Group 1: Green Industrial Policy Overview - Green industrial policies are increasingly viewed as essential for achieving net-zero emissions and promoting economic recovery and job growth[6] - The OECD reports that fiscal support for low-carbon technologies has significantly increased, with both the US and EU allocating 3.0% of GDP to green initiatives post-COVID[19] - The number of OECD countries integrating green industrial policy goals into budget planning rose from 14 to 24 between 2020 and 2022[19] Group 2: Challenges and Controversies - Green industrial policies face challenges such as complex design and execution, potential misallocation of public funds, and trade tensions[6] - The implementation of the US Inflation Reduction Act (IRA) is projected to cost between $800 billion and $1.2 trillion over the next decade[34] - Subsidy policies can lead to market distortions, supporting inefficient firms and potentially increasing overall emissions due to reduced incentives for energy conservation[36] Group 3: Economic Implications - The cost of achieving emissions reductions through subsidies can be significantly higher than through carbon pricing mechanisms, with some estimates showing costs up to 1,000 euros per ton of CO2 for early renewable energy policies in France and Germany[35] - In China, the marginal cost of emissions reduction from electric vehicle subsidies is approximately 4,453 RMB (about $712), far exceeding current carbon market prices[35] Group 4: International Trade and Competition - Green subsidy measures can exacerbate global subsidy races and distort international trade, particularly when favoring domestic suppliers[36] - Trade barriers resulting from subsidy policies may lead to increased production costs and hinder global economic stability[37] - Developing countries may struggle to compete with wealthier nations in green technology due to limited fiscal resources, exacerbating global inequalities in green investment[39]