Clean Tech Arms Race: US Leads the Way, EU Follows, as Competition to Save the Planet Intensifies

The race to save our planet is heating up with the US leading the way in the development of green technologies. The US government has passed the Inflation Reduction Act, a historic bill aimed at reducing the country’s carbon footprint and establishing a new era of competition in the global marketplace. The US ranks high in cumulative greenhouse gas emissions, but is determined to change its status as a laggard in the reduction of its reliance on fossil fuels.

The scale of the subsidies offered by the IRA has prompted European lawmakers to match the incentives, as businesses warn that the continent could lose out on investments. The EU is facing calls from its leaders to step up funding and offer competitive incentives to stay attractive to the global market. The new competition in the clean tech sector has created a marked shift in climate geopolitics, as global powers compete to find solutions to temper humanity’s impact on the planet.

The US already has the advantage, being a larger market with fewer barriers to entry, but the EU is fragmented, with 27 independent countries making it a challenging market. Both the US and EU have a common rival in China, which is ahead in almost every green technology, including solar panels, batteries, electric cars, and hydrogen-producing electrolyzers. The incentives contained in the IRA are designed to minimize China’s role in the clean tech sector and break its hold on the electric vehicle battery supply chain. The future of our planet depends on international cooperation, and if the US and EU can work together to allow industries access to each other’s markets, the investments made in technologies will deliver greater good for all.