12 Going Green, Going Digital: the twin transitions Carlo Carraro President Emeritus and Professor of Environmental Economics at the Ca' Foscari University of Venice CLIMATE SUBSIDIES ADOPTED BY EU AND US GOVERNMENTS WILL HAVE KNOCK-ON EFFECT ON TRADE "The climate-driven industrial policies recently adopted by the US and the EU will have an impact on international trade and economics alongside the beneficial effect of reducing global warming." Outlining some recently introduced US and EU climate-related industrial subsidies during Prysmian’s Sustainability Week 2023, Carraro firstly turned to the United States’ Inflation Reduction Act (IRA), signed into law by President Joe Biden in August 2022. This law calls for nearly $400 billion in subsidies and tax credits to encourage investment in green technologies, with the total amount uncapped. The IRA combines these incentives with local content requirements, which imply that eligible new power plants, electric vehicles or other infrastructure must be either produced in the United States or contain enough components made in the US.
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