IPEF to Focus on Renewable Energy, Supply Chain
- May 24, 2022
- Posted by: Quatro Strategies
- Category: Cleantech
The Indo-Pacific Economic Framework (IPEF) led by the United States will focus on investments in clean energy infrastructure, decarbonization and bolster regional supply chains.
The economic framework is backed by 12 other nations in the Indo-Pacific region. Together with the U.S. they account for 40% of the world’s GDP. China is not included in the new agreement.
The IPEF focuses on trade, supply chains, clean energy, and tax and anti-corruption measures. The 12 participants said they will work together on technology and financing for clean energy and decarbonization measures, in line with the Paris Climate Accord that aims to limit global temperature increases to 1.5°C above pre-industrial levels by 2050.
The U.S. hopes to install concrete, high ambition targets with the agreement to accelerate efforts to tackle the climate change. These include renewables, carbon removal, energy efficiency standards and cutting methane emissions.
IPEF signatories also pledged to strengthen and integrate supply chains, including by ensuring access to semiconductors, critical minerals and clean energy technology.
The new economic framework is supported by Australia, Brunei, India, Indonesia, Japan, Malaysia, New Zealand, the Philippines, Singapore, South Korea, Thailand and Vietnam, as well as the US.
The deal is still in its early stages and the countries will still need to negotiate for any future dealings. The framework is short of a full trade agreement such as the Trans-Pacific partnership (TPP) which was launched during the Obama administration. The IPEF lacks key issues such as tariff reductions and market access. The U.S. withdrew from the TPP during the Trump administration.
The regional nations have replaced the TPP with the Comprehensive and Progressive Agreement for the Transpacific Partnership (CPTPP) after the U.S. withdrawal.
Both the CPTPP, and the China-backed Regional Economic Comprehensive Partnership trade deal, include many of the same Asia-Pacific countries that have signed the IPEF.
Biden announced the IPEF during a five-day visit to Japan and South Korea. He is set to meet Indian Prime Minister Modi, Japanese Prime Minister Kishida and Australia’s newly elected Prime Minister Albanese. The four countries make up the Quadrilateral Security Dialogue or Quad group, which Washington sees as a democratic counterweight to China’s growing regional power.
China has already protested the latest US efforts as an attempt to upend the region’s peaceful development.
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