Inside one of Europe’s biggest asset managers, there’s growing concern that Republican efforts to gut legislation supporting key industries such as clean energy may result in the US losing its status as a destination for investor capital.
The decision by House Republicans to pass a tax bill that would do away with many of the incentives contained in the 2022 Inflation Reduction Act threatens to upend investment strategies premised on the clean energy-transition. Even if the Senate votes to block some of the House proposals, European asset managers still have to contend with a new level of uncertainty and volatility that may ultimately force them to turn elsewhere, Bibani said.
“Project economics, supply-chain commitments, and capital flows may now pivot toward more stable jurisdictions like Canada or the EU, unless clarity is quickly restored,” he said.
If passed by the Senate, a repeal of the IRA “would mark a sharp reversal in US clean-tech policy,” Bibani said. That would inject “significant regulatory and political risk into the market, undermining the policy certainty and financial predictability that made the US the world’s leading destination for clean tech capital post-IRA.”
The upshot is that asset managers, both in Europe and the US, “are starting to direct more capital into European projects where they can see policy is more consistent and reinforced by fundamental demand,” he said.
The “sledgehammer” that House Republicans have taken to the IRA “is just one more example of the new volatility and uncertainty in US policy,” Christie said.
