Policy Paper | The EU Response to the U.S. Inflation Reduction Act
The EU Response to the U.S. Inflation Reduction Act
New Policy Paper by Joan Villoslada Camps, Research Fellow, EsadeGeo, and Angel Saz-Carranza, Director, EsadeGeo.
This study analyses and compares the most recent American and EU economic plans regarding renewable energy and the green transition. In the summer of 2022, the American Government passed the Inflation Reduction Act (IRA) to develop its domestic clean-energy industries up to Chinese and European standards. Under the IRA, the US is introducing unprecedented subsidies and these maye trade distortive constituting a great deviation from WTO trade rules. The European Commission was initially outraged by the IRA measures and responded with a plan to better counteract the possible consequences of the IRA on the European market. Both economic plans are important for the green transition of the Western economies and signal a clear shift away from a neo-liberal free trade economic policy.
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