IT is one year since the passage of the US Inflation Reduction Act (IRA), a landmark climate change bill with between $371 billion (government estimate) and $1.2 trillion (Goldman Sachs estimate) in spending commitments over 10 years, which will trigger as much as $11tn in private investment in the years ahead, according to the investment bank.
The IRA is dramatically altering the literal and figurative landscape of America’s economy. But it is not just the massive scale of the policy package that matters but also the positioning and stance.
What do I mean? President Joe Biden is embedding and linking climate change policies directly to national security policies and goals.
This epochal shift was laid out by the national security adviser Jake Sullivan (below) in April this year. The green transition, industrial policy levers, and national security goals are at the centre of policy discussions.
This package – “Bidenomics” – is helping America outperform other advanced economies, delivering growth, employment, wage rises, improving consumer confidence, and new, greener, pathways to current and future economic growth.
Biden and his team are clear – US green transition policies are pivotal to achieving competitive advantage, for instance with China, and essential to national security goals, for example, in achieving energy policy targets and vis-a-vis Russia.
This approach is visible in every department and across all agencies. Biden is refocusing the government, aligning its power and policies with net-zero goals. US businesses and investors understand this and are adjusting their own plans and investments accordingly.
Contrast this with the UK, where the reverse is true, with Prime Minister Rishi Sunak backtracking from green goals, policies, spending commitments and their implementation. At a time when UK competitors are aligning policies and ensuring future economic and national security, the Prime Minister is doing the reverse.
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On renewables and power generation, the UK Government is walking back to the polluting future. The Government agreed to a new deep coal mine and announced additional exploration and drilling in the North Sea. This looks very much like a walking back of commitments on renewables.
It is the reverse of alignment of green industrial policies with the national security needs of the UK and a lack of a long-term view and perspective. A smart prime minister would understand that more renewables means less price volatility and greater energy security, not less.
On agriculture, post-Brexit plans are still a mess. The Sustainable Farming Scheme is not yet operating, leaving farmers unclear about what to plant for next year and what if any payments they will receive.
Indeed, financial support to UK farmers has already slumped, making matters worse after a poor growing season, labour shortages, empty grocery shop shelves, and rising costs and consumer prices.
A smart prime minister would understand that agriculture policy must be both greening and a security policy essential, for what is more important than safe and sustainably produced food supplies?
The destructive shortsightedness of the Prime Minister’s (above) approach has been lamented by the UK Climate Change Commission, which reports the UK is missing legally required targets across the board.
As a result of this refusal to place green net-zero goals at the heart of the policy architecture and paradigm, the UK risks losing its lead in the greening of globalisation and its industrial response.
What Britain does today and tomorrow will create its climate future for generations to come. This backsliding is a betrayal of responsibility and is especially shocking, in a year when climate tipping points loom large and heat and weather records have been broken time and time again.
This abandonment of green goals shows the Conservative government is out of touch, out of ideas. It should be voted out of government. Voters need to look at the policies offered by other political parties and ask: “Will they align climate policy with our economic and national security?”
Opposition party leaders may not be exciting, surprising or amusing. Yet surely, after a long series of clowns, fools, and failures, it is past time for a focus on competence, effective policies, and careful investment plans.
Stuart PM Mackintosh is executive director of the international financial think tank Group of Thirty and author of Climate Crisis Economics
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