One year on from the Inflation Reduction Act: International responses to the IRA F
11 August 2023
Further, according to American Clean Power, total investments in clean power projects received more private investment over the eight months following the IRA’s passage than they received in the five preceding years combined.3 The bill made the country more attractive to businesses in the space. [...] As the EU’s Green Deal response makes clear: “The majority of investments necessary to reach the Green Deal objectives will come from private capital attracted by the growth potential of the net-zero ecosystem.”8 In place of the state, the private sector has been entrusted with the next wave of industrialisation, with governments guiding market activity through incentives and regulations. [...] Each party agreed to “ensure the free trade of such minerals” and “affirms its obligation not to impose prohibitions or restrictions on imports of critical minerals from the territory of the other Party.”15 Japanese and American policymakers argued that this satisfied the domestic content requirements for critical mineral imports agreed under the IRA. [...] However, the government has diluted many of these climate measures during the cost of living crisis, which has led to uncertainty among potential investors.41 In addition, the government announced in Spring of 2024 that a Climate Emergency Response Fund (CERF) would be established to fund investments in climate-related initiatives in the private sector with total cash set proportionate to the prof. [...] 15 Ambassador Katherine Tai for the Government of the United States and Ambassador Tomita Koji for the Government of Japan, “Agreement between the Government of the United States of America and the Government of Japan on Strengthening Critical Minerals Supply Chains,” 03 2023, releases/2023/march/united-states-and-japan-sign-critical-mine.