US Election-Year Climate Bluster
How much does it matter whether a sometime climate advocate like Joe Biden or a blustering climate skeptic like Donald Trump is in the White House? We hear all the time that the outcome will be crucial for the US energy transition and the global climate. Really?
Outgoing US climate envoy John Kerry recently termed the US move to renewables and EVs “irreversible.” I agree. Kerry added that where the upcoming US presidential election matters — a lot — is the speed of the transition. I’m not convinced.
Biden supports renewables when it’s convenient. But geopolitics, wars, and economic growth mostly turn out to be more important to his policy decisions. The US oil and gas industry has thrived during his presidency. Trump proved equally ineffectual in combating renewables and protecting the coal industry to which he swore such affection in his 2017–20 presidency. The US oil and gas industry stumbled and nearly fell while he was in office.
After three years of Biden, the US is lagging China, the EU, and much of the rest of the world in the energy transition, and this looks set to continue whichever one wins. More progressive voters are quite right in seeing the Biden-Trump rematch as a negative from many perspectives — and a potential disaster when it comes to the climate.
Biden’s Climate Claims
The US move to renewable power generation does indeed appear irreversible. Solar, wind, and battery storage now account for over 80% of additions to US generating capacity. Solar is the cheapest alternative by far for electric utilities looking to install new generating capacity. Even with substantial battery storage included, solar capacity costs about the same amount to build and operate as new natural gas-fired power plants.
EVs still cost more than the alternative, and they constitute only 9% of new US car sales. Nonetheless, they are clearly the transport of the future. The auto industry has opted for EVs as its path forward. That’s what makes it irreversible.
Biden and a Democratic Party-controlled Congress passed lots of climate legislation. The Inflation Reduction Act (IRA), especially, was hailed as a game changer for its 10-year-guaranteed upfront tax credits and rebates for buyers of all sorts of clean-energy equipment. This is paired with subsidies for companies that build clean-energy factories in the US. Backers term the package a break-through that should bring an almost immediate surge in solar, wind and battery-storage capacity and in EV sales.
The Flip Side
Hardly the sort of things Trump would support or implement. Or is it? As written in no-small part by conservative coal executive-turned-Democratic Senator Joe Manchin, more of the IRA was taken from Trump’s anti-Chinese, Made-in-America playbook than Democrats like to admit. And Joe Biden has not deviated from that approach.
Tough rules proposed by the Biden administration for determining what components in solar arrays, batteries, and EVs have to be made in the USA look set to heavily restrict how many clean-energy consumer products will qualify for those upfront rebates and tax breaks. On the EV side, fewer models have been cleared so far for full $7,500 rebates in 2024 than in 2023, and all of those are made by US-based companies. Not a single car made in the US by a Japanese, South Korean, or European company has qualified.
That’s what happens to friends. Americans can forget about ever getting a glimpse of the much-less-expensive Chinese EV models that are sweeping Europe.
Then there’s the question of how many solar panel and battery manufacturers will be able to find domestic US versions of everything from rare-Earth metals to polysilicon needed to qualify for subsidies to build new factories under Biden administration regulations. At this rate, it will take many years to get big-time US solar and battery manufacturing up and running even if Biden stays in office.
In the meantime, 2023 data stunningly demonstrates how far behind the US is falling in the energy transition while it prioritizes trade and industrial policy over climate action.
Most stunning is solar generating capacity: China built 217 gigawatts (GW) in new solar PV capacity last year, boosting its total by 55% to 609 GW. The US looks to have added just 33 GW — final data aren’t out yet — bringing its solar total to around 175 GW. China added more solar generating capacity last year alone than the US has in total, Bloomberg noted.
EVs accounted for roughly 9% of passenger vehicle sales in the US last year and are forecast to top 10% in 2024. In China, EVs’ market share was over 33% in 2023, and more than 40% heading into 2024. In Europe, EVs 2023 share was around 25%. Worldwide, EVs are forecast to account for 16% of all light-vehicle sales this year.
That’s the background from the first Biden term against which I’m questioning how much difference a Trump win would make. Trump has talked about repealing the IRA in his typically vague but emotionally charged way. To actually do so would probably require a new law, though, not merely a rewrite of the regulations.
That means Trump would have to have not just a Republican majority in both houses of Congress, but one willing to take away tax breaks that are widely popular in their own constituencies. Many of the IRA benefits, especially for wind and solar, have gone to Republican states. When it comes to subsidies for factory construction, it seems unlikely Trump would even try to interfere with subsidies in light of his strong support for rebuilding US manufacturing.
Back to Degrowth
Trump himself has also talked loud and long about somehow getting more oil and gas drilling in the US. How he might go about that is unclear. When it comes to oil, price is more important than politics as an influence on US production levels. Senior oil company executives are among those suggesting that Trump would be more effective than Biden in getting Saudi Arabia and its Gulf Arab neighbors in Opec to quit propping up oil prices by shutting in millions of barrels of production. Trump is also more inclined to push for a settlement in Ukraine, which could see Russian oil exports rise.
All that could undermine the shale oil boom the US industry has enjoyed in the Biden years, thanks to high oil prices.
On the natural gas side, much is being made by environmentalists of Biden’s decision this week to temporarily halt the near-automatic approvals for the sale of LNG to Europe and Asia. A Trump administration could be depended on to reinstate those near-automatic approvals for LNG capacity expansion. But again, it’s not clear how much difference it all makes. In an important sense, the recent Biden shift came too late: European or Chinese buyers have signaled that they don’t have much incremental appetite for long-term US LNG deals in any case. Their prime focus is on cheaper solar, wind, and battery backup.
It’s not that there’s nothing politicians can do that affects oil and gas demand. Trump could stop planned federal investment in expanded EV high-speed charging infrastructure. This is invariably listed as a major concern holding back rapid EV adoption in the US. He could also halt the tightening of federal vehicle mileage standards that have been an important factor behind the shift by car companies to EVs.
However, it’s late enough in the automotive industry transition process that this might not have much impact either. Biden has not yet gotten all that many charging stations built himself. And as to standards, more than half the cars in the country are sold in states that follow California’s auto mileage rules, which probably wouldn’t change whatever happens to federal standards. Trump would likely try again to end California’s right to set tougher-than-federal standards, as he tried to do in his first term and as George W. Bush did nearly a decade earlier. But neither managed to get their challenges through the maze of court action during a single term, and the same might well apply in a second Trump term.
In the end, the state of the US and other major economies is likely to matter more than energy policies in Washington to emission levels, the future of the US oil industry, and the fate of the global climate. GDP growth doesn’t mean that oil demand will keep on growing forever, but it will make turning around humanity’s enormous oil-tanker-like global economic system much slower and harder. Probably slower and harder than the Earth will give us time for. What we need isn’t a particular US election outcome. What we need is Degrowth, and we need it now.
