How to design Europe’s net-zero industry plan
(EurActiv, 6 Mar 2023) In the race to avoid climate breakdown, talk of a subsidy race with the United States is misplaced. EU leaders would be better off focusing on making the Green Deal Industrial Plan as effective as possible to ensure win-wins, write Jakob Hafele and Jonathan Barth.
Jakob Hafele and Jonathan Barth are co-founders of the ZOE Institute for Future-fit Economies.
EU leaders appear to be stuck in a race mentality on industrial policy. The most recent Council conclusions smack of playing catch-up with the US Inflation Reduction Act with language around sectors “adversely impacted by foreign subsidies”.
This one-upmanship approach to the Green Deal Industrial Plan is misplaced; the global race to avert climate breakdown will not be won by any one actor alone.
The markets for green technologies are huge. Solar, heat pumps, hydrogen, and electric vehicles will need many times the additional production capacity in the next decades. In solar alone, only 109 GW is currently installed globally, and by 2050, this amount must increase to 6000 GW. We are just at the beginning, and there is more than enough to go around.
When heads of state meet again later this month, they will do better to look at how to design industrial strategy and where to target. Done right, it can greatly contribute to the EU’s emission reduction efforts and European cohesion.