiled. And inflation, thought to be safely stored away with disco album collections, returned with a vengeance.But as the dust has settled, it has suddenly seemed as if almost everything we thought we knew about the world economy was wrong.The economic conventions that policymakers had relied on since the Berlin Wall fell more than 30 years ago — the unfailing superiority of open markets, liberalized trade and maximum efficiency — look to be running off the rails.During the Covid-19 pandemic, the ceaseless drive to integrate the global economy and reduce costs left health care workers without face masks and medical gloves, carmakers without semiconductors, sawmills without lumber and sneaker buyers without Nikes.Calverton National Cemetery in New York in early 2021, where daily burials more than doubled at the height of the pandemic.Johnny Milano for The New York TimesCaring for Covid patients in Bergamo, Italy, in 2020. Cost-cutting and economic integration around the globe left health care workers scrambling for masks and other supplies when the coronavirus hit.Fabio Bucciarelli for The New York TimesThe idea that trade and shared economic interests would prevent military conflicts was trampled last year under the boots of Russian soldiers in Ukraine.And increasing bouts of extreme weather that destroyed crops, forced migrations and halted power plants has illustrated that the market’s invisible hand was not protecting the planet.Now, as the second year of war in Ukraine grinds on and countries struggle with limp growth and persistent inflation, questions about the emerging economic playing field have taken center stage.Globalization, seen in recent decades as unstoppable a force as gravity, is clearly evolving in unpredictable ways. The move away from an integrated world economy is accelerating. And the best way to respond is a subject of fierce debate.Of course, challenges to the reigning economic consensus had been growing for a while.“We saw before the pandemic began that the wealthiest countries were getting frustrated by international trade, believing — whether correctly or not — that somehow this was hurting them, their jobs and standards of living,” said Betsey Stevenson, a member of the Council of Economic Advisers during the Obama administration.The financial meltdown in 2008 came close to tanking the global financial system. Britain pulled out of the European Union in 2016. President Donald Trump slapped tariffs on China in 2017, spurring a mini trade war.But starting with Covid-19, the rat-a-tat series of crises exposed with startling clarity vulnerabilities that demanded attention.As the consulting firm EY concluded in its 2023 Geostrategic Outlook, the trends behind the shift away from ever-increasing globalization “were accelerated by the Covid-19 pandemic — and then they have been supercharged by the war in Ukraine.”A view of the destruction in Bakhmut, Ukraine, in May.Tyler Hicks/The New York TimesUkrainians lined up to receive humanitarian aid in Kherson last year. Trade and shared economic interests weren’t enough to prevent wars, as once thought.Lynsey Addario for The New York TimesIt was the ‘end of history.’Today’s sense of unease is a stark contrast with the heady triumphalism that followed the collapse of the Soviet Union in December 1991. It was a period when a theorist could declare that the fall of communism marked “the end of history” — that liberal democratic ideas not only vanquished rivals, but represented “the end point of mankind’s ideological evolution.”Associated economic theories about the ineluctable rise of worldwide free market capitalism took on a similar sheen of invincibility and inevitability. Open markets, hands-off government and the relentless pursuit of efficiency would offer the best route to prosperity.It was believed that a new world where goods, money and information crisscrossed the globe would essentially sweep away the old order of Cold War conflicts and undemocratic regimes.There was reason for optimism. During the 1990s, inflation was low while employment, wages and productivity were up. Global trade nearly doubled. Investments in developing countries surged. The stock market rose.The World Trade Organization was established in 1995 to enforce the rules. China’s entry six years later was seen as transformative. And linking a huge market with 142 countries would irresistibly draw the Asian giant toward democracy.China, along with South Korea, Malaysia and others, turned struggling farmers into productive urban factory workers. The furniture, toys and electronics they sold around the world generated tremendous growth.China joined the World Trade Organization at a signing ceremony in 2001. ReutersThe favored economic road map helped produce fabulous wealth, lift hundreds of millions of people out of poverty and spur wondrous technological advances.But there were stunning failures as well. Globalization hastened climate change and