For many, the global climate and clean energy implications of a Joe Biden victory on 3 November can be boiled down to one campaign promise: returning the US to the Paris Agreement.
Donald Trump, who has called climate change a hoax, promised during his 2016 presidential campaign to take the US out of the agreement his predecessor Barack Obama had signed just months earlier. After vacillating for several months, during which members of his administration tried to talk him out of it, Trump finally pulled the trigger in June 2017.
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But the agreement’s rules mean that exit won’t actually take place until 4 November 2020, and Biden could immediately put the US back in three months later. As significant as the move would be, it would be easy. Next would come the hard part – rebuilding the world’s shattered trust in America and creating a national climate and clean energy plan from scratch capable of delivering on the Paris commitments.
Tom Burke, chair of the think tank E3G, says re-establishing the trust of global partners will be key. Unlike when the US pulled out of the Kyoto Protocol 15 years earlier, the Paris Agreement has remained relevant after the US announced its departure and still looks set to be the world’s guiding energy framework. In fact, though the dynamics in Kyoto were that the US wouldn’t do anything China wouldn’t do and vice versa, since Trump’s announcement China has doubled down on its commitments and last month pledged to reach carbon neutrality by 2060. The world has moved on, and the US will have to catch up. China has emerged as the preferred climate partner of the EU, the first major economy to have pledged to be a net zero emitter by 2050.
“I don’t see America striding back into the place it held before,” says Burke. “If there are analysts in the US who think America can quickly restore what the Trump regime has lost, they’ve misunderstood the amount of damage Trump has done to America’s authority. There’s an opportunity to rebuild, but it will depend on actions, not statements.”
Shale gas boom continues
Whoever wins the election, the US will remain the world’s number one oil and gas exporter. Biden has said he will not put the brakes on the shale gas boom, which has transformed the US energy landscape over the past 15 years.
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By GlobalDataThat boom means the US is now an energy exporter eager for new markets. The replacement of coal with gas, combined with the rapidly declining price of renewables, has caused US emissions to decline. This drop has come despite Trump gutting US environmental law and climate commitments, thanks to his failure to deliver on his campaign promise to revive the country’s declining coal industry. The shale gas boom predated Trump and looks set to outlast him. And if past is prologue, the Biden administration will probably try to follow the Trump administration and exert the same pressure on European allies to import America’s excess production as liquified natural gas (LNG).
But how Biden will balance this embrace of the shale gas boom with the ambitious clean energy goals he has laid out in his campaign is unclear. Biden’s $2trn climate plan is the most ambitious environmental proposal ever put forward by a presidential candidate. It would set a target of making the US electricity system carbon-neutral by 2030, a big reach given it’s now two-thirds powered by fossil fuels. And, in line with the EU, he would aim for the US to reach overall net zero emissions by 2050.
Karen Orenstein, an American climate campaigner with Friends of the Earth, says that, while the targets will be encouraging news for America’s global partners, they will want to see the US put its money where its mouth is before they in turn increase their ambition.
“There’s a lot in Biden’s plans that isn’t clear yet,” she says. “Campaigners, and progressives in Congress, are going to be pushing as hard as possible for a climate-driven implementation of policy.” But she warns: “It may be a rough road. The Senate and the House are not easy places to get anything done. We’ll see who Biden chooses to put around him.”
Fleshing out these policies may take time. After four years of the Trump administration dismantling US environmental legislation, and substantially gutting the Environmental Protection Agency (EPA), a lot of rebuilding work will have to be done before new policies can be put in place. Biden’s team would have to put things back as they were and then go “a lot further”, says Orenstein.
Emissions trading verdict
Over the past four years, conservatives in Europe have used US inaction as an excuse to pull back on EU climate ambition, citing fears about potential competitive disadvantages. Peter Liese, German MEP in charge of climate for the European People’s Party – the EU’s most powerful political bloc – led his group in opposing a European Parliament vote to increase the EU 2030 emissions reduction target from 40% to 60%. This target is higher than the Commission’s 55% proposal, and is closer to the 65% climate campaigners say is needed to hold global heating to below 1.5°C.
“It is very clear that all major economies have to do more to avoid dangerous climate change, but the 55% will be by far the most ambitious contribution of any major economy in the world,” Liese says. “From 1990 to now, we have reduced emissions by 25%, while all other major economies have increased their emissions”. While this is true over a longer-term perspective, US emissions have fallen in recent years. The EPP has said climate ambition can only be increased if a ‘carbon border tax‘ is applied on imports from countries that don’t have ambitious climate legislation, such as the US. But if the US resumes efforts to tackle climate change, it could have a big impact on EU policymaking since the country could no longer be used as an ‘inaction bogeyman’ to scare people into lowering EU ambitions.
There are two climate policies, in particular, that European policymakers will be watching should Biden win the election – carbon trading and the just transition.
