March 31, 2020 (12:23)

Impact assessment of the upcoming US presidential election on global energy and climate policy

The outcome of the US presidential election in 2020 will determine not only the future energy policy of the United States, but will also have a significant impact on global energy, as well as on international policy in trade, climate protection and interstate relations.


Based on the analysis of the research of the Atlantic Council, an influential think tank, we can identify two plausible scenarios for the development of American energy and climate policy after the presidential election in November 2020. The main conclusion of experts is that a period of uncertainty regarding the future development strategy awaits American investors and owners of energy assets, and any of the election results will lead to significant changes in the domestic energy market and will affect the global competitive position of the United States.


First scenario.


In the event the incumbent President Trump is re-elected, the US energy self-isolation policy is expected to be strengthened through further support of fossil fuels, as well as intensification of fossil fuels mining by means of reducing the rights of federal states to regulate land allocation and permit new energy infrastructure. The requirements for environmental assessment and environmental impact may be eased and access of mining companies to federal lands, in particular, in protected areas may be expanded.


Thus, the planned amendments to the Endangered Species Act will give oil and gas companies access to the American part of the continental shelf. A series of changes to the legislation on clean water resources and clean energy will reduce the requirements for permissible methane emissions and environmental friendliness of transportation vehicles. Republican control of the Senate makes it possible to appoint loyalists to the highest positions in the federal bodies that control the energy sector (FERC) and deal with environmental issues, thus helping to implement Trump’s policy of providing the United States with its own energy resources along with ignoring environmental problems.


Such actions of Trump can cause an internal political crisis in the United States in relations between the federal and state authorities, as the latter do not want to lose control over the use of land and water resources, and some have already adopted ambitious climate plans. Trump may also face widespread opposition from the younger generation of Americans, who are increasingly concerned about climate issues. At the same time, US businesses may face international trade restrictions, especially in Europe, where the new EU authorities have declared ambitious goals for achieving climate neutrality by 2050 and have promised to protect local producers with special tariffs based on carbon emissions per unit of imported goods. In turn, Trump is able to initiate additional trade restrictions for European companies under the guise of protecting the domestic producer.


Second scenario.


If the Democratic candidate wins, an attempt to return to Obama’s energy and environmental laws is expected (National Environmental Policy, Clean Air and Clean Water Acts, etc.) with priority given to green energy development and stronger environmental requirements for infrastructure projects. 


Federal authorities will suspend support for transnational projects, including the Keystone Pipeline from Canada to the United States, as well as the issuance of permits for hydrocarbon production in protected areas and on the continental shelf. FERC will get at least two new Democratic commissioners and may even be renamed as the Federal Renewable Energy Commission.


One of the first steps of the new presidential administration, led by a candidate from the democratic forces, will be a ban on leasing state lands to the oil and gas industry, refusing to license protected areas and the continental shelf for such purposes, and returning to the 2015 Paris Climate Agreement.


At the same time, experts of the Atlantic Council are skeptical about the statements of some representatives of the Democratic Party regarding the ban on hydraulic fracking in the United States, given the strategic course of energy independence and intensification of the Middle East confrontation between Iran and pro-American states (Israel, Saudi Arabia).


California’s climate policy could form the basis of an updated Clean Energy 2.0 Plan, taking into account previous assessments of the US commitment to reduce greenhouse gas emissions by 2050 according to the Paris Climate Agreement. Democrats will also launch a broad-based campaign to reduce methane emissions, including tightening environmental requirements for existing and new wells. Significant efforts will also be made to decarbonise transport and agriculture sectors, as well as to develop technologies for carbon capture, binding and storage, artificial intelligence and autonomous transport systems.


Whatever the scenario for the election is, the new presidential administration will face the need to overcome the resistance of local authorities in individual federal states.


At the same time, Trump will be forced to fight environmental initiatives, and the Democratic president will be forced to solve the difficult task of gradually overcoming the dependence of some states on the oil and gas industry (Pennsylvania, Ohio and Colorado), preserving jobs and sources of their budgets.


The issue of nuclear generation, which today enjoys significant support from the Republicans, remains quite complex. Nuclear power may also remain important for the Democrats, given the importance of nuclear power plants for the economic stability of a number of federal states and the prospect of appearance of small modular reactors as a new, safer technology for the peaceful use of nuclear power. At the same time, Democrats will also make significant efforts to address the issue of safe disposal of nuclear waste.


Both Democrats and Republicans support further development of power transmission networks in the United States, increasing the reliability and flexibility of their operation, and building modern governance systems. Research and development of “green hydrogen” technologies for the needs of the transport sector are also in the sphere of common interests. Both political forces are ready to support further work of national laboratories on new energy-efficient technologies and ensure adequate funding from the state budget.


Thus, the US presidential election is an important element in shaping not only national but also global energy and climate policy, energy demand and the development of new technologies. The victory of a representative of any political force will mean a complex domestic political process and a struggle between federal and local authorities to influence the formation of local policy on the use of land and water resources, environmental norms and requirements.

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