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The United States will not apologize for prioritizing financial support for its own economy with the Inflation Reduction Act, President Biden’s senior clean energy advisor, John Podesta, told the Financial Times in an interview.
“We make no apologies for the fact that American taxpayer dollars ought to go to American investments and American jobs,” Podesta said, adding “We hope that the European industrial base will succeed, but it’s up to Europe to do some of the work. We’re not going to do that all for them.”
European Union and national government officials from the EU have slammed the IRA as harmful for European jobs in industries such as car manufacturing and energy.
The IRA stipulates government support of close to $400 billion for low-carbon technology and infrastructure. The EU is worried that this will give the U.S. an unfair advantage in the energy transition and the business opportunities it creates.
"It's not helping to build transatlantic value chains on the green transition, but rather actually severing those value chains," European trade commissioner Valdis Dombrovskis said in comments on the IRA this month.
French President Emmanuel Macron earlier warned that the IRA could lead to the fragmentation of the West.
The European Union, for all its decarbonization ambitions, has been pretty careful with subsidies but following the passing of the IRA and Washington’s obvious refusal to prioritize European jobs over local ones, this is beginning to change.
Earlier this month, the EU announced a Green Deal Industry Plan that includes more than $270 billion in subsidies to ensure “a level playing field”, according to European Commission President Ursula von der Leyen.
In his interview with the FT, Podesta dismissed the suggestion that the U.S. is in a race on low-carbon investments with the EU and noted that Washington’s generous support for the transition would spur more investments not just in the U.S. but around the world.
“The challenge of dealing with the climate crisis requires . . . a transformation of the global economy on a size and scale that’s never occurred in human history so there’s plenty of room for everybody to participate in that,” he said.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.