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Remarks at SME Climate Hub United States Launch

ASSISTANT SECRETARY PYATT: Thank you, Pamela, and good morning everybody. Huge thanks to the “We Mean Business” Coalition and “America is All In” for hosting this launch event.

This is literally my very first week at the State Department as our Assistant Secretary of State for Energy Resources. I’m really honored to start off that tenure by recognizing the critical role that small and medium sized enterprises (SMEs) play in our energy ecosystem.

I also want to congratulate the SME Climate Hub for its United States launch.

Thirty million American SMEs form the backbone of the U.S. economy. They account for nearly two-thirds of net new private sector jobs in recent decades. They are integral to our country’s economic health and to carrying out the economic transition and combatting climate change.

We simply won’t be able to meet our ambitious climate targets without America’s SMEs being part of the effort. And I think most American SMEs recognize that we can’t afford inaction. SMEs have to protect their operations from the effects of climate change and they have to adopt more cost-competitive and efficient energy sources.

That’s why I’m delighted to see initiatives like the SME Climate Hub expand efforts in the United States.

For 100 years energy has been central to America’s position as a global leader, and recent actions by the Biden-Harris administration are helping ensure that we retain that leadership position as we all work through the transformation of our energy system from one focused on fossil fuels to one driven by renewable sources.

It’s an overused phrase but I truly believe that we are at an inflection point in history. Global energy markets are in the midst of a profound shift as falling clean energy technology costs and supportive policy environments combine to up-end the economics of the power sector,

Renewables are increasingly cheaper than their fossil counterparts. Coupled with improved energy storage and efficiency, they are disrupting traditional energy markets in a profoundly positive way.

But unfortunately, the organic pace of energy transformation is not sufficient to meet either our climate or energy security goals. That’s where government policy comes in.

The Inflation Reduction Act, the IRA, represents an historic investment of $369 billion in climate and clean energy. The IRA will drive innovation and create unprecedented market demand for the technology and resources required to meet climate goals in the United States and indeed globally.

The IRA will help to reinforce the U.S. market as the most agile in the world in mobilizing finance for the energy transition.

SMEs will also be able to leverage this immense private sector opportunity at many points along the value chain. Indeed, SMEs will often be best positioned to identify strategic clean energy opportunities, enabling them to innovate, to grow and hire more rapidly and thereby succeed in the global market.

Thanks to the IRA SMEs will now sell and install solar kits, heat pumps, water heaters and EV charging stations at an unprecedented scale. SMEs that crack the code for low carbon construction material will spur beneficial market demand shifts.

All along the supply chain, thousands of components will be needed and will need to be manufactured for turbines, inverters, batteries, and other solar equipment. Not to mention the opportunities like to emerge from frontier sectors like hydrogen, carbon sequestration, small and modular nuclear reactors.

SMEs providing the climate-smart products and components sold around the world are an important part of our pathway to reducing our greenhouse gas emissions. We look forward to talking more about how SMEs can help decarbonize the global supply chain at COP{27) and to partnering with the SME Climate Hub in these efforts.

The 5,000 SMEs who made climate commitments on the Hub and jointed the UN’s Race to Zero will need to purchase clean energy to power their global operations and build supply chains that meet their climate commitments.

Larger corporations that work with SMEs are also striving to meet their own corporate pledges. Many of these companies’ energy demands are equal to that of a sovereign nation. If they can meet their clean energy commitments it will stimulate economic growth and reduce global emissions significantly and simultaneously.

Despite this demonstrated demand and potential for driving new investment, there are challenges for companies of all sizes trying to buy clean energy and power systems that historically have been built for fossil fuels. In some countries this will require reforms that are unfamiliar, while in others it requires infrastructure investments like strengthening the electricity grid.

The State…

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