deepened inequalities.In the United States and other advanced economies, many industrial jobs were exported to lower-wage countries, removing a springboard to the middle class.Policymakers always knew there would be winners and losers. Still, the market was left to decide how to deploy labor, technology and capital in the belief that efficiency and growth would automatically follow. Only afterward, the thinking went, should politicians step in to redistribute gains or help those left without jobs or prospects.Companies embarked on a worldwide scavenger hunt for low-wage workers, regardless of worker protections, environmental impact or democratic rights. They found many of them in places like Mexico, Vietnam and China.Television, T-shirts and tacos were cheaper than ever, but many essentials like health care, housing and higher education were increasingly out of reach.The job exodus pushed down wages at home and undercut workers’ bargaining power, spurring anti-immigrant sentiments and strengthening hard-right populist leaders like Donald Trump in the United States, Viktor Orban in Hungary and Marine Le Pen in France.In advanced industrial giants like the United States, Britain and several European countries, political leaders turned out to be unable or unwilling to more broadly reapportion rewards and burdens.Nor were they able to prevent damaging environmental fallout. Transporting goods around the globe increased greenhouse gas emissions. Producing for a world of consumers strained natural resources, encouraging overfishing in Southeast Asia and illegal deforestation in Brazil. And cheap production facilities polluted countries without adequate environmental standards.It turned out that markets on their own weren’t able to automatically distribute gains fairly or spur developing countries to grow or establish democratic institutions.Jake Sullivan, the U.S. national security adviser, said in a recent speech that a central fallacy in American economic policy had been to assume “that markets always allocate capital productively and efficiently — no matter what our competitors did, no matter how big our shared challenges grew, and no matter how many guardrails we took down.”The proliferation of economic exchanges between nations also failed to usher in a promised democratic renaissance.Communist-led China turned out to be the global economic system’s biggest beneficiary — and perhaps master gamesman — without embracing democratic values.“Capitalist tools in socialist hands,” the Chinese leader Deng Xiaoping said in 1992, when his country was developing into the world’s factory floor. China’s astonishing growth transformed it into the world’s second largest economy and a major engine of global growth. All along, though, Beijing maintained a tight grip on its raw materials, land, capital, energy, credit and labor, as well as the movements and speech of its people.Globalization has had enormous effects on the environment — including deforestation in Roraima State, in the Brazilian Amazon.Victor Moriyama for The New York TimesDistributing food in Johannesburg in 2020, where the pandemic caused a significant spike in the need for assistance.Joao Silva/The New York TimesMoney flowed in, and poor countries paid the price.In developing countries, the results could be dire.The economic havoc wreaked by the pandemic combined with soaring food and fuel prices caused by the war in Ukraine have created a spate of debt crises. Rising interest rates have made those crises worse. Debts, like energy and food, are often priced in dollars on the world market, so when U.S. rates go up, debt payments get more expensive.The cycle of loans and bailouts, though, has deeper roots.Poorer nations were pressured to lift all restrictions on capital moving in and out of the country. The argument was that money, like goods, should flow freely among nations. Allowing governments, businesses and individuals to borrow from foreign lenders would finance industrial development and key infrastructure.“Financial globalization was supposed to usher in an era of robust growth and fiscal stability in the developing world,” said Jayati Ghosh, an economist at the University of Massachusetts Amherst. But “it ended up doing the opposite.”Some loans — whether from private lenders or institutions like the World Bank — didn’t produce enough returns to pay off the debt. Others were poured into speculative schemes, half-baked proposals, vanity projects or corrupt officials’ bank accounts. And debtors remained at the mercy of rising interest rates that swelled the size of debt payments in a heartbeat.Over the years, reckless lending, asset bubbles, currency fluctuations and official mismanagement led to boom-and-bust cycles in Asia, Russia, Latin America and elsewhere. In Sri Lanka, extravagant projects undertaken by the government, from ports to cricket stadiums, helped drive the country into bankruptcy last year as citizens scavenged