Fighting Climate Change Was Costly. Now It’s Profitable.
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It is a good time to be in the decarbonization business in the United States. The Inflation Reduction Act—with its $374 billion cornucopia of green incentives, subsidies, and grants—was designed to entice private companies to invest in the transition away from fossil fuels. Initial reports already suggest that the IRA may be working. An analysis by American Clean Power, a lobbying group of renewable-energy companies, indicates that even just the anticipation of its bounty catalyzed $40 billion in investments and created nearly 7,000 jobs in the last few months of 2022.
Things are so rosy for the green industry in the United States, in fact, that the European Union feels left out. It is miffed that many of the IRA’s.” It includes $240 billion in loans and $21 billion in grants from EU coffers to subsidize green businesses, a relaxation of state-aid rules to allow member countries to offer subsidies, job training, faster permitting for “clean technology” projects, and measures to ensure access to “critical raw materials,” such as the lithium used in many electric-vehicle batteries. This week, economy ministers from Germany and France are in Washington, D.C., hoping to persuade the U.S. to allow EU-made electric cars and batteries to qualify for subsidies.
