Climate Policies and Protectionism

by Nicolò Florenzio (Research Associate, E-axes Forum)

Last year, both the U.S. and the EU have announced the introduction of their own climate policy packages. While the U.S. Inflation Reduction Act subsidizes clean energy production and manufacturing of clean technologies, the EU Carbon Border Adjustment Mechanism levies a tax on the carbon content of imported goods. Even though these policies differ in their approach, both of them may well be considered as protectionist measures and their interaction may have a backlash on the already delicate status of international trade.

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