The economic policies of President Biden, known as “Bidenomics,” are not resonating with American voters, but are gaining popularity globally.

The extensive climate legislation at the core of President Joe Biden’s economic agenda has sparked a renewed enthusiasm among global leaders for the type of government intervention and financial support that has fallen out of favor in many nations over the past four decades.Inflation Reduction Act

The combination of generous backing for clean energy advancements and measures to exclude foreign rivals is also encouraging a sense of environmental nationalism. Some politicians on the conservative side, particularly outside of the United States, see this as a climate message they can use to their advantage.

Marc-André Blanchard, a former diplomat and current executive at Canada’s largest pension fund, expressed to POLITICO at the COP28 U.N. climate talks in Dubai that the legislation is likely the most remarkable one he has seen in his lifetime.

That may provide little political comfort to Biden, as multiple polls show him losing the economic messaging war to former President Donald Trump, his most likely opponent in next year’s presidential election. Trump has promised to rip out the climate law root and branch.

According to surveys, many US citizens are not familiar with the IRA even though Biden has made it a key part of his campaign for reelection since signing it a year ago.

However, Biden’s legislation has sparked a reaction at the climate conference in Dubai, eliciting either motivation or sensitivity. For the first time, trade policies are explicitly included in the official diplomatic draft of the summit, highlighting the increasing significance and inevitability of governments discussing measures to support their own clean energy industries.

“Bidenomics” is a term that the president’s supporters have embraced as a shorthand to describe his economic record, which includes his promotion of clean energy as a tool to reestablish American manufacturing and create jobs.

After originally billing the law as offering $369 billion in climate and clean energy goodies, the White House is now proudly proclaiming it will spur closer to $700 billion — or even $1 trillion — in green incentives over 10 years. Republicans and other conservatives have grumbled about those ramped-up estimates, saying they point to an out-of-control program that’s worsening inflation. But as the White House sees it, the jump means the tax credits for priorities such as homegrown clean power and electric vehicles have proven more popular than initially anticipated.

Shalanda Young, Director of the White House Office of Management and Budget, stated in a press conference in Dubai on Dec. 4 that she sees our progress as exceeding expectations, which will lead us to achieve our climate objectives at a quicker pace. This is a positive development.

The current results are having a tangible effect as investors transfer their funds to the United States from other countries, eager to benefit from tax incentives. In July, for instance, Swiss solar company Meyer Burger scrapped plans to construct a factory in Germany and opted for Arizona instead. This has presented political leaders worldwide with a decision: either criticize and complain about the US’s sudden support for clean industry or emulate it. Many are doing both.

The more discontented strategy involves advocating for representation at COP28. The stipulations in the IRA that designate subsidies exclusively for American-made products have sparked a collaboration among influential developing countries, headed by Brazil and including China, to urge the climate conference to denounce “discriminatory” laws.

At a press conference on Saturday, Chinese climate envoy Xie Zhenhua expressed frustration over the unequal treatment of clean and low-carbon technologies and products from various countries.

The recent shift away from decades of free trade has even caused concern among the United States’ closest allies. However, countries such as the U.K., European Union, and Australia are now developing their own versions of the IRA.

This year was the hottest in recorded history, yet is also likely to be one of the coolest any living human will experience for the rest of their lives. For some leaders, the IRA and its kin reflect the urgency of the problem, by aiming to transform the economy at a pace the market can’t deliver on its own.

According to Todd Tucker, the director of industrial policy and trade at the Roosevelt Institute, the failure of firms to decarbonize has led us into a climate crisis. He believes that this crisis is the largest market failure in history and will require significant public investment to address.

The Conservative government led by Prime Minister Rishi Sunak in the U.K. has intentionally tried to distance itself from Biden’s approach, which they view as a protectionist distortion of global free trade.

However, for the opposing Labour party, “Bidenomics” has become a significant political guiding principle, as polls indicate they will remove Sunak in the upcoming election next year.

Rachel Reeves, the treasury spokesperson for the party, refers to “securonomics,” but the underlying elements are consistent: increased government involvement, incentivizing private investment, and a focus on promoting domestic supply chains. Additionally, there is a push to frame the shift towards green energy as a patriotic endeavor that can generate employment opportunities in former industrial areas that have shifted away from supporting Labour in recent elections.

The Labour Party is closely connected to influential figures within the IRA. According to a Labour representative, the party’s energy representative, Ed Miliband, frequently communicates with Heather Boushey, an economic advisor at the White House. During his time in Dubai for COP28, Miliband also held discussions with Dave Turk, deputy energy secretary under Biden.

The IRA offers a solution to a dilemma that Labour has been struggling with – how to convince voters, who are facing high electricity prices and a persistent cost-of-living crisis, to support a swift shift towards renewable energy. According to focus groups conducted by the party, policies that are partially influenced by Biden’s strategy, such as the creation of a government-owned energy company called Great British Energy that will prioritize domestic investments, are well-received by the target audience.

