The head of the International Energy Agency (IEA) said on Tuesday that new legislation by the United States aimed at combating domestic inflation was the most important climate agreement since the Paris Accord.

IEA executive director Fatih Birol, speaking at a panel on energy security at the World Economic Forum, said the Inflation Reduction Act would drive investment into cleaner energy.

He said energy security was now the biggest driver of climate investment.

Vicki Hollub, chief executive officer of U.S. oil producer Occidental Petroleum Corp, called the act one of the most transformative bills ever signed.

Subsidies are very important for the development of new technologies, she told the event.

U.S. President Joe Biden signed the $430 billion bill into law last year.

While European countries have welcomed the new commitment to energy transition, some have said they fear it may disadvantage their companies. (Editing by Leela de Kretser and Andrew Heavens)