Is Place-Based Green Industrial Policy Effective? Evidence from the Inflation Reduction Act

About the Research

We estimate the short-term effects of a place-based green industrial policy embedded in the U.S. Inflation Reduction Act (IRA), which targets “Energy Communities”—areas historically dependent on fossil fuels—with enhanced tax credits for solar and wind energy. These communities are characterized by long-term economic decline and are considered vulnerable to the energy transition. Using a difference-in-differences approach, we compare treated and untreated areas to assess impacts on investment, labor demand, and political outcomes.

Combining data from the Clean Investment Monitor, Lightcast job postings, MIT Election Lab, and the Yale Program on Climate Change Communication, we find that solar energy investment increases by approximately 60% in targeted areas—driven by large-scale projects—while wind investment remains unaffected. We detect no statistically significant effects on job postings in either solar or wind sectors, and no discernible shifts in electoral outcomes or climate policy support.

These findings suggest that while place-based incentives can successfully steer private investment in renewable energy, they may be insufficient—at least in the short run—for generating local employment or shifting political attitudes.

About Joep Keuzenkamp
Joep Keuzenkamp began his PhD at the Utrecht University School of Economics in 2023. His research focuses on the distributional effects of climate policy and their implications for political support. He primarily applies causal inference methods to investigate these relationships.

Joep holds degrees in Econometrics (BSc and MSc) and Spanish Language and Literature with a major in Latin American Studies (BSc), all from the University of Amsterdam. Before starting his PhD, he worked on privacy-preserving machine learning as a developer, and later as a research associate conducting survey-based research on national policy for Dutch public institutions.

In addition to his research, Joep is actively involved in teaching. He contributes to several courses across the Bachelor’s and Master’s programs in Economics, with a focus on environmental economics and policy in the MSc Economic Policy program and public economics in the BSc Economics program. He also supervises Bachelor’s and Master’s theses.