DAVOS, Switzerland (IDCA) - The US emerging as the leading attractor of investment in green technology was the talk of Davos at the recent World Economic Forum in Switzerland.

The source of the discussion is the Inflation Reduction Act of 2022 (IRA), a large and complex bill pushed by the Biden administration that included a bewildering variety of taxes, tax cuts, program supports, and incentives.

The new legislation can now be viewed as a green Trojan horse to conservatives in the US, including chief sponsor Sen. Joe Manchin, a Democrat from West Virginia, who is generally more concerned about supporting the fading coal business in his state than anything else.

The IRA includes $270 billion in green incentives, which have now attracted the attention of investors worldwide. At Davos, it seem to be perceived as the beginning of a zero-sum game in which the US will attract major investments in green technology at the direct expense of like investments in Europe.

The IRA Rattles the EU
Government and business leaders from within the EU worried about the organization's fragmented nature when compared to the single entity that is the US. Sweden-based Volvo's CEO Martin Lundstedt of noted that the world's largest economy “is (suddenly) creating a movement from a brown fossil-based platform to a green platform.”

European Commission President Ursula von der Leyen added to the discussion, saying, “to keep European industry attractive, there is a need to be competitive with offers and incentives that are currently available outside the European Union,” she said.

German Chancellor Olaf Scholz expressed his concerns indirectly, noting that the IRA's repercussions pose the question of “how to deal with your friends in the world.”

The bottom line, according to a report from Bloomberg: “If Europe doesn’t go big, too, it risks being left behind in the green energy revolution that’s become one of the dominant global themes.”

A Big, Complex, Clintonian Piece of Legislation
The US Congressional Budget Office (CBO), a non-partisan executive function that analyzes bills and their budgetary consequences, has determined that IRA will result in a total of $391 invested in energy security and climate change. This includes the $270 billion figure for tax incentives.

Other details, reminiscent of the numerous line items and level of detail often promulgated by the Clinton Administration in the 90s, include:

* $128 billion for renewable energy and energy storage

* $37 billion for manufacturing incentives

* $32 billion for rural economic development, including “racial justice in farming”

* $30 billion to support nuclear power (considered to be “green” but not renewable)

* $27 billion for a “green bank” to be created by amending 1963's Clean Air Act

* $22 billion for home energy supplies and another $14 billion to subsidize home energy efficiency

* $3 billion in tax incentives for new carbon capture at existing power plants

* 3 billion to electrify the United States Postal Service vehicle fleet

* $3 billion to reconnect neighborhoods by removing freeways

US President Joseph Biden was a prominent Senator and presidential supporter during the Clinton Administration, and is indeed older than former President Bill Clinton and former Presidential candidate Hillary Rodham Clinton. He has now pushed through a highly consequential, highly practical piece of legislation worthy of this predecessor's legacy.

As a result, the US has thrown down a green gauntlet. Europe has taken notice. It is now Europe's move.