A summary of the ‘President Trump’s Energy Policy’ episode from The Energy Gang podcast.
In December 2015 a global commitment to fighting climate change was agreed in Paris. The US is only one of the 193 countries that form the Paris Agreement. However, under the Obama administration the United States has been a leader in progress towards the agreement and represents 18% of global greenhouse gas emissions. As of February 2017, Trump will become the President of the United States, and the only leader in the world that thinks that human beings are not warming the climate.
The following is a summary of the discussion by Steven Lacey, Catharine Hamilton and Shale Con during the Energy Gang podcast episode, ‘President Trump’s Energy Policy’.
The Bad News
Obama’s climate policy can relatively easily, and probably will, be repealed or cancelled by a Trump/Republican administration.
- In the US, presidents can use executive authority to put laws into place without requiring approval from the house or senate. However, laws passed by executive actions rank lower than those passed by the senate and can be easily repealed by a new president using the same executive authority. Barack Obama used executive orders to put the majority of policies designed to reduce greenhouse gas emissions into place, including the Clean Power Plan (carbon regulations for states) and the US signing the Paris Agreement.
- It would take the United States 3 years to withdraw from the Paris Agreement. However, if the new republican administration wishes to, it could withdraw from entirely from the United Nations Framework Convention on Climate Change in 1 year. Furthermore, the agreement is non-binding, so even if the administration does not want to expend the political capital to completely withdraw, Trump can just do nothing to meet the US’s emission reduction targets.
- The Clean Power Plan, Obama’s flagship policy for reducing emissions and enforced by the Environmental Protection (EPA), can be easily killed. Backed by the Obama administration, the plan is currently going through the court to determine whether the EPA should be given the power to enforce it, or not. The quickest way to kill the Clean Power Plan would be for Trump to simply contact the court and notify them that the administration will no longer pursue the proceeding. What’s more, Trump can appoint a solicitor general, the attorney for federal government, and it is in his/her power to decide to not support the EPA. Even if it gets to the supreme court, Trump can appoint a supreme court justice. Another option is to simply direct the EPA’s staff to not work on the Clean Power Plan.
- Trump has appointed a climate change skeptic, Myron Ebell, as the Head of the Environmental Protection Agency’s transition team meaning that even if the EPA has the power to enforce the plan, they probably won’t.
- The whole package of Obama’s climate policy named the ‘Climate Action Plan’, developed in 2013, which brought together new and existing regulations into a package to show to the international community that the US is committed to climate action, is at risk. This includes decade old regulations on reducing the emissions from cars and light trucks (the ‘CAFE’ regulations) to newer regulations such as the Clean Power Plan itself. Many of these were executive orders. The package also includes plans designed to curb the emissions of methane, a greenhouse gas 25 times more powerful than C02. Trump and the republicans have said specifically that they wants to get rid of regulations curbing methane emissions.
The Good News
Market forces already underway and the growth and job opportunities of clean energy could counterbalance the repeal of regulation.
- Clean energy represents a huge wealth and job creation opportunity. Trump’s win has been attributed to a large group of people in the US who feel they have been left behind, worse off from globalisation and are hoping for new industry and jobs to be introduced by Trump. There are opportunities for the clean energy industry to approach states and make it clear where possibilities lie to create new jobs and growth. Solar already accounts for 210,000 jobs, wind accounts for 80,000 jobs and ‘Wind Technician’ is the fastest growing job category in the US. The ‘advanced energy economy’ is worth $200 billion in the US alone, which is more than pharmaceuticals and almost as much as consumer electronics.
- The economics of renewable energy vs. fossil fuels is increasingly in favour of renewables anyway. For example, large scale solar projects can be built for less than $0.50/W in the US and this number is falling. Solar is on track to be the cheap choice for new energy regardless of regulation. More than half of new solar capacity that will come online next year will have been built without the support of regulation.
- It is likely that investment in clean energy technologies at the state level will occur anyway. States have already started deploying clean technologies, such as wind and solar, and understand that even if the Clean Power Plan is rolled back these technologies still form the future of energy in the US.
- US Industry has begun shifting towards low carbon and may continue to move forward. Companies have already made investments to change their practices and their business models. For example, car companies are likely to continue to invest in electric vehicles and cleaner combustion engines because these are already a good business case, not because of regulation.
- Trump is pro-infrastructure. This includes a desire to improve the electricity grid and work towards a smarter grid, with increased storage capacity and increased capacity to cater for renewable energy.
- The level to which coal-fired power stations can actually be revived in the US is debatable. Also, Trump’s energy policy is to support the natural gas industry. Natural gas is in direct competition with coal. A focus on de-regulation could also help the nuclear industry. If Trump’s policies end up increasing the use of natural gas and nuclear, they may lead to levels of emission not far from the Paris Agreement targets.
- States may take positive action without requiring federal direction. Even if the Environmental Protection Agency will no longer be able to force states to abide by the Clean Power Plan, states will still be able to uphold it by choice. It is likely that at least some states, who’s governors agree with the plan, will come up with a similar plan and legislate it.
- Global leaders, including China, are already warning Trump not to back out of the US’s commitments to mitigating climate change. It could be argued that Trump will be a malleable president – he has shifted position on many issues on many occasions and has no experience of politics – and could be influenced to change his stance. There is no certainty that other countries will back down on their commitments made at Paris in the event of US withdrawal. A solution may be found to continue global efforts to mitigate climate change for four years without the US.
- Internationally, the US could still show leadership on climate change through civil society means such as the actions and commitments of it’s companies and NGO’s.
In summary, many of Obama’s policies intended to reduce emissions such as the Clean Power Plan and the ratification of the Paris Agreement are relatively easy for Trump and his party to cancel or repeal. Trump has already appointed a climate skeptic as the head of the transition team for the Environmental Protection Agency, signalling that he is planning on repealing the progress made by the Obama administration.
However, market forces, including committed investment from businesses, continuously improving economics of clean energy and the wealth and job creation potential of the clean energy industry will work in the opposite direction to the repeal of regulation by the new administration. Another positive factor is that although Trump plans to do nothing actively to reduce emissions, his energy policy may well inadvertently lead to the US meeting it’s emission reduction targets anyway as a result of natural gas being cheaper and cleaner than coal.
The key question is how the international community will react to the United States’ withdrawal from it’s commitments in Paris. This will dictate the future of the agreement and our chances of avoiding catastrophic warming of over 2°C.