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The disparity in green technology investment between the United States and Europe since the passing of the Inflation Reduction Act (#IRA), as described by the Financial Times, should be a real concern for the #EU.
What is the Inflation Reduction Act?
📉The $390 billion Inflation Reduction Act (IRA) marked a significant commitment to decarbonising the US economy and nurturing green industries, prompting a global push to support emissions reduction technologies. 🔎Analysts at Bruegel emphasised that the IRA in the US was oriented toward the "mass deployment of green technologies" rather than fostering innovation. How does investment in Europe compare?
🇪🇺The European Commission's response, the Net Zero Industry Act (#NZIA), showcases Europe's determination to bolster domestic manufacturing capacity for green technologies, albeit with complexities compared to the US's tax credit scheme. Read more here: https://lnkd.in/dhszFXhn
⚡️In the EU only $8.7 billion was directed towards funding start-ups in areas such as carbon storage, electric vehicles, and clean power in the year following the IRA's enactment, compared to over $21.7 billion invested in similar projects in the US.
🇫🇷France was the first EU nation to roll out tax credits similar to those in the US for eco-friendly projects, unveiling a substantial €20 billion policy in May. A unified continent-wide policy is the crucial missing piece in navigating the complex landscape of the green transition in Europe.
The transatlantic disparity in green technology investment is more than just economic; it is a reflection of the complex tensions underlying differing conceptions of the EU. The IRA has not only magnified the investment gap but also intensified the ideological struggle between advocates of the Single Market and the associated free-market economy and those advocating for a more robust role of the state, epitomised by the EU's industrial policy.
Read the full article here.
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