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A panel of experts discusses which climate policies are more effective in attracting capital to build green industries and also focuses on the global South.
The Inflation Reduction Act (IRA) has been in force in the USA since mid-2022. This law is intended to strengthen the American economy and promote climate protection and the country's energy security by subsidising green technologies. To this end, the government is making about 369 billion US dollars available for the next decade, preferably in the form of tax credits. In addition to climate policy goals, the IRA also pursues industrial policy intentions such as reducing dependence on other nations for raw materials. For example, the tax credits only take effect if a certain proportion of a product was manufactured in the USA or comes from countries with which a free trade agreement exists.
It is this aspect in particular that has intensified the competition for investment between the USA and the EU. Unlike the US government, EU climate policy has so far worked with sanctions such as European emissions trading ("sticks") and subsidies ("carrots"). In order to prevent the feared exodus of financially strong companies and to counter the IRA, the EU presented the Green Deal Industrial Plan in February this year. The European strategy paper contains agreements to ensure that European companies are also covered by the IRA and measures to improve the framework conditions for climate-neutral technologies. For example, subsidies from member countries are to be simplified and supply chains strengthened.
But which approach is more effective in attracting capital to build green industries, the US or the European? Is the EU at a turning point with the new plan? Will Europe be able to compete? And what impact might these developments have on the global South? We talked about this on 7 September 2023 in our PtX Lab Talk on the topic "Sticks or carrots against climate change? What can we learn from the EU Green Deal Industrial Plan and the US Inflation Reduction Act (IRA)?" Around 70 participants took part in the seventh edition of our digital event series.
Speakers of the day
Copyright: Vina_del_Mar_5.2017
Prof. Michael Mehling, Deputy Director at Center for Energy and Environmental Policy Research (CEEPR) at the Massachusetts Institute of Technology (MIT)
"Racing with Carrots: The Hare's Dilemma in U.S. Climate Policy"
Copyright: privat
Shaakira Karolia, Head of Infrastructure Finance & Investment at Infrastructure South Africa (ISA)
"South Africa: Green Hydrogen Position & Progress"
Copyright: EU
Robert Gampfer, Policy Officer at the Representation of the European Commission in Germany
"Net Zero Industry Act. Proposal for a Regulation on establishing a frame work of measures for strengthering Europe's net-zero technology products manufactering ecosystem"
The video recording of the event
The presentations of the speakers are available in the download area on the right. Interested parties can also follow all the presentations and the subsequent discussion along with the participants' questions in the video recording of the event.
Future events
We thank all participants for their interest and contributions. The next PtX Lab Talk will take place on November 23, 2023. We will discuss the topic "Grüne Chemikalien: Wieviel Power-to-X braucht eine nachhaltige Chemieindustrie?". Please note: This event will be held in German.
