With the Republican and Democratic parties more divided than ever before on energy and climate policy, the 2020 presidential race will be a hinge election. A second term for President Trump will entrench the “energy dominance” agenda. A new Democratic administration will likely bring a tour de force of federal executive action on climate policy through US domestic, foreign and trade policy.
Yet regardless of the outcome on 3 November 2020, a likely divided Congress, changing judiciary, state prerogatives, increasingly vocal citizen activists and the sheer scale and complexity of our energy system will limit the ability of any president to deliver profound change. The direction of federal policy has major impacts and will hang on the 2020 electoral cycle, but policy uncertainty and volatility will persist regardless of the outcome.
If President Trump is re-elected, the Republican Party will continue to support his “energy dominance” agenda. This means expanded production on federal lands, increased access to abundant US fossil fuel resources and no policy to reduce greenhouse gas emissions meaningfully at home or abroad. With the help of new Republicans appointed to the federal judiciary, the Trump administration will complete its expansive deregulatory agenda. The last three years have witnessed a thorough rollback aimed at rewriting—and, in some cases, rescinding—numerous environmental policies at the federal level including: the Endangered Species Act, vehicle efficiency (CAFE) standards, replacing the Clean Power Plan with the far more limited Affordable Clean Energy (ACE) Rule and new Council on Environmental Quality (CEQ) guidance reducing the weighting and disclosure of GHG required for implementation of the National Environmental Policy Act (NEPA), among many other efforts.
The Trump administration will limit the consideration of climate change in the permitting of new infrastructure (notably, pipelines and LNG terminals), abetted by a firm majority on the Federal Energy Regulatory Commission (FERC). Looking outward, a second term would see a continuation of isolationist, unilateralist trade and foreign policy that emphasises transactional relationships over the traditional alliance system and shared values. The persistence of trade headwinds will continue to hang over US energy producers and exporters as the administration pursues the second phase of its plans to reshore manufacturing and delink global supply chains.
Conversely, a Democratic vision (as articulated by early candidates’ proposals) prioritises a national climate policy—designed to rapidly reduce US emissions—through transformative investment in clean energy infrastructure, restriction of access to federal lands for hydrocarbon development, offshore drilling curtailment or bans, revival of protections for sensitive ecological regions and national parks, increased regulation of emissions from energy production, transportation and combustion, and scaling up of zero and low-carbon fuels throughout the US economy.
A Democratic president, whether moderate or more progressive, will likely use executive authority to transform the permitting requirements for new fossil fuels infrastructure by strengthening rules for implementing the National Environmental Policy Act (NEPA). These will likely clarify the scope of climate impact and emissions reductions disclosures required by project developers, and potentially require emissions from new infrastructure to be offset, or neutralised (e.g. by the planting of trees or use of carbon capture techniques).
The Democratic candidates (and many voters) agree on the need to reduce US emissions and expand available renewable energy expeditiously, but the candidates offer widely different strategies on how deeply to reduce emissions, how fast, and which tools should be employed. The most ambitious plans, similar to the Green New Deal, envision replacing fossil fuel energy in power generation, buildings, and transportation and requiring utilities to achieve 100% clean, renewable electricity by the 2030s. To facilitate a systemic transformation, most candidates’ plans include trillions in new infrastructure spending, potentially creating thousands of new trades and construction jobs and supporting regions and communities especially vulnerable to climate change. However, in the absence of supportive legislative majorities in both houses, this prodigious infrastructure spending and historic expansion of federal power into the US electricity markets and investment decisions is unlikely to prevail.
Moreover, the importance of Democratic support in key swing states, where thousands of jobs depend on fossil fuels production, will likely be a moderating influence. Looking outward, Democrats may share scepticism of globalisation and multilateral trade, but will (re)embrace alliances with other liberal democracies and enshrine climate and environmental issues at the heart of the trade and foreign policy agenda. The US will re-enter the Paris Agreement with a renewed (and more robust) Nationally Determined Contribution (NDC) predicated on a plan to develop a national climate policy based on now widely articulated “net-zero emissions” by mid-century.
International alliances and future trade agreements will feature shared commitment to dealing with climate change. This will especially apply to China, with which any future presidential administration will likely have an adversarial relationship. It is very likely that a Democratic administration will put pressure on carbon-intensive economies overseas to clean up their act or risk losing access to US markets.
The disparity between scenarios can be fairly described as a sea change in direction, with serious implications for all stakeholders. Both scenarios present their own challenges. A second Trump term will see intensified pushback; on “fast-track” permitting decisions in the courts as well as in states averse to new fossil fuels infrastructure. States committed to their own climate goals will fight in the courts to hold federal policies as a floor, not a ceiling, on their own local and regional strategies to reduce emissions. Citizens concerned about climate change will turn to consumer boycotts and use the courts to target unwanted infrastructure to combat federal approvals for fossil fuel projects.
A new Democratic president, on the other hand, will likely face a Republican Senate and a conservative Supreme Court. Both will act as limits on new legislation and expansive interpretation of existing authorities (such as those under the Clean Air and Water Acts). For these reasons, the major overarching challenges facing the US (and indeed global) energy markets will, regrettably, remain unresolved. Whichever administration takes office in January 2021, it will not be able to solve the systemic energy transition puzzle that has bedevilled policy makers (and their increasingly angry constituents) the world over.
The forces of inertia will limit both the ability of a Trump administration to dismiss climate change and that of a Democratic administration to address it. A rational course would see policymakers consider both a national climate policy and a just energy transition that embraces necessary new infrastructure of all types, while addressing the economic impacts of that transition on all sectors. That pathway is not yet in sight in 2020. As the calendar turns to 2021, volatility in markets and politics remains the only certainty.
- David L. Goldwyn is chairman of the Energy Advisory Group and a non-resident senior energy fellow at the Atlantic Council. From 2009-2011, he served as the US Department of State’s special envoy and coordinator for international energy affairs.
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