Fracking hell: What Trump’s second presidency means for green initiatives

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Fracking hell: What Trump’s second presidency means for green initiatives

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After a whirlwind election that saw the US map run red earlier this month, Donald Trump has been elected as the 47th US president.

With a Republican majority in the Senate and House of Representatives, it is expected that sustainable ambitions and green initiatives will be taking a backseat (to say it lightly) for the next four years.

While Democrats have advocated for net zero ambitions and environmental laws such as Biden’s Inflation Reduction Act (IRA) and has supported global climate initiatives, Republicans have been heavy supporters of anti-ESG regulation and repeatedly perpetuate climate denialism.

During Trump’s first presidency, his administration recalled over 100 environmental laws laid out by President Obama and his predecessors, which included removing protections from the USA’s wetlands and wildlife, rolling back limitations on carbon emissions from power plants and motor vehicles, formally withdrew from the Paris Climate Agreement. Under Biden, several of these environmental protections were reinstated, including US participation in the Paris Agreement, but the probability of the new administration pulling back environmental protections is high.

There also rumours that Trump could also pull out of UNFCCC (United Nations Framework Convention on Climate Change). After China, the USA is the second biggest greenhouse gas emitter. Therefore, the US’s clear lack of engagement in global climate talks is concerning, and does not lead a good example to other countries.

Sridhar Deivasigamani, co-founder and CEO of INtellihot, a cleantech company, told Finextra: "Under a Republican-controlled government, it is possible that environmental regulations are loosened, and broader climate change initiatives take a back seat. However, some companies still deliver on customer economics and are not dependent on any incentives. They also deliver on climate priorities by cutting my greenhouse gases by 40%. Regulations like the 2026 DoE’s Minimum Efficiency Standards mandate for commercial water heaters will drive innovative technologies that consume less energy."

Climate regulation

Biden’s 2022 IRA boosted clean energy investment, extended clean energy investment tax credit, and encouraged the national move towards renewables. However, under new leadership this law is in danger.

However, there are efforts from state representatives for clean energy legislation in supporting the IRA and instating the Bipartisan Infrastructure Law, which saw massive moves towards clean energy in rebuilding national infrastructure.

Despite these moves towards a sustainable future, a Republican majority in both the house and senate may see these policies be removed. Red states have seen a flood of anti-ESG legislation that ban businesses for boycotting certain companies and industries and prohibit ESG consideration in investing for any purpose other than maximising returns. Florida, Texas, Ohio, Indiana, West Virginia, and Louisiana are among the red states with anti-ESG legislation in place.

According to research from Carbon Brief from earlier this year, Trump’s second presidency could add four billion tonnes of carbon to US emissions by 2030, which amounts to negating back five years’ worth of wind, solar, and other clean energy savings globally over the last five years, times two.

Alex Gold, CEO of NA office for BWD Strategic, which specialises in corporate sustainability and reporting, stated to Finextra that sustainability will not be able to be phased out of businesses, but there will be challenges arising global companies that want to serve the US market whilst driving sustainability if further anti-sustainable policy is established.

However, Gold furthers: “While we wouldn't expect Trump to actively regulate in favour of the transition, we also wouldn't expect him to take away business incentives focused on US resource efficiency (which saves costs) and job creation through infrastructure development (even if this infrastructure is renewable energy). These incentives are "pro-business" (which aligns with Trump's ethos) and also helps sustain US business competitiveness on a global scale, given increasing global customer demand for enhanced sustainability and increased investment in the sustainable transition from China. If US business loses out to China, this is a bad outcome for anyone - particularly Trump.”

What can we expect?

Trump has pledged to move against electric vehicle sales and roll back the Environmental Protection Agency’s (EPA) rule to limit tailpipe pollution from cars and trucks. Number 15 on Trump’s Agenda 47 outlines: “Cancel the electric vehicle mandate and cut costly and burdensome regulations.”

Since his win, Trump has appointed New York congressman Lee Zeldin to head the EPA under his administration. Trump stated that “he will ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses, while at the same time maintaining the highest environmental standards, including the cleanest air and water on the planet.”

Zeldin voted against the IRA in congress, and has no prior experience in environmental policy.

On Trump’s campaign platform, his policies label the Paris Climate Accords as “unfair and costly”, and the Green New Deal as “socialist”.

As massive AI development in the tech and finance industry is undeniable, AI usage will demand more electricity and energy, which Trump is sure to finance – even if electricity must be generated using nature-killing coal.

The president-elect has also promised to tap into oil and gas production, which was curtailed under Biden. On energy supply, Trump advocates for American-produced oil, gas, and diesel, advocating for the further use of energy-guzzling fossil fuels and ample carbon emissions. The further development of offshore wind, oil production, and federal government financed  powerplants is expected from Trump’s “drill, baby, drill” pro-fracking rhetoric that is planned to lower energy prices.

Gold added: “Another thing is that oil and gas companies can benefit from the transition by producing hydrogen fuel. Many of them are already pivoting this way to some extent, but the economics haven't lined up yet. So, we may expect Trump to issue handouts to oil and gas companies so they can capitalise on it, rather than suggesting that these companies should transition to hydrogen without federal support (a popular sentiment on the left).”

In January this year, while on the campaign trail, Trump championed gas an oil production in a Fox News Town Hall, stating: “We have more liquid gold under our feet; energy, oil and gas than any other country in the world, we have a lot of potential income.”

In a pressing period rife with geopolitical tension and climate catastrophe, Trump has called climate change a “hoax” and a “green scam” repeatedly, despite the clear impact of climate change on the US in particular; where cyclones, hurricanes, typhoons, wildfires, floods, and tornadoes are occurring in higher frequency every year. With COP29 occurring in the backdrop, hosting a climate financing stalemate that could lead to further global disruption, we can only hope there are better days to come for climate policy.

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