Biden’s IRA is the U.S. playing ‘catch-up’ after Trump, UK minister says

U.K. Finance Minister Jeremy Hunt said Friday that the U.S.’s Inflation Reduction Act was U.S. President Joe Biden’s attempt to play “catch-up” on clean energy investments after years of neglect by his predecessor, Donald Trump.

Hunt told CNBC that the U.S. had severely underinvested in the green transition under climate change skeptic Trump, and that it was only now implementing the sort of programs that are already in place in the U.K.

“We have to recognize that the United States is coming to this from behind,” told CNBC’s Tanvir Gill at the G-20 meeting in Bengaluru, India.

“They had a president previously who was very skeptical about anything to do with climate change, and so there is a bit of catch-up going on in the U.S.,” he said.

Trump was highly vocal in his denial of climate change during his time in office, frequently rejecting warnings from climate scientists and famously withdrawing the U.S. from the Paris Climate Agreement within his first months in the job.

Asked whether the U.K. was motivated to unveil new business incentives to compete with the U.S.’s $369 billion package of climate and energy provisions, the chancellor said that the U.K. would do things its “own way.”

“We will make sure that the U.K. continues to be a very attractive place for all clean energy investments, but we’ll do it in a different way, our own way,” he said.

In 2022, around 40% of the U.K.’s energy was generated by renewable power sources, up from 35% in 2021, according to a report by academics from Imperial College London for Drax Electric Insights.

“They don’t have things that we’ve had for many years, like carbon pricing,” Hunt said, referring to a mechanism that places a fee on organizations’ carbon emissions and offers incentives to produce less.

“We are very proud of the progress we have made, and we will continue to blaze a trail,” he added.

Hunt’s comments come as pressure mounts for Europe to improve its competitiveness in green technology industries.

European Commission President Ursula von der Leyen said Saturday that the European Union was working on a package of subsidies for European clean tech companies to “level planning field” with the U.S.

“For us, the task now is to match the subsidies of the United States also in the European Union, because we should not forget we all need the clean tech sector,” von der Leyen told CNBC at the Munich Security Conference.