The International Monetary Fund (IMF) has warned that a slip into protectionism will make it more difficult for poorer countries to obtain green technologies and reduce emissions as wealthier countries fight to have electric vehicles manufactured in their nations.
The Managing Director of IMF, Kristalina Georgieva stated in a blog post prior to the G20 finance ministers summit that there are “signs of progress, as major economies realign their fiscal frameworks to accelerate the green transition.”
“But policies should stay focused on that transition—rather than providing a competitive advantage to domestic firms,” Georgieva noted.
She added that policies should “be carefully designed to avoid wasteful spending or trade tensions, and to make sure that technology is shared with the developing world”.
Twenty of the largest economies in the world’s finance ministers made the almost annual summit promise to “combat protectionism” in Bengaluru, India.
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Everyone purchasing an electric vehicle in the US is eligible for a $7,500 incentive thanks to the latest Inflation Reduction Act. But, that car had to have been put together in North America.
Several nations that produce automobiles are incensed by this requirement because they regard it as an unfair effort to persuade automakers to move to the US.
The US administration has received complaints from the UK, South Korea, Japan, and the European Union.
In response, the European Union is considering relaxing existing regulations to enable states to give electric vehicle producers extra subsidies.
But, like Georgieva, activists and analysts from underdeveloped nations voiced their worries about these tactics.
Story was adapted from Climate Home News
