Pass the CHIPS: How the bipartisan CHIPS and Science Act creates climate tech fields of the future

A close-up of several solid state micro-electronic switches on a chip made by Menlo Micro.
Image Credit: Menlo Micro

Since the Inflation Reduction Act passed in the Senate, FootPrint Coalition has been breaking down specific parts of the historic climate bill. The IRA has captured headlines, but what has gotten less attention is the other climate history-making bill: The CHIPS and Science Act, which Biden passed into law two weeks ago.

The CHIPS Act stands for Creating Helpful Incentives to Produce Semiconductors for America. More than a year in the making, the Act has been touted as a $280 billion effort to revitalize the American semiconductor industry since it flew off of Congress’s shelf last month.

While the name on the CHIPS "bag" reads ‘semiconductor,’ make no mistake: the CHIPS Act is also a climate bill. Inside the bag are tons of flavors of semiconductors. Often depicted as a microchip sending waves of energy to a device in signature neon techno-blue, a semiconductor is the ‘brain’ of modern technology.

Typically made from pure elements like silicon or germanium, this circuit puts the silicon in Silicon Valley. The chip comes in various computing flavors from smartphones and modern transportation to med-tech and AI, to clean energy.

Clean energy snacks make up about a quarter of the bill’s funding. Totaling $67 billion, this portion makes the CHIPS Act one of the largest climate investments in American history. These funds will be dedicated to supporting scientific research necessary to fight climate change, whether it be via nanotech, quantum computing, nuclear fusion, artificial intelligence, or other mechanisms needed for clean energy.

The funds will also be used for disaster-resilience research, the growth of zero-carbon technologies, and establishing a new federal office to organize clean-energy innovation.

The CHIPS Act, IRA, and last year’s Bipartisan Infrastructure Law are all interlocking pieces of legislation intended to solve the climate puzzle. Together, they mark a stark shift in congressional focus, as the CHIPS act alone tops all funding for renewable energy tax credits the government spent from 2005-2019, according to a report from the Congressional Research Service.

While historic, it's important to note the CHIPS bill authorizes its new clean energy spending instead of appropriating it. Due to this legal distinction agencies must go back to Congress in the future to secure the right to put funding toward specific purposes. This is similar to language used in the IRA, especially in sections that allocate funds towards agencies like EPA and USDA.

The Atlantic reports that if followed through, however, Congress could spend roughly $80 billion a year on zero-carbon energy funding, totaling upwards of $521 billion by the end of the decade. “The CHIPS and Science Act is going to inspire a whole new generation of Americans to answer that question,” Biden said early last week, speaking to reporters, “What next?”

So, sit back and grab some dip, and let's dig in to what’s next for this bill.

While the Act has immediate impacts such as funding for companies like Menlo Micro to boost domestic chip production, the majority of the climate effects will be for long-term and future decarbonization efforts. CHIPS’ cousin, the IRA is intended to be a comprehensive climate bill, launching its legislative tentacles into various sectors of climate industries in order to drive hasty reductions in pollution and promote the mass adoption of renewable alternatives to fossil fuels.

The IRA is, in a way, a hail mary for the U.S. to reach its 50 percent emission reduction goals by 2030, a target in accordance with the Paris Climate Agreement. CHIPS, on the other hand, looks beyond 2030, asking us that vital question: what’s next? How will we continue to reduce emissions after the effects of the IRA?

As a whole, CHIPS invests money into the technologies of the future considered to lower emissions after our critical 8-year ambition. An analysis by the International Energy Association determines that while global emission reductions by 2030 will come from technologies readily available today, in 2050, almost half of these reductions will come from technologies currently in their development and prototype stages.

Thus, while the IRA invests in well-established technologies like solar PV, offshore wind, and EVs, CHIPS bets on the cutting-edge technologies of tomorrow.

