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US, EU challenge each other in race to be climate champions

February 2023
First the US last year approved a to invest in clean energy and reward climate-friendly businesses.

The European Union then complained that the plan would encourage international companies to do business in North America rather than in Europe.

Businesses in the US are getting so much government help that it mounts to unfair competition, the EU complained.

So, earlier this month, the EU presented its own huge to benefit businesses.

That means there’s a major political battle going on between the US and the EU to promote climate-friendly businesses and products.

In other words it could be said that the US and the EU are fighting for the title of biggest sugar daddies of climate initiatives.

so what?
Big investments to counter climate change are a good thing.

Still, governments’ race to offer the most super-sized rewards to businesses can be expensive. And in the end, it is the common citizen’s taxes that pay for all the government rewards.

Also, too much government help, including lower taxes and subsidies, could be bad for innovation.

When businesses count on getting government money, they may stop working hard to make products better and cheaper, critics argue.

Reference shelf:
America’s green subsidies are causing headaches in Europe (The Economist)

Why the US Inflation Reduction Act is an important step in the transition to clean energy (World Economic Forum)

Factbox: What's in the EU Green Deal Industrial Plan? (Reuters)

More by WONKedition:
Climate change cost billions in damages in 2022

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