*Robinson Mayer is the editor-in-chief of Heatmap News and a journalist who writes primarily on climate and energy.
There is a poignant paradoxical corner in the furious reaction of European countries to the Biden administration's iconic climate bill. For the past 6~7 years, European government officials have consistently said that climate-friendly economies are the future.

"I'm convinced that the old growth model, which didn't roll without fossil fuels and pollution, is outdated."

That's what European Commission President Ursula von der Laien said in 2019. The time had come to embrace a "new growth strategy" that should be one that "creates jobs and fosters innovation while reducing carbon emissions."

This is exactly in line with the intent of the Inflation Reduction Act (IRA). But when President Biden signed the bill into law last August, European leaders denounced it as a "very aggressive" protectionist measure against global cooperation in the field of climate change. The Inflation Reduction Act calls for $370 billion to invest in new industries such as hydrogen, solar panels and zero-emission aviation fuel. The tax break of up to $7,500 for electric vehicles is one of the bill's key subsidies and applies only to electric vehicles assembled on the North American continent with batteries made primarily in the United States, using minerals produced in the United States or U.S. free trade partners.

This protectionism is completely antithetical to the fight against climate change that experts have portrayed throughout history. In fact, the expression "fight" against climate change itself contains the premise that one day humanity will unite and fight the final battle to end fossil fuels. But now there is reason to think that solving climate problems requires a certain kind of competition (not cooperation). All other things being equal, the fight against climate change could lead to more protectionism, more economic confrontation, and more trade wars.

Over the past half century, academia has come to understand that a stable and habitable climate is a public commons. (It is perhaps the largest, most frightening, and most important public good humanity manages.) At the same time, however, economists have found that fossil fuel consumption and the resulting carbon emissions are closely linked to economic development. Countries around the world engaged in climate negotiations face a terrible choice. Either we choose to "cooperate" and work with our neighbors to lower carbon emissions, or we can take the opportunistic path of driving economic growth by sneaking into our neighbors' emission reductions.

In other words, individual countries have an incentive to choose only their own interests against the interests of the world to solve the problem of climate change. It's a prisoner's dilemma. Nobel Prize-winning Yale economist William Nordhaus and other scholars have spent countless hours researching to solve this problem of free riding. Solutions other than international agreements seemed elusive.

About 10 years ago, however, changes began to be noticed. Developed countries have begun to chase both rabbits: economic growth and carbon emissions reduction. China, the world's largest emitter of climate change pollutants, has enjoyed enormous economic and strategic gains from a boom in its green technology industry. The world is beginning to understand that climate action is not really a trade-off—that reducing emissions doesn't mean giving up on economic growth. In fact, low-carbon technologies such as batteries and renewable energy were opportunities that promised future prosperity. This is because by creating cheap energy, it can provide the power to support the prosperity of human societies at a lower price than fossil fuels or combustion engines.

In 2020, political scientists Michael Arklin and Mato Mildenberger found that historically, countries have not reversed their climate commitments in the same way that their neighbors have withdrawn their climate commitments. Rather dominating a country's climate policy was a political competition within the country, a struggle between domestic forces over social and economic power. The conclusion of the Arklin and Mildenberger study was that climate policies create "new economic winners and losers," and that more climate policies are passed when the "winners" have the upper hand in domestic competition.

This can also be seen in the battle between the United States and Europe over each other's climate policies. The same goes for the conflict over how profits and future growth should be distributed between manufacturing, fossil fuel companies, workers and consumers. Meanwhile, business executives, activists, lobbyists and public officials have their own ideas about how to run the economy, and that also influences outcomes.

In 2022, Jonas Nam of the Johns Hopkins Graduate School of International Studies pointed out that export- and manufacturing-focused countries like Germany introduced national climate policies before countries that rely on imports. Jonas Nam interprets that manufacturing and its political allies saw opportunities in green technologies and pressured politicians to seize them.

These dynamics are not limited to export-driven economies. Inflation reduction legislation would help boost manufacturing in the United States. U.S. companies are looking for the same opportunity, and politicians are trying to build a base of public support to reduce pollution. However, there is a problem that if all countries try to profit from new industries, trade disputes will inevitably follow.

Clean energy is a growing strategic industry, and trade disputes always arise in that area, says Maureen Hinman, a former USTR representative and founder of the nonprofit Silverado Policy Accelerator. Civil aviation is a prime example. The United States and the European Union have been at odds for years over Boeing and Airbus. This is because both the United States and the European Union are looking to capture a larger share of the global aviation market.