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EU Green Deal and US climate laws: room for alignment?

Latest News 19 Sep 2023

The EU Green Deal and the U.S. Inflation Reduction Act share the common goal of decarbonisation. While both legislations prioritise the promotion of clean energy and the reduction of greenhouse gas emissions, they have different approaches and priorities. 

The EU Green Deal is a comprehensive set of measures launched by the European Union in 2019 with the goal of making Europe climate-neutral by 2050. It focuses on transforming the EU into a resource-efficient and competitive economy by promoting clean energy, sustainable industry, sustainable mobility, and circular economy principles. On the other hand, the U.S. Inflation Reduction Act (IRA) was enacted in the summer of 2022 as a budget reconciliation measure aimed at curbing inflation and investing in domestic clean energy production. 

Particularly and under the framework of the EU Green Deal, the European Net Zero Industry Act (NZIA) has been proposed as a response to the U.S. Inflation Reduction Act (IRA) to strengthen Europe's net-zero technology manufacturing ecosystem and level the competition. The NZIA, released by the European Union in March 2023, is a set of measures aimed at facilitating the transition to a carbon-neutral economy and enhancing Europe's industrial capabilities. It is designed to address the competitiveness challenge posed by the clean-tech subsidy schemes under the IRA and similar initiatives around the world. In order to do so, the proposal shortlisted a number of sectors that Europe considers crucial to reach climate neutrality by 2050. However, to effectively transition to a net-zero economy, all clean tech industries should have a role to play. By considering all clean tech industries, the Act can ensure a holistic approach to decarbonising the European economy, maximise the potential for sustainable and renewable energy, reduce greenhouse gas emissions, promote energy efficiency, and support the growth of a green and competitive industry.

The home appliance industry in Europe has been at the forefront of the circular economy and is leading the way towards decarbonisation. The industry is continuously working on developing innovative solutions to phase out hazardous substances from their products, to facilitate recycling processes, and to use secondary raw materials. Which makes it a perfect candidate for Europe’s race toward decarbonisation. 

Social sustainability is an essential aspect of achieving Europe's decarbonisation goals. The shift towards a low-carbon society affects the way people live and work, making social sustainability a crucial component of this transition. "There are three dimensions to sustainability: environmental, economic and social,” said Paolo Falcioni, APPLiA Director General to the community members of the European Society of Association Executives. “Sustainable development cannot be achieved if a segment of the population is marginalised or disadvantaged in the process." By addressing systemic inequalities, considering intersectionality, fostering social cohesion, and leveraging diverse perspectives, we can create a more just, inclusive, and resilient society that benefits everyone. The EU Green Deal should consider the affordability and accessibility of clean and sustainable solutions. Ensuring access to affordable renewable energy and energy-efficient technologies is crucial to prevent people from being left behind.

By collaborating on emissions reduction targets, research and development, economic policies, and social sustainability, Europe and the US can align their efforts toward decarbonisation and accelerate the transition to a sustainable and low-carbon future. Engaging in dialogue and sharing knowledge on social sustainability aspects of decarbonisation is key to addressing the impacts of the transition on communities and ensuring a just and equitable transition for all segments of society.

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