Balancing USA and European Perspectives on Climate Change

The direction of climate change in the USA and Europe offer at times similarities, but also differences and divergent paths.  This blog aims to provide a perspective on the key areas impacting climate change within the USA and Europe. 

Summary 

In the United States, climate policy continues to be shaped by a shift to traditional energy resource extraction and reassessment of climate commitments and reductions in federal investment.  Whilst, at many state and corporate levels commitments to net zero targets and carbon neutrality by 2050 remains.   

In contrast, European governments continue to support climate investments and are now reassessing their net-zero commitments and targets for 2050 for accuracy. Although, there are regional differences between Western and Central/Eastern Europe, climate action enjoys broad support allowing for more unified policy making at the EU level. 

Climate Legislation and Policy Direction  

The European Union has adopted ambitious climate legislation aimed at accelerating the green transition. A new target aims at 90% reduction in greenhouse gas emissions by 2040, supported by flagship policies such as Clean Industrial Deal and the Fit for 55 packages. These efforts focus on accelerating decarbonization, enhancing energy security, and strengthening industrial competitiveness.  

However, despite these efforts, the Climate Action Tracker and Climate Change Performance Index have rated the EU's current policies as "highly insufficient" for meeting its fair share of the 1.5°C goal under the Paris Agreement. Concerns remain about fossil gas lock-in through new supply agreements with countries like the U.S., Azerbaijan, and Algeria. 

In the U.S., the Inflation Reduction Act (IRA) remains a central pillar of clean energy policy, continuing to drive private investment in renewables and low-carbon technologies. While there has been a shift in emphasis at federal level toward energy reliability and infrastructure resilience, the focus includes a diverse mix of energy sources including coal, gas, and nuclear power with a preference for baseload energy to support AI and industrial growth.  

The U.S. is currently off track to meet its 2030 emissions reduction target, and the Climate Action Tracker rates its climate policies as "Insufficient" for aligning with the 1.5°C target. The organizations are also pivoting towards analysing value chain intelligence, assessing material origination, evaluating tariff structures and aligning sustainability strategies with broader economic priorities. 

Implementation and Sub-national Action 

In the U.S., sub-national actors—such as states, cities, and private companies—continue to play a major role in advancing climate initiatives. Regions like California and the Northeast continue to implement progressive climate policies, and corporate investment in clean energy remains robust due to the IRA’s long-term incentives. 

In Europe, implementation varies by country, with Western European nations generally more aligned with EU climate goals than Central and Eastern European states.

Nevertheless, the EU maintains a strong policy framework and enforcement mechanism such as CBAM (Carbon Border Adjustment Mechanism) and the phased introduction of Digital Product Passports that ensures a uniform approach across member states. 

Potential for Transatlantic Cooperation 

Despite the divergence in policy approaches, there is a significant potential for transatlantic collaboration. Areas such as geothermal energy, geologic hydrogen, and sustainable lithium extraction represent shared strategic interests. Europe seeks to enhance energy security, while the U.S. aims to transition its fossil fuel industry toward cleaner alternatives. These overlapping goals open the door for joint investment, innovation, and climate-aligned industrial transformation that could bridge political and economic interests on both sides of the Atlantic. 

A summary of the key areas and differences 

Aspect	Europe	United States
Federal / Government	Broad support across mainstream parties; regional variations	Move towards fossil fuels and selected investments in renewables
Legislative Framework	EU-wide, binding targets; Fit for 55, 90% emissions cut by 2040	IRA remains key driver; federal policies reflect a diversified energy fix – with fossil and renewables.
Climate Targets	Ambitious goals and integrated policy efforts	Progress through IRA-supported investment and energy diversification
Policy Direction	Green transition as economic and strategic priority	Emphasis on national material and energy security, infrastructure, and balanced energy portfolio.
Sub-national Role	More consistent due to EU coordination	Focused and targeted by state and corporate actions to advancing clean energy.
Future Outlook	Push for more aggressive emissions cuts and fossil fuel phaseout	Strong potential for innovation, technology-driven climate solutions, but with fossil fuels continuing to play a significant role in the future.

Both regions continue to see climate action driven by technological innovation and industrial strategy, offering a path forward even amid divergent federal policies. 

What does this mean for multi-national business? 

Businesses operating in both the USA and Europe are faced with differing legislative obligations in terms of operating practice and reporting. While the U.S. emphasizes flexibility, economic justification and innovation-driven solutions, the EU places greater emphasis on structured compliance.   

Value of the Sustain360°™ platform 

Enterprises with operations and customers in both regions need a unified climate intelligence platform that allows for reporting, management and reduction analysis to meet their net-zero targets. Sustain360°™ is unique in allowing enterprises to bridge regulatory differences and mandates, delivering a consolidated view across the value chain by emissions and cost, and delivering a holistic approach to meet global net-zero goals whilst boosting financial performance. 

www.sustain360.ai