for food and the central bank, in a barter arrangement, paid for Iranian oil with tea leaves.It’s a “Ponzi scheme,” Ms. Ghosh said.Private lenders who got spooked that they would not be repaid abruptly cut off the flow of money, leaving countries in the lurch.And the mandated austerity that accompanied bailouts from the International Monetary Fund, which compelled overextended governments to slash spending, often brought widespread misery by cutting public assistance, pensions, education and health care.Even I.M.F. economists acknowledged in 2016 that instead of delivering growth, such policies “increased inequality, in turn jeopardizing durable expansion.”Disenchantment with the West’s style of lending gave China the opportunity to become an aggressive creditor in countries like Argentina, Mongolia, Egypt and Suriname.A market in Buenos Aires. China has become an aggressive creditor to countries like Argentina. Sarah Pabst for The New York TimesSelf-reliance replaces cheap imports.While the collapse of the Soviet Union cleared the way for the domination of free-market orthodoxy, the invasion of Ukraine by the Russian Federation has now decisively unmoored it.The story of the international economy today, said Henry Farrell, a professor at the Johns Hopkins School of Advanced International Studies, is about “how geopolitics is gobbling up hyperglobalization.”Old-world style great power politics accomplished what the threat of catastrophic climate collapse, seething social unrest and widening inequality could not: It upended assumptions about the global economic order.Josep Borrell, the European Union’s head of foreign affairs and security policy, put it bluntly in a speech 10 months after the invasion of Ukraine: “We have decoupled the sources of our prosperity from the sources of our security.” Europe got cheap energy from Russia and cheap manufactured goods from China. “This is a world that is no longer there,” he said.Supply-chain chokeholds stemming from the pandemic and subsequent recovery had already underscored the fragility of a globally sourced economy. As political tensions over the war grew, policymakers quickly added self-reliance and strength to the goals of growth and efficiency.“Our supply chains are not secure, and they’re not resilient,” Treasury Secretary Janet L. Yellen said last spring. Trade relationships should be built around “trusted partners,” she said, even if it means “a somewhat higher level of cost, a somewhat less efficient system.”“It was naïve to think that markets are just about efficiency and that they’re not also about power,” said Abraham Newman, a co-author with Mr. Farrell of “Underground Empire: How America Weaponized the World Economy.”Economic networks, by their very nature, create power imbalances and pressure points because countries have varying capabilities, resources and vulnerabilities.Russia, which had supplied 40 percent of the European Union’s natural gas, tried to use that dependency to pressure the bloc to withdraw its support of Ukraine.The United States and its allies used their domination of the global financial system to remove major Russian banks from the international payments system.The Port of Chornomorsk near Odesa, last year. In 2021, Ukraine was the largest wheat exporter in the world.Laetitia Vancon for The New York TimesHarvesting grapes at a vineyard in South Australia. China blocked Australian exports of wine and other goods after the country expressed support for Taiwan.Adam Ferguson for The New York TimesChina has retaliated against trading partners by restricting access to its enormous market.The extreme concentrations of critical suppliers and information technology networks has generated additional choke points.China manufactures 80 percent of the world’s solar panels. Taiwan produces 92 percent of tiny advanced semiconductors. Much of the world’s trade and transactions are figured in U.S. dollars.The new reality is reflected in American policy. The United States — the central architect of the liberalized economic order and the World Trade Organization — has turned away from more comprehensive free trade agreements and repeatedly refused to abide by W.T.O. decisions.Security concerns have led the Biden administration to block Chinese investment in American businesses and limit China’s access to private data on citizens and to new technologies.And it has embraced Chinese-style industrial policy, offering gargantuan subsidies for electric vehicles, batteries, wind farms, solar plants and more to secure supply chains and speed the transition to renewable energy.“Ignoring the economic dependencies that had built up over the decades of liberalization had become really perilous,” Mr. Sullivan, the U.S. national security adviser, said. Adherence to “oversimplified market efficiency,” he added, proved to be a mistake.While the previous economic orthodoxy has been partly abandoned, it is not clear what will replace it. Improvisation is the order of the day. Perhaps the only assumption that can be confidently relied on now is that the path to prosperity and policy trade-offs will become murkier.A solar farm in Yanqing district, in China. The country makes 80 percent of the world’s solar panels.Gilles Sabrié for The New York Times More