In the 2000s, when the EU was designing the main roll-out of its Emissions Trading Scheme (ETS), the centrepiece of its climate strategy, it worked with Republicans and Democrats with a view to eventually linking it with an American system. Republican presidential candidate John McCain was promising to devise a similar cap and trade system, in which companies must purchase and trade permits to emit carbon, to reduce US emissions. But after he was defeated by Obama in 2008, Republicans resisted everything Obama proposed, including the very cap and trade programme that had been championed by his Republican opponent. Obama eventually chose to abandon his cap and trade proposal and spend his domestic political capital on healthcare instead.
The EU ETS became the lone major carbon trading system and has experienced plenty of teething problems over the past decade – mostly involving a too-low carbon price. China and some US states and Canadian provinces are now launching their own systems with which the EU scheme could link. Many more countries are on the fence, perhaps waiting to see what the US will do. The big question is whether Biden would choose to go back to the Obama cap and trade plan, or opt for a different route, such as a carbon tax. Many climate campaigners would prefer Biden ditches cap and trade.
“We never had any faith the ETS would deliver the type of emissions reduction we need to see,” says Colin Roche, a campaigner with Friends of the Earth Europe. “That’s been borne out in the decades since it’s been implemented. We wouldn’t have any faith that even if the Biden administration goes back to a cap and trade system or some form of emissions trading that we would see a sufficient shift forward to deliver real concrete ambition.”
Australia has already become the first country to cancel its emissions trading system, in 2014. Some have speculated that, if the Biden administration chooses a different policy tool to lower emissions, the EU might abandon or lessen the importance of its ETS and follow the US approach. Changes in the Supreme Court have “enormously reduced” the scope for legislative approaches at a federal level to address climate change, says Burke. “The opportunity for a Biden administration will instead be through the budget rather than through legislation, through Covid recovery funds in particular,” he adds. “I don’t see a return to any kind of comprehensive price-driven approach.”
The other policy the EU will be watching is how the US approaches the just transition – a plan to help workers adjust to a new low-carbon economy. The EU launched its just transition strategy and fund earlier this year, and Biden has been talking up the idea on the campaign trail, maximising his long-standing working-class appeal. The EU would welcome linking up to a just transition strategy for both economies, to minimise competition concerns.
“I think Biden is very serious about this, about keeping people whole,” says Orenstein. “And he’s been influenced by what Bernie Sanders has proposed, to keep fossil fuel workers and communities economically dependent on fossil fuel whole. I think that will be easier for him than on the fossil fuel phase-down side.”
Looking to China and Brazil
It is no secret that the success of international climate policymaking over the past four years has depended on China. When the US pulled out of Paris, all eyes were on Beijing. The Trump administration had reportedly assumed that the US pulling out of the pact would destroy it, but China’s decision to stay in and even increase its ambition saved Paris.
The question now is whether a Trump win could change that calculation in Beijing and revive climate scepticism in China. But Burke believes the opposite would be true, that China would view a Trump victory as an opportunity for increased action and to increase its authority as a “low-cost climate authority”.
A Biden win would have wider impact, though, and bolster climate innovators in the world’s other major economies and hurt climate conservatives, says Burke.
This outcome would be particularly true in Brazil, where President Jair Bolsonaro has used the Trump administration as a shield to justify dismantling the country’s environmental laws. Bolsonaro has also flirted with the idea of pulling Brazil out of Paris, but pulled back when the EU threatened to halt free trade talks. “I think if Trump isn’t re-elected, the pressure on Bolsonaro to conform to global standards will grow internally,” says Burke. “He hides behind Trump, but Brazil is pretty vulnerable to climate policy failure.”
The Russian, Turkish and Australian governments have also used the US withdrawal as justification to lower their climate ambition domestically.
Whether the global clean energy transition can survive a Trump second term is the big question. The short answer is yes. The past four years have shown that the world isn’t dependent on American leadership when it comes to climate. Talks have continued around the UNFCCC table even after the US largely walked away. But it would almost certainly slow the pace of change.
The falling price of renewable energy around the world and the increasing impact of global heating means the move from fossil fuels to renewables and greater sustainability will continue. But the sudden realisation that a climate sceptic will be at the helm of the US for another four years could cause resolve to falter, even in Europe, where conservative politicians are generally only comfortable with the EU being the world’s climate leader as long as it doesn’t stick its neck out too far.
EU leaders have already said they will not sign a free trade deal with the US if it is out of the Paris Agreement. But beyond this, the UN may have to think about amending the agreement to make it clear there are consequences for being the only country outside the pact, other than not having a seat at the table in crafting the world’s future climate and energy regime.
Burke says he believes the world will hold firm even if Trump is re-elected. “The reason anybody in any government anywhere acts on climate change is not because of what other governments do but because of their own assessment of their national interest,” he says. “It is important to understand that what’s happening on decarbonising our economy is no longer just driven by government policy. It’s being driven by the financial markets, which have understood that climate risk really matters.”
This article is part of an Energy Monitor series on the potential impact of a Biden win on the clean energy transition. For more coverage of the US presidential elections, check out our sister site New Statesman.
https://www.energymonitor.ai/policy/putting-bidens-clean-energy-plan-into-practice
https://www.energymonitor.ai/finance/clean-energy-investors-are-betting-on-biden
