Big Investments, No Electoral Reward: The Inflation Reduction Act, Low-Carbon Investments, and the 2024 US Presidential Election

The Inflation Reduction Act is one of the most prominent cases of green industrial policy. It was motivated by a strategic intention of increasing popular support for both climate policy and the Democratic party. Since its passage in August 2022, large private-sector investments in low-carbon manufacturing have been announced in many electorally pivotal areas in the United States. The expectation that these spatially concentrated benefits would boost local support for the pro-climate incumbent party – the Democrats – is supported by political science theories of local economic voting, mass feedback effects, and climate policy sequencing. Using propensity score matching and a difference-in-differences design, I estimate the causal effect of these announced low-carbon investments on the county-level two-party vote share of the Democratic party in the 2024 presidential election. I identify a substantially negligible and statistically insignificant positive effect (β = 0.153, 95% CI = [-0.100;0.405]) that is stable across various robustness checks. Given the most-likely nature of this case, my findings raise more general questions about the ability of green industrial policies to generate short-term electoral rewards and hereby challenge a core motivation for this increasingly prevalent climate policy strategy.