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    New World Bank President Ajay Banga Leads at a Pivotal Moment

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    The incoming president will be under pressure to juggle the global institution’s ambitions to combat climate change and fight poverty.Ajay Banga officially became the 14th president of the World Bank on Friday and urged staff to join him in developing a “new playbook” for a global institution whose relevance has come into question in recent years.The ascension of Mr. Banga to be the next leader of the bank comes at a pivotal moment in its 77-year history. The global pandemic reversed decades of progress in poverty reduction, Russia’s war in Ukraine continues to be a threat to economic stability and the World Bank is under new pressure to become a more ambitious player in the fight against climate change.“Making good on our ambition will require us to evolve to maximize resources and write a new playbook, to think creatively, take informed risks and forge new partnerships with civil society and multilateral institutions,” Mr. Banga wrote in a note to staff that was viewed by The New York Times.Mr. Banga was nominated by President Biden in February after the resignation of David Malpass, the outgoing World Bank president who had been selected by former President Donald J. Trump. The World Bank’s executive board approved Mr. Banga in May following an extensive listening tour that included visits to eight countries and dozens of meetings with government officials around the world.In his message to staff, Mr. Banga defined the bank’s mission as aspiring to “create a world free from poverty on a livable planet.”It is the second part of that mission by which Mr. Banga will be likely be judged.Mr. Malpass left the job a year early after failing to sufficiently demonstrate his commitment to combating global warming amid a renewed emphasis from the Biden administration broadening the bank’s focus on the environment.However, Mr. Banga, a former chief executive of Mastercard, does not bring extensive climate credentials to the job and will be under pressure to demonstrate progress on the bank’s environmental agenda. He has described the tasks of dealing with climate change and poverty as intertwined.“The World Bank’s challenge is clear: It must pursue both climate adaptation and mitigation; it must reach out to lower-income countries without turning its back on middle-income countries; it must think globally but recognize national and regional needs; it must embrace risk but do so prudently,” Mr. Banga wrote in a statement to World Bank’s executive board that accompanied his memo to staff.Activists protest during meetings of the International Monetary Fund and World Bank in April.Yuri Gripas for The New York TimesClimate activists plan to appear outside the World Bank on Friday and attempt to hand postcards to staff with demands that they want Mr. Banga to heed during his first 100 days on the job. They continue to be frustrated that the World Bank finances coal, oil and gas projects despite its pledges to prioritize clean energy projects.Mr. Banga is expected to use his expertise to amplify the resources of the World Bank and build new partnerships between the private and public sectors. The former finance executive added in his memo that accomplishing the World Bank’s many goals will require an annual global investment of trillions of dollars.Mr. Banga will also face a difficult diplomatic task as he seeks to satisfy the climate ambitions of the United States and Europe while facing skepticism from some developing countries. He will also confront the delicate task of urging China, a major World Bank shareholder and creditor, to allow poor countries that have borrowed huge sums from Beijing to restructure their debts.The World Bank president is traditionally chosen by the United States; the managing director of the International Monetary Fund is selected by the European Union.Mr. Banga met on Thursday with Treasury Secretary Janet L. Yellen. They discussed ways to refine how the bank operates and make it more agile and responsive, according to a summary of their conversation released by the Treasury Department. More

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    G7 Countries Borrow China’s Economic Strategy

