President Joe Biden’s signature climate law is making it harder for developing countries to attract investment, says one prominent economist who works on climate finance.
The issue largely comes down to risk, says Vera Songwe, a senior fellow in the Africa Growth Initiative at the Brookings Institution.
Because the Inflation Reduction Act provides billions of dollars in tax credits for clean energy, investors may see the United States — and other developed countries with similar programs — as a safer bet that offers greater rewards than nations that haven’t done as much for their green markets.
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“Legislation in the developed and the advanced economies is actually working against that,” Songwe said.
