The polarisation of American politics is a subject well covered with the Biden vs. Trump campaigns heating up as we close down on the three-month point before the election. Every nationwide poll currently has Biden leading by between 6 and 15 points, but there is plenty of time for this to change and polls are often wrong.
We are not political commentators, and do not wish to profess a political allegiance either way. But when looking at the campaign strategies of the two candidates, which differ greatly on every front, we think important to emphasise that the outcome of this election will have a very significant impact on the intention and capability of the US to contribute to the fight against climate change for the next four years. And in business terms, there is vast opportunity awaiting the green economy should Biden win the election.
Greater detail was provided through Joe Biden’s announcement this week of a plan to spend USD 2 trillion over four years to significantly escalate the use of clean energy in order to achieve an emissions-free electricity sector by 2035, and to reach carbon neutrality by 2050. To put this into context the recovery budget from the European Union to help fund the transition to a carbon-neutral economy amounts to EUR 750bn. Of course, there is plenty done at national and state level across the two geographies, but for an economy only c20% larger than that of the EU, the relative size of this proposal for the US is significant. The ambition has also been significantly amplified; Mr Biden’s original plan was for USD 1.7 trillion to be spent over 10 years and for the power sector to be carbon neutral by 2050.
Biden commits to re-join the Paris Climate Accord if he wins the presidential election and paired this with a strong environmental rhetoric in his presentation of the plan this week. “We can live up to our responsibilities,” he stated, “meet the challenges of a world at risk of climate catastrophe, build more climate-resilient communities, put millions of skilled workers on the job and make life markedly better and safer for the American people all at once.”
A major element of this plan will be the very ambitious goal of reaching zero carbon emissions from the US electricity sector by 2035. Renewable sources currently meet 17% of US electricity consumption vs. 38% in Europe (excluding nuclear). According to the Energy Information Association, coal and natural gas still account for more than 60% of the sector. This will need to be replaced by “millions of new solar panels and tens of thousands of wind turbines.” According to Jesse Jenkins from Princeton University’s Net Zero America Project, the US would need to build 4 billion mega-watt hours to meet this goal, 2.5x the country’s current clean energy capacity.
This isn’t just about installing more renewable energy plants but also include efforts to upgrade the U.S. energy grid; electrify the country’s transit network; accelerate research on technologies such as batteries, advanced nuclear reactors and clean refrigeration; and advance incentives for development of electric vehicles.
The outlook if Trump is re-elected is, unsurprisingly, different. Trump continues to question the science of climate change, and over his first term in office has rolled back and limited various programs that had previously helped to drive growth and job creation in the green energy industry. Trump’s focus is on supporting the expansion of the fossil fuel instead, outlined very clearly on his campaign website. Fortunately, this has not prevented continued growth in renewable energy supply which has instead been fuelled by state-level subsidies and incentive structures such as the Californian carbon emission trading scheme, as well as the rapidly improving price competitiveness of renewable energy. For many projects renewable energy is the most economic option, regardless of state or federal intervention.
For President Trump, the idea of a green economy represents a threat to the American economy and the important fossil fuel industry. For Vice-President Biden, this is a route to economic growth, job creation and a safer future. The green economy thankfully does not rely on the political outcome, but a Biden win would certainly create a strong new tailwind.
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