The US Inflation Reduction Act and Europe’s response

This article discusses the landmark 2022 United States Inflation Reduction Act (IRA) and the EU’s response so far. First, it lays out the main clean energy provisions of the US IRA, their underlying objectives, and the projected impacts. Second, the article examines the EU’s concerns with the IRA and assesses the resulting policy initiatives of the European Commission proposed under the umbrella of the Green Deal Industrial Plan. While US and EU preferences and policy choices are clearly different, more international cooperation − between them and with others − will be needed for a successful green transition.