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    Wealthy democracies rev up an effort to spend trillions on a new climate-friendly energy economy, while stealing away some of China’s manufacturing power.Midway through his face-to-face meeting with President Biden in Indonesia last fall, the Chinese leader, Xi Jinping, offered an unsolicited warning.Mr. Biden had in the preceding months signed a series of laws aimed at supercharging America’s industrial capacity and imposed new limits on the export of technology to China, in hopes of dominating the race for advanced energy technologies that could help fight climate change. For months, he and his aides had worked to recruit allied countries to impose their own restrictions on sending technology to China.The effort echoed the sort of industrial policy that China had employed to become the world’s manufacturing leader. In Bali, Mr. Xi urged Mr. Biden to abandon it.The president was not persuaded. Mr. Xi’s protests only further convinced Mr. Biden that America’s new industrial approach was the right one, according to a person familiar with the exchange.As Mr. Biden and fellow leaders of the Group of 7 nations meet this weekend in Hiroshima, Japan, a centerpiece of their discussions will be how to rapidly accelerate what has become an internationally coordinated round of vast public investment. For these wealthy democracies, the goal is both to reduce their reliance on Chinese manufacturing and to help their own companies compete in a new energy economy.Mr. Biden’s legislative agenda, including bills focused on semiconductors, infrastructure and low-emission energy sources, has begun to spur what could be trillions of dollars in government and private investment in American industrial capacity. That includes subsidies for electric vehicles, batteries, wind farms, solar plants and much more.The spending — the United States’ most significant intervention in industrial policy in decades — has galvanized many of America’s top allies in Europe and Asia, including key leaders of the Group of 7. European nations, South Korea, Japan, Canada and others are pushing for increased access to America’s clean-energy subsidies, while launching companion efforts of their own.“This clean-tech race is an opportunity to go faster and further, together,” Ursula von der Leyen, the president of the European Commission, said after an economy-themed meeting at the Group of 7 summit on Friday.“Now that the G7 are in this race together, our competition should create additional manufacturing capacity and not come at each other’s expense,” she said.Mr. Biden touring a semiconductor manufacturer in Durham, N.C., in March.Al Drago for The New York TimesMr. Biden and his Group of 7 counterparts have embarked on a project with two ambitious goals: to accelerate demand, even by decades, for the technologies needed to reduce emissions and fight climate change, and to give workers in the United States and in allied countries an advantage over Chinese workers in meeting that demand.Much of that project has roared to life since the G7 leaders met last year in the German Alps. The wave of recent Group of 7 actions on supply chains, semiconductors and other measures to counter China is based on “economic security, national security and energy security,” Rahm Emanuel, the U.S. ambassador to Japan, told reporters this week in Tokyo.He added: “This is an inflection point for a new and more relevant G7.”Mr. Emanuel said the effort reflected a growing impatience among Group of 7 leaders with what they call Beijing’s use of economic measures to punish and deter behavior by foreign governments and companies that China’s officials do not like.But more than anything, the shift has been fueled by urgency over climate action and by two laws Mr. Biden signed last summer: a bipartisan bill to shower the semiconductor industry with tens of billions of dollars in government subsidies, and the climate provisions of the so-called Inflation Reduction Act, which companies have jumped to cash in on.Those bills have spurred a wave of newly announced battery plants, solar panel factories and other projects. They have also set off an international subsidy race, which has evolved after being deeply contentious in the immediate aftermath of the signing of the climate law.The lucrative U.S. supports for clean energy and semiconductors — along with stricter requirements for companies and government agencies to buy U.S.-made steel, vehicles and equipment — have put unwelcome pressure on competing industries in allied countries.Workers at a solar energy parts and batteries factory in Suqian, China, in February.Alex Plavevski/EPA, via ShutterstockSome of those concerns have been quelled in recent months. The United States signed a deal with Japan in March that will allow battery materials made in Japan to qualify for the benefits of the Inflation Reduction Act. The European Union is pursuing a similar agreement, and has proposed its own $270 billion program to subsidize green industries. Canada has passed its own version of the Biden climate law, and Britain, Indonesia and other countries are angling for their own critical mineral deals.Administration officials say once-rankled allies have