Is Europe’s Green Investment Plan the Future of Climate Policy?

Paul Hockenos in Undark:

THE PASSAGE OF last year’s $369 billion Inflation Reduction Act, which despite its name is essentially a climate protection bill, was remarkable for its suddenness and sheer magnitude. In one stroke, it jacked global climate policy to another dimension, solidified the U.S. as a pacesetter on climate action, and showed the public sector’s willingness to undertake heavy lifting on a scale that had previously been inconceivable.

But the Inflation Reduction Act, or IRA, is also notable for its strategic approach. In the form of generous tax incentives, grants, and loan guarantees, it makes available hundreds of billions of dollars to directly subsidize American industry’s buildout of renewable energy sources, electrification, electric cars, hydrogen technology, and other green tech. Rather than capping and pricing carbon emissions to curb greenhouse gas emissions — and using that revenue to spur the economy’s green transformation — the U.S. is wagering that it can spend its way to a clean energy economy: that a big-enough carrot, in other words, will work as well or better than a stick. In that way, the IRA has “redefined the terms of the debate,” as Toby Couture, director of the Berlin-based consulting firm E3 Analytics, told me.

Now it appears the E.U. may be coming around to the American way of thinking.

More here.