Trump 2.0 would not derail the global energy transition

There is no doubt that Trump’s re-election as president would reduce the pace of US efforts to support the Paris Agreement’s goal of holding global temperature increases to well below 2°C.

Withdrawal from the UNFCCC would be unprecedented

Trump 2.0 would come at a critical juncture in global efforts towards achieving a net zero energy transition by the middle of this century. There is no scope for delay in cutting global emissions. Yet Trump’s campaign has indicated that if re-elected he may opt to withdraw from both the Paris Agreement and its underlying structure, the UN Framework Convention on Climate Change (UNFCCC).¹

Unlike Trump’s presidential decree to exit the Paris Agreement in his first term (later reversed by President Biden in 2021), a US withdrawal from the UNFCCC would likely be permanent. It would also be unprecedented; 198 countries have ratified the convention, and no party has ever withdrawn.

This would increase political uncertainty around the net zero transition. Uncertainty is not a friend of energy investment; a truth Australians know all too well.

Strengthening the negotiating hand of China and the Global South

Any decline in US climate change ambition will also serve to strengthen Chinese dominance of clean energy industries. There are strong security and economic imperatives for all countries to diversify clean energy supply chains and provide ambitious levels of climate finance to developing countries as they decarbonise.

The US election in November also coincides with UNFCCC negotiations for countries to agree to post-2020 climate finance goals in Baku at COP29.

The exit of the world’s second-largest greenhouse gas emitter, who bears substantial responsibility for historical emissions, would be viewed as an abdication of leadership, particularly by developing countries. It would strengthen the negotiating position of the disparate but increasingly salient groupings of Global South countries, while reducing the power of Australia’s negotiating block, the Umbrella Group, just as we seek to co-host the UN climate conference with Pacific Island countries in 2026. It would also encourage the petrostates and other climate laggards in the UNFCCC to stymie efforts to rachet up global ambition.

A full domestic rollback is impossible

Domestically, Trump has been dismissive of the Inflation Reduction Act (IRA), which he has described as “the biggest tax hike in history”, but it is unclear if he would seek its repeal.² Within the Republican Party, there are divergent views about whether the IRA should be wound back. Where possible, the Biden administration designed IRA funding to be dispersed before the election, (such as the US$27 billion in funding for Green Bank programs), so a full rollback would be impossible. But the tax credit provisions of the legislation that provide the majority of funding through the IRA are more open to being revised or repealed.

Trump has been more forthcoming about his support for the fossil fuel industry if re‑elected, proclaiming that he will “drill baby, drill”. Trump will likely enact a series of executive orders to reduce regulation of the oil and gas industry. These would repeal a range of measures introduced by the Biden administration, including a ban on routine flaring at new oil and gas wells, monitoring for methane leaks, new standards for equipment, and reduced leasing of lands for oil and gas development.³

A Trump administration will almost certainly enact sweeping changes to environmental public service agencies, beyond political appointments, as was the case in his first term. The Environmental Protection Agency and Department of Energy will see significant reductions in funding for core programs.⁴ Regulators would roll back environmental measures including the climate disclosure laws recently enacted by the Securities and Exchange Commission.

The final important consideration when gauging the impact of a second Trump term on climate change action is the degree to which subnational and business action can counterbalance any reduction in Federal US climate change ambition. In President Trump’s first term, some states led by Democratic Party governors implemented ambitious climate change policy measures, and many large corporations committed to net zero emissions to show strong support for the Paris Agreement. While some subnational and business actors could again increase emission reduction efforts, we are not in the heady days of 2016 when the Paris Agreement had just been signed, when borrowing money was cheap, and many actors had little idea how challenging decarbonisation would be.

It is difficult to predict the climate change impacts of a second Trump term, but they will very likely be worse than his first. While weak US action on climate change for the next four years would slow the pace of the net zero transition, it will not derail global efforts to decarbonise. Ironically, it would likely serve to strengthen China’s dominance of clean energy technologies and diminish US prosperity by reducing their future share of these industries.

Michelle Lyons is a Research Fellow in the Indo‑Pacific Development Centre.