At Davos, European Distress Over a ‘Made in America’ Law

While the risk of lost investment in Europe is evident, some delegates said it was more important to praise Washington for its huge investment plans in clean energy and technology, after the nation had been berated in the past for not taking enough action on climate.

“In my view, the Inflation Reduction Act is, by far, the most important climate action after the Paris Agreement 2015,” Fatih Birol, the executive director of the International Energy Agency, said in an interview. “I understand that many countries, including the European countries, see that it may create some challenges for them.”

Though they have legitimate concerns, he added, “I would say that Europe can develop its own clean energy industrial framework as a complementary tool.”

Andrea Fuder, the chief purchasing officer for Volvo Group, the Swedish company that builds trucks, buses and construction equipment in the United States and other locations around the world, said her company appreciated the American legislation and expected it to help the company reach its net zero goals.

“There is now some noise in Europe about it but I think it’s now up to the European Union to find good answers to that,” Ms. Fuder said.

Ann Mettler, the vice president for Europe at Breakthrough Energy, an investment fund backed by Bill Gates, and a former director general at the European Commission, praised the Inflation Reduction Act for its simplicity and said it made a lot of sense because the United States needs to “accelerate the energy transition” and shift production of essential clean technologies away from China.

The law should lead to an investment boom in the United States, Ms. Mettler predicted, and potentially lead to breakthroughs in emerging technologies such as green hydrogen.