The impact of President Trump on Energy and Climate policy

If delegates in Marrakech at COP22 were under a cloud yesterday, then waking up to the news of President Trump this morning will have been a bitter pill. Clearly, because Trump is a President-elect without previous political or public office experience, it’s impossible to say what he will do on climate and energy policy. Whatever he does, it will have major impact in the U.S. and the rest of the world. That said, the only thing to do is to look at the policy positions annunciated during the course of the campaign, none of which is particularly encouraging from an EU climate policy perspective. He  has called for abolishing the EPA, reversing of President Obama’s clean energy act, tearing up the Paris Agreement, and implying that Climate Change is a ‘hoax’ devised by China to hit the competitiveness of US manufacturing.

What do these positions mean for the US? As far the Paris Agreement goes, the legal options available to Trump are at best a grey area. However, working from the assumption that he both is able and intends to extricate the US from the agreement, the very real possibility now exits for a significant political blow to the evolving realm of climate diplomacy.  The political calculation of other major emitters, such as China and India, that signed on to Paris may now change (though both India and China have major problems with air quality which – certainly in the case of China – have been driving climate policy anyway).

On the reverse side, efforts to deal with climate change may now need to rely on the economic rather than political progress – the declining technology costs of wind and solar power, advances in storage technologies, and a lack of economic justification for pursuing coal mining and usage in power generation when shale gas is producing at a low cost and in large quantities; after all the reduction of emissions in the US has so far been driven by the availability of shale gas than by any particular regulatory agenda.

Likewise the financial sector has been integrating climate risk into its thinking in recent months to a much greater extent. The question is whether a damaged overarching political framework will change the calculation of financial actors?

From an EU perspective, further ambition on climate targets will be much harder in the context of likely weaker international action. Poland and her allies will argue that the EU’s competitors are reducing their commitments so why should the EU strengthen its own?

More specifically, there are big questions over the future of EU energy security. The US has been a consistent advocate of diversification of EU gas supplies since discussions over the development of Caspian gas started a decade ago, backing both the Nabucco pipeline proposal and the Trans-Adriatic Pipeline (TAP) that is now moving forwards. Will a shift in the US position on Russia impact such security focused energy infrastructure projects? Probably not given the advanced state of the Caspian and TAP projects. However it may have an impact on wider energy security issues, and certainly one of the stronger voices against Nordstream expansion looks likely to have left the field.

The impact on new energy technologies is worth considering, also. Trump has talked about reducing R&D funding for clean energy. US programmes such as ARPA-E (Advanced Research Projects Agency – Energy) have focused expertise and funding on the development of the kind of technologies that will be essential for a smooth and cost-effective transition. Without the US taking a lead on this, progress will almost certainly slow, making the task harder for everyone.

Finally, it seems one of the big winning areas for President Trump was the rust belt, and in particular coal mining communities. Given the rise of more populist parties in the EU, there is a question for EU environmental policymakers of how to ensure that climate policy doesn’t leave behind those communities as their core industries are transitioned away from, or the EU may see a similar response from EU electorates in the future.