According to a Labour representative, who spoke on the condition of anonymity since they were not given permission to speak publicly, the Bidenomics strategy has aided in presenting a case for economic reform to the individuals who supported Brexit.

However, even among members of Biden’s party, the widespread admiration for the Individual Retirement Account (IRA) overlooks certain aspects.

The Biden administration is not solely depending on incentives. It is also increasing regulations on industries that contribute to pollution, such as the automotive and power sectors. This has caused disappointment among the same companies that stand to gain from the IRA.

Furthermore, the longstanding opposition of Republicans towards investing in clean energy creates challenges in ensuring consistent funding. For years, GOP politicians have also opposed attempts by Democrats to eliminate tax breaks for oil and gas corporations, resulting in artificially low prices for fossil fuels.

“The question of why the U.S. has not implemented Norway’s practice of disclosing the actual cost of gasoline is the other side of the IRA debate. After all, as a country that values free markets, it is worth considering.”Sean Casten (D-Ill.).

Financing through the federal tax code has become a complex task, leading to increased bureaucracy. As a result, some benefits have faced difficulties in reaching the public, and recent tax regulations for electric cars have restricted the availability of federal incentives to a limited number of models.

I believe they are uncertain about the reasoning behind our approach.
Scott Peters (D-Calif.) said of the Europeans. “And also it has trade implications that are going to be the next thing that we have to deal with.”

Matt Kean, the previous treasurer of New South Wales, stated that the IRA has caused significant disruption in Australia.

“The IRA has caused investors to abandon the rest of the world and turn to the United States. This has challenged other countries to intensify their efforts in the competition for global capital,” stated the speaker.

Kean, a member of the center-right party, is a Liberal who was removed from the federal government last year. This was a result of voters punishing the party for obstructing climate policy for more than ten years. However, Kean believes that implementing an IRA-like policy could help conservative Australia overcome their reluctance to address the climate crisis.

He stated that the focus is primarily on nationalism, which attracts those who were previously doubtful of the green movement or the shift towards a low-carbon economy. This is especially prevalent in Australia, where the fear of China greatly influences our mentality.

According to Kean, the challenge is that Australia lacks the same financial resources as the U.S. Therefore, it will need to focus on investing in technologies that utilize its natural resources, such as vast land areas, wind, and solar power.

The recently elected Labor government has allocated $1.3 billion towards green hydrogen initiatives and $660 million towards transitioning the economy away from fossil fuels and towards electricity. However, according to Richie Merzian, the international director of the Smart Energy Council, these efforts do not align with the magnitude and timing of similar efforts in the United States and European Union.

According to Sharan Burrow, former general secretary of the International Trade Union Confederation, the IRA is leading the way in development and others are eager to follow suit. The main difficulty lies in securing funding for smaller nations, as the U.S. serves as a major attraction. However, this obstacle is not impossible to overcome.

The IRA poses a significant obstacle for the EU. As a union of 27 countries, the EU faces political divisions and significantly higher energy costs compared to the U.S. This has caused concern among investors in the manufacturing industry.

The European Union has restricted authority to collect and allocate funds from taxpayers, and decisions regarding industrial policy are largely influenced by individual member states. The EU has consistently struggled with the challenge of punishing state subsidies, as there is concern that larger economies like France and Germany would overpower smaller ones.

However, with the passing of the IRA in the previous year, the European Commission has relaxed its strict regulations on state aid and is quickly working towards its own Net Zero Industry Act, which sets a goal for 40% of the European Union’s clean technology demand to be met by domestically manufactured products by 2030. In September, President Emmanuel Macron declared that France would construct one million heat pumps by 2027, despite starting from a relatively small amount.

In 2026, the EU plans to implement a border tariff on products with high carbon content. This measure aims to retain its heavy industries, despite facing higher costs for emitting pollutants through the EU Emissions Trading System.

According to Scott Paul, president of the Alliance for American Manufacturing, instead of creating division in the transatlantic alliance, I would describe it as a mutual respect between both sides as we have finally organized ourselves. It almost felt like a positive competition that will ultimately benefit both parties.

Although this type of industrial strategy may be currently trendy in Western countries, China has been providing financial support for clean technology for many years. Additionally, other developing economies have also been ahead of the trend. India’s Prime Minister Narendra Modi has aimed to establish a solar industry to rival China’s.

Jake Levine, the chief climate officer of the U.S. International Development Finance Corp, stated that the current situation is not a coincidence. The country has implemented incentives for production in order to establish a local industrial foundation to meet the demand.

As a labor advocate, Burrow has long opposed advocates of free trade. However, she believes that the implementation of the IRA and focus on climate issues signals a new era. “Industrial policy is making a comeback,” she stated.