An $80-billion windfall is in store for the United States’ international trading partners and competitors if Donald Trump follows through on his plans to roll back major portions of the Biden administration’s clean energy investment program, a new analysis concludes.
“The U.S. election results—a likely trifecta with a Trump administration, a Republican-held Senate, and a Republican-held House—point towards increased trade protectionism, removal of environmental regulations, and fossil fuel handouts,” writes Johns Hopkins University’s Net Zero Industrial Policy Lab, in a summary of the 13-page brief. But repeal of the climate portions of three of President Joe Biden’s signature legislative initiatives—the CHIPS Act, the Bipartisan Infrastructure Law, and the Inflation Reduction Act (IRA)—”would harm the United States and create tens of billions of dollars in opportunities for other countries.”
That’s because, “with or without the U.S., the global energy transition now has incredible momentum,” the summary states. “A Trump presidency would not change these fundamental facts. Without U.S. leadership, the most likely outcome is that the energy transition continues its bumpy but inevitable trajectory. However, in such a scenario, the U.S. would cede clean energy technology manufacturing to other countries.”
“Our scenario analysis shows that U.S. repeal of the IRA would, in the most likely scenario, harm U.S. manufacturing and trade and create up to US$80 billion in investment opportunities for other countries, including major U.S. competitors like China,” the policy lab writes. “U.S. harm would come in the form of lost factories, lost jobs, lost tax revenue, and up to $50 billion in lost exports.”
And meanwhile, “China will be happy to wave in the rearview mirror of one of its world-leading EVs, as U.S. manufacturers hobble on.”
European Climate Foundation CEO Laurence Tubiana, one of the architects of the 2015 climate agreement, agreed that the global energy transition will endure, with or without the United States or Donald Trump. “The U.S. election result is a setback for global climate action, but the Paris Agreement has proven resilient and is stronger than any single country’s policies,” she said last week. “There is powerful economic momentum behind the global transition, which the U.S. has led and gained from, but now risks forfeiting.”
Tubiana pointed to the opportunity for Europe to fill the vacuum, and the Times of London said the UK in particular could be in a good position to step up. David Waskow, director of the World Resources Institute’s International Climate Initiative, saw a different beneficiary. “It would put China even more at the centre,” he said, adding that the Trump administration’s withdrawal from the energy transition would mean “leaving other countries space to do more.”
Political Wargaming
In the days leading up to last week’s vote, Bloomberg News reported that climate diplomats were already in secret talks on how to “keep global cooperation alive” and bypass the U.S. in the event of a Trump win. “A series of conversations, crisis simulations, and political wargaming have spanned the globe,” the news agency wrote.
“Some climate negotiators have even conducted simulations to prepare for a potential Trump return and to game out strategies for how that would affect talks at the COP29 conference,” which opened yesterday in Baku, Azerbaijan. “Activists ran through a crisis communications simulation [in late October] to ensure they were prepared for what an online notice called ‘the possible looming reality of a Trump election win and its impact on the COP29 climate talks’.”
But one veteran COP observer sees an essential difference between 2016 and 2024. And it doesn’t play in favour of a united response to the climate emergency—or to Trump.
“The last time Donald Trump entered the White House and menaced efforts to stop the climate from overheating, affronted world leaders closed ranks against him,” writes Politico Europe correspondent Karl Mathiesen. “Such defiance and unity are practically unthinkable this time. Trump’s peers are disunited, focused inward, and have already largely abandoned the vanguard of the fight to stop the planet from burning up,” distracted by wars, trade disputes, and a “pile-up” of other global and domestic challenges.
“The European powerhouses that eagerly claimed the climate mantle after Trump’s 2016 election are now fumbling through a house of mirrors as they confront economic decline, populism, and what French President Emmanuel Macron warns could be the failure of the EU project. Many of these problems, by the way, will likely become even more daunting during a Trump presidency.”
“Is there any leader that sees climate as a key driver of contemporary politics and society?” asked Luca Bergamaschi, founder of Italy’s Ecco climate think tank. “Probably not.”
With France, Germany, and the European Union all distracted in one way or another, Mathieson cites promising momentum from Brazil and the United Kingdom, with the pace of the energy transition in China providing “the largest reason for optimism”. He also points to the “more optimistic view” from climate diplomats, Biden administration officials, and environmentalists that governments are still helpful to the energy transition, but no longer essential.
“No matter what Trump says, no matter what, the shift to clean energy is unstoppable in the United States,” former Biden climate advisor Gina McCarthy told media last Thursday.
“More of the action on climate change has shifted into the economic marketplace,” said Robert Orr, an adviser on climate change to UN Secretary-General António Guterres and dean of the University of Maryland School of Public Policy. “Political leadership decisions in the United States or elsewhere may not have quite the same import they would have [had] even 10 or 15 years ago.”