bought into the potential benefits of a concerted wealthy-democracy industrial strategy.At the Group of 7 meeting, “you will see a degree of convergence on this that, from our perspective, can continue the conversion of the Inflation Reduction Act from a source of friction into a source of cooperation and strength between the United States and our G7 partners,” Jake Sullivan, the national security adviser, told reporters on Air Force One as Mr. Biden flew to Japan.Some Group of 7 officials say the alliance has much more work to do to ensure that fast-growing economies like India benefit from the increased investments in a new energy economy. “It is important that the acceleration that is going to be created by this doesn’t disincentivize investment around the world,” Kirsten Hillman, the Canadian ambassador to the United States, said in an interview.One country they don’t want to see benefit is China. The United States has issued sweeping restrictions on China’s ability to access American technology, namely advanced chips and the machinery used to make them. And it has leaned on its allies as it tries to enforce global restrictions on sharing technology with Russia, as well as China. All of those efforts are meant to hinder China’s continued development in advanced manufacturing.Biden officials have urged allied countries not to step in to supply China with chips and other products it can no longer get from the United States. The United States is also weighing further restrictions on certain kinds of Chinese chip technology, including a likely ban on venture capital investments that U.S. officials are expected to discuss with their counterparts in Hiroshima.Although many of the Group of 7 governments agree that China poses an increasing economic and security threat, there is little consensus about what to do about it.Mr. Biden with Xi Jinping, China’s leader, in Bali, Indonesia, in November.Doug Mills/The New York TimesJapanese officials have been relatively eager to discuss coordinated responses to economic coercion from China, following Beijing’s move to cut Japan off from a supply of rare earth minerals during a clash more than a decade ago.European officials, by contrast, have been more divided on whether to risk close and lucrative business ties with China. Some, like the French president, Emmanuel Macron, have pushed back on U.S. plans to decouple supply chains with China.Ms. von der Leyen, the European Commission president, has been pushing for a “de-risking” of relations with China that involves recognizing China’s growing economic and security ambitions while reducing, in targeted ways, European dependence on China for its industrial and defense base. European officials said in Hiroshima that they had been pleased to see American leaders moving more toward their approach, at least rhetorically.Still, the allies’ industrial policy push threatens to complicate already difficult relations with China. Consulting and advisory firms with foreign ties have been subject to raids, detainments and arrests in China in recent months. Chinese officials have made clear that they see export controls as a threat. Adopting the phase American officials use to criticize Beijing, the Chinese Embassy in Washington warned the Group of 7 this week against what it called “economic coercion.”Mr. Xi issued a similar rebuke to Mr. Biden in Bali last fall. He pointed to the late 1950s, when the Soviet Union withdrew support for the Chinese nuclear program.China’s nuclear research continued, Mr. Xi said, and four years later, it detonated its first atomic bomb. More

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    U.S. Solar Makers Criticize Biden’s Tax Credits as Too Lax on China

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    U.S.-based manufacturers of solar products say rules issued by the Biden administration on Friday will “cement China’s dominance” over the solar industryBiden administration rules released on Friday that will determine which companies and manufacturers can benefit from new solar industry tax credits are being criticized by U.S.-based makers of solar products, who say the guidelines do not go far enough to try to lure manufacturing back from China.The rules stem from President Biden’s sweeping clean energy bill, which offers a mix of tax credits and other incentives to try and spur the construction of more solar factories in the United States and reduce the country’s reliance on China for clean energy goods needed to mitigate climate change.The Treasury Department, in guidance issued on Friday, said it would offer a 10 percent additional tax credit for facilities assembling solar panels in the United States, even if they import the silicon wafers used to make those panels from foreign countries. Under the Biden administration’s new climate legislation, solar and wind farms can apply for a 30 percent tax credit on the costs of their facilities.Senior administration officials told reporters on Thursday that they were trying to take a balanced approach, one that leaned toward forcing supply chains to return to the United States. But China’s dominance of the global solar industry has created a tricky calculus for the Biden administration, which wants to promote U.S. manufacturing of solar products but also ensure a plentiful supply of low-cost solar panels to reduce carbon emissions.The officials said that the Biden administration would have the leeway to change the rules when American supply chains become stronger.