Competitiveness, Constraints, & Coordination: A Strategy for Accelerating Energy Transition Investment in the Great Lakes

This report by RMI outlines a strategic framework—focused on competitiveness, constraints, and coordination—to accelerate energy transition investment in the Great Lakes region. It argues that while the region possesses significant industrial legacies and innovation assets, it faces structural hurdles such as slow population growth, labor shortages, and a lack of cohesive industrial strategies. The document proposes that states move beyond simple investment attraction toward coordinated industrial policies, leveraging federal incentives from the IRA, IIJA, and CHIPS Act to build regional clusters in sectors like EV batteries, low-carbon steel, and sustainable fuels.

• The Great Lakes region has seen over $40 billion in new energy transition investments since the start of 2021, with a heavy concentration in the electric vehicles (EVs) and batteries sector. Manufacturing construction spending in the region reached $3.3 billion in June 2023, representing a 150% increase over the pre-COVID average.
• Most Great Lakes states lack cohesive industrial strategies for priority energy transition sectors. In an analysis of EV batteries, near-zero-emissions steel, and sustainable aviation fuels, no state demonstrated a strong policy mix across all domains of a coordinated industrial strategy. For example, in EV battery manufacturing, only Michigan showed strong strategic coordination, and only Minnesota implemented relevant demand-side mechanisms.
• Economic development incentives in the region often lack quantitative targeting and best-practice design. Many subsidies have been awarded to projects with lower feasibility scores relative to the national average, increasing the likelihood that workers must be brought in from outside the metro area and reducing potential productivity spillovers.
• The region faces significant demographic and economic constraints, including slow population growth and a lack of economic dynamism. Between 2017 and 2022, the population of the Great Lakes fell by 160,000 people, the second-largest decrease in the US after the Northeast.
• Clean electricity deployment is uneven across the region, which may hinder the attraction of new investments. As of 2021, only 10% of energy produced in the Great Lakes was renewable, the lowest share of renewable energy consumption in the US at 8%. However, two-thirds of all planned generation in the region is now solar photovoltaic.
• Labor shortages are a critical constraint, exacerbated by low domestic and international migration. The region has an above-average presence in over 700 occupations required for energy transition industries, but nearly 800 other occupations need to be scaled up.
• Illinois and Minnesota are identified as national leaders in integrating equity and environmental justice into energy transition policies. Illinois's Climate and Equitable Jobs Act (CEJA) provides $40 million annually in grants for 'Equity Eligible Persons or Communities' to mitigate social and economic impacts of the transition.
• The region possesses a strong innovation ecosystem with over 350 energy-related research centers. Patent data shows the region is a hub for EV and energy storage innovation, with the Detroit-Warren-Dearborn area ranking third nationally in energy transition-related patents.
• States are increasingly using 'competitiveness funds' to help local entities access complex federal funding from the IRA, IIJA, and CHIPS Act. Minnesota established a $190 million State Competitiveness Fund, and Michigan created a $350 million Make it in Michigan Competitiveness Fund.
• The report suggests a regional investment attraction strategy to promote shared strengths to foreign direct investment (FDI). Analysis indicates that Ohio is best positioned for low-carbon materials, Michigan for electric transport, and Illinois for energy storage, low-carbon energy, and green hydrogen.

APA

RMI (2023). Competitiveness, Constraints, & Coordination: A Strategy for Accelerating Energy Transition Investment in the Great Lakes. https://rmi.org/resources/a-strategy-for-accelerating-energy-transition-investment-in-the-great-lakes/

Chicago

RMI. Competitiveness, Constraints, & Coordination: A Strategy for Accelerating Energy Transition Investment in the Great Lakes. 2023. https://rmi.org/resources/a-strategy-for-accelerating-energy-transition-investment-in-the-great-lakes/.

Wikipedia

{{cite report |author=RMI |title=Competitiveness, Constraints, & Coordination: A Strategy for Accelerating Energy Transition Investment in the Great Lakes |date=26 September 2023 |url=https://rmi.org/resources/a-strategy-for-accelerating-energy-transition-investment-in-the-great-lakes/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2023competitiveness, author = {{RMI}}, title = {{Competitiveness, Constraints, \& Coordination: A Strategy for Accelerating Energy Transition Investment in the Great Lakes}}, institution = {RMI}, year = {2023}, month = sep, url = {https://rmi.org/resources/a-strategy-for-accelerating-energy-transition-investment-in-the-great-lakes/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }