ANALYSIS
Donald Trump has promised to halt federal climate action and repeal the Biden-era Inflation Reduction Act, which provides unprecedented spending for clean energy. The market momentum for renewables and efforts by states and cities may be the only hope for U.S. climate progress.
The November 5 election was the worst-case outcome for climate regulation. The return of Donald Trump to the Oval Office and Republican control of the Senate and the House of Representatives will halt federal progress and lead to reversal of most of the climate initiatives undertaken by the Biden administration.
Such a rollback occurred after Trump first won election 2016, but this time the stakes are even higher. Trump has promised to halt spending under the 2022 Inflation Reduction Act, the landmark climate law that dramatically increased federal support for clean energy technology and electric vehicles. And the president-elect has pledged to withdraw the United States from the Paris climate accord, reverse a key regulation aimed at reducing emissions from power plants, and roll back a host of key rules aimed at curbing climate change and air and water pollution.
Signs of light remain, however. Rapid advances in the technology and economics of clean energy have created a momentum that can be slowed but not stopped, with the cost of solar dropping globally by more than half since 2016. States and cities still retain much ability to reduce emissions and to prepare for the worsening physical impacts of climate change. But major progress will be in jeopardy because of the administrationâ€s actions on a host of fronts.
Renewable Energy
A clean energy economy requires the construction of a massive number of new wind and solar farms and the associated electricity storage and transmission infrastructure. Such facilities are needed to replace all the old coal plants and most of the natural gas plants, and to provide the added power needed for electrifying vehicles, building heating systems, powering energy-intensive industries, meeting the demand for data centers for artificial intelligence and cryptocurrency, and other new loads. In 2022 Congress passed the Inflation Reduction Act (IRA), which is providing hundreds of millions of dollars in subsidies and tax breaks for clean energy. The IRA, coupled with rapidly dropping costs, has spurred a large upsurge in new projects.
Red line: Trump eliminates key Biden climate policies. Blue line: Biden climate policies stay in place. Gray line: The current U.S. climate target. Source: CarbonBrief.
Yale Environment 360
The IRA passed Congress without a single Republican vote, and Trump has said he will ask Congress to repeal it. However, most of the IRA money for clean energy is going to districts represented by Republican members of Congress, many of whom oppose full repeal. Thus, Trumpâ€s ability to eliminate the relevant parts of the IRA is in question, though a cap on the multiplicity of tax credits seems likely. However, the Internal Revenue Service under Trump could make it difficult to utilize the tax credits by issuing very restrictive interpretations of the credits or refusing to release the necessary forms.
The fate of the IRA will be an issue next year with the scheduled expiration of parts of the 2017 Trump tax cuts bill. Trump will presumably want to extend those tax cuts. Congress will be looking for ways to pay for this. Slashing IRA subsidies could be part of that.
Another expected Trump target is the fee imposed by the IRA on methane leakage from oil and gas production. Methane is a powerful greenhouse gas, and this fee is the first nationwide carbon tax in the U.S. The industry is pressing for its repeal, and Trump will clearly be sympathetic.
Wind and solar projects located on federal land or waters (which includes all offshore wind) require federal approval. Trump has often expressed antagonism to wind, and federal approvals for new wind projects are likely to stall. Wind and solar projects on private or state-owned land generally do not require federal approvals.
Motor Vehicles
A critical area where the new Trump administration is expected to slash environmental rules is motor vehicles, which are the largest source of greenhouse gas emissions in the U.S. Federal agencies set emission and fuel economy standards for motor vehicles. Under both Presidents Obama and Biden (with a halt by President Trump in between) both these standards were strengthened, leading to progressively cleaner cars. Regulations adopted late in the Biden administration are even stronger.
Federal law allows California to set its own even more stringent standards if EPA grants a waiver, and if it does, other states may adopt those. States that have traditionally followed the California standards amount to around 40 percent of the market for passenger cars. California has adopted rules that would phase out internal combustion engine cars and require that all new cars starting with the 2035 model year be zero-emission, and EPA has granted the needed waiver. Eight states have adopted plans requiring all new cars to be zero-emission by 2035, but this depends on the California waiver; without it, state laws inconsistent with the federal standards are preempted.
Both the stronger fuel economy standards and the California waiver are being challenged in court. Trump is likely to direct the EPA and the National Highway Traffic Safety Administration to freeze or weaken the standards and to revoke the California waiver, as he did during his first term. These actions, too, will face court challenges.
The automakers are, of course, free to make as many electric cars as they want and are already retooling to increase their output. But whether they are compelled to do so depends on the outcome of these court cases. And importantly, the subsidies for electric vehicles in the Inflation Reduction Act are also at risk, as Trump has said he would consider ending them.
Coal-fired power plants
No one is building new coal-fired power plants in the U.S. any more, but there are about 225 still operating, and they are now the second largest source of greenhouse gases and also major emitters of unhealthy air pollutants such as fine particulates. Democratic administrations have for decades tried to accelerate their cleanup and closure, but the courts have frequently thrown up roadblocks. In 2024 the EPA issued a new rule that requires the eventual closure of these plants unless they install carbon capture and sequestration, a very expensive proposition. This too is being challenged in court and is very likely to be repealed by Trump.
Fossil fuels
Trump has adopted the “drill baby drill†mantra. He has also promised to cut energy prices in half, mostly by greatly increasing production of oil and natural gas. However, current production levels under President Biden are the highest ever seen in the U.S., and higher than any other country in the world. This is mostly due to fracking, which has become the largest source of primary energy in the U.S. (47 percent in 2023). However, fracking is economical only if the prices of oil and natural gas are high enough; a drastic decline in prices will drive down production. Trump will probably open more federal lands and waters to oil and gas drilling, including in the Arctic National Wildlife Refuge, and relax environmental restrictions on them. But whether this will dramatically increase production is open to question.
A pro-drilling sign at the Republican National Convention in Milwaukee, Wisconsin, July 2024.
Nam Y. Huh / AP Photo
Last January, Biden announced a temporary pause in the approval of new liquified natural gas export terminals. Trump will end that pause and try to expedite the approvals of these terminals and the associated pipelines.
International Agreements
Under Obama, the U.S. joined the Paris climate agreement; Trump withdrew; Biden rejoined; and Trump will no doubt pull out again. He might also go further and remove the U.S. from the United Nations Framework Convention on Climate Change, which the Senate ratified in 1992 and is the foundation for the Paris Agreement. Any of this would deny the U.S. a seat at the global climate bargaining tables and cede climate leadership to China.
For more than 30 years at the annual U.N. climate conference, the developing countries have been demanding “loss and damage†— compensation for the injuries they have suffered as a result of climate change. The U.S. has long been a target of these demands. With Trump in the White House and a Republican Congress, any hope of the U.S. providing funds for this purpose appears gone.
State and Local Action
While states cannot impose their own standards on motor vehicles without federal approval, in most other respects states are free to set stronger environmental standards than Washington. States can also adopt energy efficiency standards for appliances that are not subject to federal standards.
States and cities can use their procurement power to require low-emissions production of the cement, steel, and other commodities they buy and can demand clean motor vehicles and appliances. They purchase all of these in large quantities, which impacts manufacturers.
Blue states and cities, together with environmental groups, can be expected to vigorously litigate against Trumpâ€s actions on climate change, as they did during Trumpâ€s first term. The next four years will be rocky, indeed, and will keep lawyers on both sides very busy.
