A Green-Subsidy Arms Race Helps No One
Greater public support for clean-energy investment makes sense. A spending competition between the US and Europe doesn’t.
Faster and cheaper.
Photographer: Rolf Schulten/Bloomberg
President Joe Biden’s Inflation Reduction Act has caused consternation in Europe. Alarmed that its generous new incentives for green-energy projects will shift investment and production toward the US, European Union governments are working on how to respond. Giving member states freer rein to subsidize their own clean-tech manufacturers has moved on to the agenda.
Greater public support for green investment makes sense for the US and EU alike — but such efforts need to be well-designed and, above all, cooperative. An uncoordinated subsidy race will prove needlessly expensive and thus less effective.