The IEA’s 2021 analysis called for governments to quickly increase and reprioritize their spending on research and development in addition to active clean energy deployment. The analysis paints a picture of the future, pointing out advanced batteries, electrolyzers for hydrogen, and direct air capture and storage as significant innovations for the next stage of the energy transition and planetary restoration.

A rendering of Climeworks' direct air capture system for carbon dioxide removal
Image Credit: Climeworks

By 2050, the energy landscape will look vastly different from the way it looks now. With an economy twice as big as today, 90 percent of global energy sources will come from renewables, with solar and wind occupying 70 percent.

The rest of the energy, the IEA describes, will come from nuclear. While fossil fuels will still be used in goods where carbon is embodied in the product such as plastics, these facilities will be fitted with carbon capture. The CHIPS and Science Act aims to get these technologies, most notably those highlighted by the IEA, ready to scale faster.

The $20 billion Directorate for Technology, for instance, promotes a transition-to-scale approach to push new technologies from the prototype stage to the mass market. As The Atlantic reports, this program is to prevent America from making the same mistake it did with solar: inventing a new clean technology without immediately commercializing it. While the directorate focuses on tech as a whole, 2 of the 10 funding areas are climate or clean-energy-related.

Moreover, the newly established clean energy innovation office has been tasked with studying “natural and anthropogenic disaster prevention or mitigation” as well as “advanced energy and industrial efficiency technologies,” including next-generation nuclear reactors, like those of FootPrint portfolio company Commonwealth Fusion Systems.

The bill is also estimated to deploy billions of dollars for new research, development, and demonstration to the Department of Energy, and the government’s in-house defense and energy research institutes. Earth and Environmental News reports that over the next 5 years, the bill will authorize $4 billion to seven of the DOE’s 17 labs.

The non-profit and non-partisan organization RMI estimates that a significant portion of these funds will be directed toward labs like the National Renewable Energy Laboratory, the Princeton Plasma Physics Laboratory, and Berkeley Lab, which conducts environmental-science research.

The bill’s allocations to the DOE don’t end there. According to the White House Fact Sheet, the Department is also directed to establish regional partnerships to promote economic and clean energy development in diverse geographic areas. This provision will allow the bill to promote regional technology hubs, with the goal of both spurring job creation in distressed communities, and further developing new climate sectors.

Additionally, the bill directs the DOE to start a research and development program to find new ways to curb greenhouse gas emissions from steel manufacturing processes, E&E reports. This includes advanced tools, technologies, and methods for low-emissions steel manufacturing.

Lastly, the National Ocean and Atmospheric Administration (NOAA) stands to get a handful from the bowl of chips, with $121 million in research funding over the next five years. The research will center around fighting ocean acidification: bettering scientists’ understanding of the impact of rising carbon dioxide levels in the ocean and marine ecosystems. This authorized funding will provide the National Science Foundation with $20 million for similar work over the same five years.

The CHIPS bowl isn’t completely full, however. It falls short on a few points. For example, a push by democrats to use CHIPS bills to bolster international climate aid through the authorization of $8.6 billion for the U.N. Green Climate Fund did not make it in, nor did democratic goals to crack down on illegal wildlife tracking due to Republican opposition.

A provision to use NOAA funding to better understand the impacts of deep-sea mining, a practice environmentalists warn could destroy seabeds and lead to unintended catastrophes in oceans was also shot down by the GOP.

Still, the CHIPS and Science Act represents a bipartisan effort to prepare the country for a zero-carbon future. Like the IRA, it is likely to spur new jobs across the country. Yet this time, those jobs are in industries much lesser known, and in some cases, brand new.

The CHIPS Act represents a three-pronged approach between the private sector, academia, and the government to reach net-zero and combat climate change. Preparing for a net-zero economy means not only scaling the technologies that will reduce emissions, but understanding and developing the ones that will sustain a world less reliant on fossil fuels. The CHIPS and Science Act goes beyond immediate progress, looks toward the future, and asks: What’s next?