Project SyndicateProject Syndicate

The right way to intervene in clean tech

By Armond Cohen, Andreas Goldthau and Simone Tagliapietra

03 Aug 2023 · 3 min read

informed Summary

  1. Western governments are shifting from relying on markets to drive innovation to state intervention in order to accelerate the transition to a low-carbon economy.

BOSTON/ERFURT/BRUSSELS – As Western governments face the increasingly urgent task of accelerating the transition to a low-carbon economy, the pendulum has swung away from a heavy reliance on markets to drive innovation toward state intervention. Fearing China’s dominance in clean-tech supply chains, and recognizing the potential for job creation, the United States has put in place a wide range of industrial policies that support the development and deployment of green solutions.

For example, the US Inflation Reduction Act openly encourages reshoring by offering generous government support for firms building green-manufacturing capacity in the country. Following suit, the European Union’s Net-Zero Industry Act introduces a domestic clean-tech manufacturing target, marking a paradigm shift in Europe’s approach to economic governance.

Sign in to informed

  • Curated articles from premium publishers, ad-free
  • Concise Daily Briefs with quick-read summaries
  • Read, listen, save for later, or enjoy offline
  • Enjoy personalized content