Policy and Regulation

How the results of this election could reshape U.S. climate policy

The outcome of the U.S. presidential election and congressional races could inform emission reduction rules and clean energy incentives.
How the results of this election could reshape U.S. climate policy
(Source: FMT, Creative Commons License.)

Election Day in the U.S. has arrived. Tens of millions of Americans have already cast their ballots, with early voting hitting record highs in key battleground states like Georgia and North Carolina.

The outcome of the presidential race between Former President Donald Trump and current Vice President Kamala Harris has key implications for the power sector and for broader decarbonization goals. Control of the U.S. Congress is also at stake and could also impact policy in this space.

If Donald Trump wins the presidency, some sort of reversal of U.S. climate provisions is expected. If Kamala Harris wins, she’ll at least stay the course set by President Joe Biden’s administration, which saw the passage of significant legislation to accelerate the clean energy transition.

If Trump wins

Ben King from Rhodium Group suggested that if Trump were to win the presidency, the U.S. might step back from its Paris Agreement commitments and reconsider its involvement in the United Nations Framework Convention on Climate Change framework, which would mark a significant policy shift.

Regarding more specific actions, King said a good predictor might be to look at what Trump did when he became president after being elected in 2016.

Early in his presidency, Trump signed an executive order mandating the U.S. Environmental Protection Agency (EPA) review the Clean Power Plan, an Obama-era policy that never went into effect but aimed to reduce emissions from power plants, specifically coal-fired plants. The plan would later be repealed by Trump-appointed EPA leadership.

King anticipated that a new Trump administration could similarly target Biden EPA rules, like the one that requires coal and new natural gas-fired plants to capture their carbon or retire by varying compliance deadlines in the 2030s.

Opponents of the EPA rule, which include trade groups like the National Rural Electric Cooperative Association (NRECA), have argued that its implementation would jeopardize grid reliability and that the emission reduction technologies proposed by the agency aren’t ready for prime time.

Of course, the million dollar, or rather the multi-hundred-billion dollar question is, what would happen with the Inflation Reduction Act (IRA), the most substantial U.S. investment in climate action to date. The IRA provides tax credits and incentives for renewable energy, storage, nuclear, carbon capture, electric vehicles and more.

In one sense, the impact of the IRA is just starting to be felt. But King said through a joint project, Rhodium Group tracked a record $76 billion clean energy investment in the second quarter of 2024, a 25% increase over the same period in 2023. Not to mention the jobs created.

“We’ve seen a flourishing of investment in clean energy manufacturing across the U.S., particularly concentrated in red states and in red congressional districts,” said King, who is Associate Director with Rhodium Group’s Energy & Climate practice.

Because of the IRA’s diffuse and widespread benefits, even a Republican congressional majority might not have the appetite to repeal the entire legislation, but rather do it piecemeal.

“Even Speaker Johnson has walked away from the notion of a full-out repeal,” said King. “With a [Republican] congressional majority, you could go through and surgically remove whatever pieces you wanted. Or you might see changes to requirements.”

If Harris wins

King suggested that a Harris administration would prioritize fully implementing the IRA, including ensuring ongoing support for programs like the U.S. Department of Energy’s loan program to accelerate next-generation clean technologies.

While the U.S. is currently not on track to meet Paris Climate Accord targets, King said the U.S. is projected to reduce greenhouse gas emissions 32% to 43% by 2030, from 2005 levels.

“Our latest estimates for where the U.S. economy is headed with regard to its emissions are promising,” he said.

King said a Harris administration might continue to build on the EPA rules for fossil-fired plants that have been ushered in during the Biden administration.

For example, he said the EPA might revisit emissions regulations for existing combustion turbines, which the agency said it would leave alone until after the election.

With more time than the Biden administration, King said a Harris administration might also tackle conventional pollutants through improved regulations on air quality standards like the Mercury and Air Toxics Standards (MATS).

While voters primarily cite issues like the economy, immigration and reproductive rights as primary reasons to support a candidate, King said some of these higher salience issues for voters might have direct ties to climate action.

For example, he noted the onshoring of manufacturing for electrolyzers and EV batteries could influence voters from an economic standpoint.

“That has a real impact on good jobs, high quality jobs in some of these places that might matter a lot more to somebody than what the CO2 parts per million concentration is,” he said.