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The stories that matter on money and politics in the race for the White House
Last week, one of Wall Street’s top commodities analysts was asked how he thought the outcome of the US election might affect the energy sector. “I’m just going to point out this,” the Carlyle private equity group’s Jeff Currie told an FT energy conference in London. “Under the Trump administration, the world got a lot greener and under the Biden administration it got a lot browner.”
By this, Currie meant that global events and other dynamics can shape energy markets more than any White House occupant. This is true, up to a point. Greenhouse gases plunged in 2020, when Trump was in office and Covid lockdowns battered the global economy. But emissions roared back after Biden took office in 2021 and economies began to rebound.
Likewise, more onshore wind farm power was added during Trump’s term than under Biden up until August this year, in part because renewables developers were among those hit by Biden-era interest rate jumps. US oil production also continued to soar to fresh highs under Biden, as an ever more efficient drilling industry pumped more crude from new wells.
Still, it is impossible to downplay the importance of next Tuesday’s US presidential election. The outcome will reverberate well beyond the shores of the US, not least when it comes to climate change. One candidate, Kamala Harris, wants to hasten the energy transition away from fossil fuels while the other, Donald Trump, wants to slow or stop it.
Consider Trump’s vow to gut what he calls Biden’s “mammoth socialist” Inflation Reduction Act. This sweeping 2022 climate legislation is already funnelling billions of dollars in tax credits towards electric cars, solar panels, batteries and other technologies central to a speedy transition — as well as carbon capture and hydrogen that oil and gas companies support.
Beyond the US, it has spurred the EU, India and other economies to launch programmes to build up their own clean energy sectors, and stop climate-friendly businesses heading to the US.
A global green energy race is very much needed at a time when greenhouse gas emissions are reaching new highs. The race could falter under Trump, who has also vowed to rip up a slew of other Biden energy measures such as a pause on approving new liquefied natural gas export terminals and transport decarbonisation. His vice-presidential running mate, JD Vance, has pushed to replace the Inflation Reduction Act’s electric vehicle tax credits with $7,500 “America First” credits for US-made gasoline and diesel cars.
Trump could also take tougher steps to stymie global decarbonisation efforts than he managed the first time around. His campaign has told reporters he would again pull the US out of the Paris climate agreement, as he eventually did in November 2020. Biden swiftly reversed that move on taking office in 2021.
However, the 900-plus-page Project 2025 policy blueprint that Trump loyalists have drawn up contains a plan that some legal experts think could make it far harder for another Democratic president to overturn a second Trump pullout. The document says the next conservative administration should withdraw from both the 2015 Paris agreement and its 1992 parent treaty, the UN Framework Convention on Climate Change. Some experts think a future Democratic president would need Senate approval to rejoin the convention, which could be difficult to attain.
When I asked a number of legal scholars what they thought, some said the Senate may not need to approve the re-entry of a treaty it had already okayed. But others said rejoining could require a two-thirds majority vote.
Either way, the prospect of another four years of a Trump White House is unnerving climate policy advocates across the world, who fear it will embolden other leaders to take their feet off the energy transition pedal.
Those fears will be on display just days after Tuesday’s election in Azerbaijan’s capital of Baku, where this year’s annual UN climate COP conference begins on November 11. Envoys are due to negotiate a raft of measures, including a new global climate finance goal, and build on past commitments to shift away from fossil fuels.
Securing agreement for such efforts among nearly 200 countries is hard enough at the best of times. The threat of the world’s biggest historic emitter and richest nation standing on the sidelines for years to come would cast a pall over Baku. But the effect of a Trump victory on the global energy transition could be felt for decades.
pilita.clark@ft.com