Will US, European government scrimp on clean energy over deficit woes?

Will US, European government scrimp on clean energy over deficit woes?

Washington: With US and European governments under pressure to cut spending and narrow deficits, clean energy investments - and countries’ green goals - are in new jeopardy, strategists and economists say. Political pressure to cut spending is rising. The UK is planning tax hikes and budget cuts to stabilize its public finances. In the US, a narrow Republican majority in the House of Representatives portends a showdown over spending. Even Brazil, which just elected the relatively climate-friendly Lula, is keen to signal fiscal rectitude. Renewable energy can look like an easy place to trim. Solar, wind and hydropower projects, though they lower the cost of energy in the long run, require big upfront costs. Even privately funded developments often rely on public commitments. And wealthy countries’ financial pledges to support clean energy in the developing world becomes a harder political sell when voters are dealing with inflation at home. “When you are constrained for investment resources, renewables are at a disadvantage,” said Erik BerglAf, chief economist at the Asian Infrastructure Investment Bank. “There will be a struggle.” In recent weeks, financing for the world’s energy transition seemed to gather momentum, with new agreements reached at COP27 in Egypt and at