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

Author

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  • Keuzenkamp, Joep
  • Mazza, Jacopo
  • Rijkers, Bob
  • Stapleton, Katherine

Abstract

Is place-based green industrial policy effective? This paper examines the Inflation Reduction Act’s Energy Community provisions, which provide spatially targeted incentives for renewable energy investment. Using a difference-in-differences design with investment and job vacancy data, it shows that the probability of solar investment increases by 0.14 percentage points in targeted areas, equivalent to a 144% increase relative to its counterfactual level. Wind investment shows no response. Solar employment gains are modest and wind employment is unaffected. These findings suggest place-based incentives can stimulate green investment in designated locations, but may be less effective at generating local jobs.

Suggested Citation

  • Keuzenkamp, Joep & Mazza, Jacopo & Rijkers, Bob & Stapleton, Katherine, 2026. "Is Place-Based Green Industrial Policy Effective ? Evidence from the Inflation Reduction Act," Policy Research Working Paper Series 11337, The World Bank.
    • Handle: RePEc:wbk:wbrwps:11337
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    File URL: https://documents.worldbank.org/curated/en/099833003192616654/pdf/IDU-268c63ca-77f6-4bc6-a37f-fd3ef19849e2.pdf
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