“The domestic content bonus under the Inflation Reduction Act will boost American manufacturing, including in iron and steel, so America’s workers and companies continue to benefit from President Biden’s Investing in America agenda,” Treasury Secretary Janet L. Yellen said in a statement. “These tax credits are key to driving investment and ensuring all Americans share in the growth of the clean energy economy.”Critics said the new rules would not go far enough to give companies incentives to move the solar supply chain out of China.Mike Carr, the executive director of the Solar Energy Manufacturers for America Coalition, which includes solar companies with U.S. operations like Hemlock Semiconductor, Wacker Chemie, Qcells and First Solar, called the move “a missed opportunity to build a domestic solar manufacturing supply chain.”“The simple fact is today’s announcement will likely result in the scaling back of planned investments in the critical areas of solar wafer, ingot, and polysilicon production,” he said in a statement. “China is producing 97 percent of the world’s solar wafers — giving them substantial control over both polysilicon and cell production. We fear that this guidance will cement their dominance over these critical pieces of the solar supply chain.”A four-acre solar rooftop in Los Angeles. The Biden administration wants 100 percent of the nation’s electricity to come from carbon-free energy sources by 2035.Mario Tama/Getty ImagesThe Biden administration has set an ambitious goal of generating 100 percent of the nation’s electricity from carbon-free energy sources by 2035, a goal that may require more than doubling the annual pace of solar installations.The United States still relies heavily on Chinese manufacturers for low-cost solar modules, although many Chinese-owned factories now make these goods in Vietnam, Malaysia and Thailand.China also supplies many of the key components in solar panels, including more than 80 percent of the world’s polysilicon, which most solar panels use to absorb energy from sunlight. And a significant portion of Chinese polysilicon comes from the Xinjiang region, where the U.S. government has banned imports because of concerns over forced labor.Other companies in the solar supply chain, which rely on imported components, were more positive about the Treasury Department’s guidance.Abigail Ross Hopper, the chief executive of the Solar Energy Industries Association, said the guidance was an important step forward that would “spark a flood of investment in American-made clean energy equipment and components.”“The U.S. solar and storage industry strongly supports onshoring a domestic clean energy supply chain, and today’s guidance will supplement the manufacturing renaissance that began when the historic Inflation Reduction Act passed last summer,” she said.Congressional Republicans have already targeted the Biden administration’s climate legislation, saying that it fails to set tough guidelines against manufacturing in China and that it may funnel federal dollars to Chinese-owned companies that have set up in the United States.The Biden administration is also dispensing funding to build up the semiconductor and electric vehicle battery industries. Guidelines for that money include limits on access to so-called foreign entities of concern, like Chinese-owned companies. But the Inflation Reduction Act does not contain guardrails against federal dollars going to the U.S. operations of Chinese solar companies.In a congressional hearing on April 25, Representative Jason Smith, chairman of the House Ways and Means Committee, pointed to the Florida facilities of JinkoSolar, a Chinese-owned manufacturer, as being eligible for federal tax credits.“Work at the plant involves robots placing strings of solar cells — which are largely sourced from China — onto a solar panel base,” a fact sheet released by Mr. Smith said.Mr. Biden has also clashed with domestic solar manufacturers over a separate trade case that would see tariffs imposed on solar products imported from Chinese companies based in Southeast Asia.Mr. Biden’s decision to waive the tariffs for two years angered Republicans and some Democrats in Congress, who said U.S.-based manufacturers deserved more protection. In recent weeks, the House and Senate approved a measure to reverse the president’s decision, which Mr. Biden is expected to veto. More