Publications Public finance Europe

How the EU can match the US Inflation Reduction-Act

10 February 2023 - Foreword of the week - By : Thomas PELLERIN-CARLIN

Last August, the US Congress adopted the Inflation Reduction Act (IRA). It became the epicentre of EU fears of seeing cleantech projects, like battery or solar panel gigafactories, settling in the US rather than in the EU. There is some rationality behind that fear. The IRA indeed provides sizable public funding, with 10 years predictability and the simplicity of having a single federal level scheme. Moreover, the IRA does not only subsidize cleantech manufacturing. For instance, in the case of electric vehicles, the IRA supports the mining of critical minerals, the manufacturing of the battery, the purchase of the electric car and the production of renewable electricity. In other words, with IRA the US now has a genuine long-term climate investment plan.

 

The IRA is a wake-up call for the EU, as is China’s Five years Plan and Japan’s 20 trillion Yen Green Transformation Programme. Let’s be clear. Seeing major Governments organising long-term climate investment plans is great news for climate action. In our latest brief published today, I4CE argues that the logical solution is an EU long-term climate investment plan. Yet, there is currently little political appetite for such a discussion. The Institute therefore recommends the European Commission to use the existing political momentum around the IRA and cleantech, to propose an EU Cleantech Investment Plan that focus on the scale-up and manufacturing of key clean technologies. The EU should scale green public procurement and launch EU-wide support schemes, as part of this plan.

 

Today the 27 Heads of States and Governments of the EU reconvene for a Special European Council. They should use this opportunity to provide political backing to an EU cleantech investment plan, and task their ministers to map and assess their own national schemes to identify synergies and gaps. This would help the European Commission design its Net-Zero Industry Act, tabled for 08 March 2023. However necessary, such Cleantech Investment Plan should only be the first step for a wider discussion. The EU needs to build a long-term climate investment plan that tackles all climate investment needs, such as public transport infrastructure or targeted support for low-income and middle-class Europeans. This is crucial to ensure EU, national and private investments turn all the European Green Deal objectives into tangible realities for businesses, workers and families.

 

Read the newsletter

To learn more
  • 10/03/2024
    Climate: The data driving budget debates in France. Public spending today and tomorrow

    Every year, the start of the budget debate in France is an opportunity to ask a number of questions: How much is public spending on climate? What is this money spent on? Which actors, both public and private, are on the receiving end? And above all: how should this spending develop in the future? Many numbers have been produced in France over the last few years and it is easy to get lost in the shuffle. This is why we wrote this handbook. We have gathered the information that we consider most important and tried to highlight what we know, what we do not yet know, and the key debates in France that politicians will have to hold and where they will have to quickly find compromises.  

  • 09/26/2024
    Overview of Climate Financing for French Local Authorities

    A comprehensive and up-to-date overview of the challenge of financing the low-carbon transition at the local level in France. Local authorities have a major role to play in achieving France’s 2050 carbon neutrality goals, as set out in the Stratégie nationale bas-carbone (SNBC). Due to their property and responsibilities, they must make numerous climate investments, implement strategies and action plans, and deploy initiatives to mobilise local actors.  

  • 09/13/2024 Foreword of the week
    An efficient EU Climate Adaptation Plan starts with assessing the costs

    Climate adaptation, preparedness and solidarity features prominently in the Political Guidelines for the new EU mandate, unveiled by Commission President Ursula von der Leyen in July. And with good reason: infrastructures, access to water, food production, life in European cities – to name but a few – are increasingly impacted by the effects of climate change. Europe urgently needs to prepare better for the impact of climate change, was the message in the European Climate Risk Assessment published by the European Environment Agency earlier this year.

See all publications
Press contact Amélie FRITZ Head of Communication and press relations Email
Subscribe to our mailing list :
I register !
Subscribe to our newsletter
Once a week, receive all the information on climate economics
I register !
Fermer