The United States could see a deceleration in clean energy rollout and risks losing $1 trillion in low-carbon energy investments if Donald Trump wins the presidential election in November, Wood Mackenzie said in a new report this week.
A Republican victory in the presidential vote could slow the energy transition momentum of Joe Biden’s presidency and reduce investment in the clean energy sector, as Trump is expected to roll back some of the key green energy policies of the Biden Administration.
Although Trump – if elected – is not expected to fully repeal President Biden’s Inflation Reduction Act (IRA) of 2022, he is likely to scrap major clean energy policies including a pledge to decarbonize the power grid by 2035. He is also set to soften emission reduction goals and regulations, according to WoodMac.
The energy consultancy expects the U.S. to see $7.7 trillion in investment for the U.S. energy sector from now until 2050. But less policy support for clean energy and infrastructure improvements would reduce this base-case investment projection by about $1 trillion, Wood Mackenzie’s analysts say.
“This election cycle will really influence the pace of energy investment, both in the next five years and through 2050,” said David Brown, director of Wood Mackenzie’s Energy Transition Research.
“Investments in low carbon supply need to be made in the near term to realize longer-dated decarbonization targets. US carbon emissions could grow, putting net zero out of reach in our delayed transition scenario.”
If he wins in November, Trump is set to overturn or at least try to dismantle many of President Biden’s energy and climate policies, including methane rules, the pause on new LNG export permits, EV mandates, federal oil and gas leasing, and even parts of the Inflation Reduction Act.
The IRA is under scrutiny for possible scrapping of tax breaks, according to Trump advisers and people with whom Trump is directly discussing energy policy issues.
However, dismantling the IRA would first need a Republican-controlled Congress with both House and Senate. And even then, it could be difficult to scale back or scrap the incentives, as they mostly benefit projects and jobs in Republican states, analysts say.
By Tsvetana Paraskova for Oilprice.com
