The increase in electricity consumption across the globe since the beginning of the 18th century has caused a rise in the standard of living and triggered exponential wealth generation for human societies. Many modern luxuries including, but not limited to, air conditioning, food refrigeration, permanent indoor lighting, and all our electronic gadgets were made possible because of our success at harnessing the power of electricity. The world was a much different place when Benjamin Franklin flew his kite on a stormy day in 1752, and those changes have had a drastic effect on our planet’s climate. According to the National Oceanic and Atmospheric Administration, “Earth’s temperature has risen by an average of 0.14° Fahrenheit (0.08° Celsius) per decade since 1880, or about 2° F in total.” Additionally, “the rate of warming since 1981 is more than twice as fast: 0.32° F (0.18° C) per decade.” This warming is a direct result of a human-induced greenhouse effect, which is caused by the trapping of greenhouse gases in the atmosphere. Fossil fuels, which have been our preferred source of energy generation for decades, have accounted for over 75% of global greenhouse gas emissions and nearly 90% of all carbon dioxide emissions, according to the U.N. Without a societal transition away from fossil fuels for electricity generation, the runaway greenhouse effect will produce devastating climatic changes and severe weather events that will negatively affect the future generations of all life on Earth. To stave off this unwanted future, it has become imperative that our economies transition to utilizing renewable energy to power our twenty-first century way of living. The task of sufficiently transitioning away from the old sources of energy generation that our economies have depended on will require significant effort from all aspects of our society. Both governments and the private sector must work together if we are to achieve what is necessary—establishing a carbon-neutral world while maintaining global economic prosperity. This paper will analyze how the two largest federally organized central governments in the Western world, the United States and the European Union (“EU”), are enabling this critical transition through policy and law. The EU has focused on top-down mandates, while the United States has instead pursued a chaotic yet effective tax credit regime. Additionally, this paper will examine how both jurisdictions’ regulatory frameworks came to be in the politics of their respective legislative processes. Lastly, this paper will identify any successful policies that could be implemented in Arizona to further assist the state’s energy transition.

“Nearshoring,” as used here, is the relocation of production facilities currently located in China, owned by American, Chinese, and third-country firms, to North America and principally to Mexico, when low-cost labor and proximity to the U.S. market are important for many reasons. The objective of the phenomenon is to move the production of labor-intensive goods destined for the United States market to a location close to that market rather than thousands of miles away in China or elsewhere in Asia. But this phenomenon, which seems destined to continue for years or decades, is not a recent development. The need for American and foreign producers to access lower production costs for labor-intensive components and finished products is not new. It has occurred in one form or another (initially “offshoring” from the United States) for most of the past 60 years. Both the United States and third-country enterprises primarily serving the U.S. market have long chosen to use Mexico when needing a source of reliable, lower-cost, young labor. This historical review of Mexico’s use as a platform for the reception of foreign investment since 1965 to produce goods for the U.S. market, along with its ups and downs, may help potential investors, policymakers, and stakeholders to understand better the current mini-boom and perhaps the future of Mexican nearshoring as well.