President Trump’s First 100 Days in Office: Implications for US Clean Energy and Climate Change Commitments

Camilla Rogers, 04 May 2017

One year ago, we discussed how 2016 was set to be a key decision year for US and global climate change commitments (see ‘2016: Decision Year for US and Global Climate Change Commitments?’).  The US presidential primaries had demonstrated a general lack of Republican support for climate change mitigation, and the US’ landmark climate policy (the Clean Power Plan) was facing multiple legal challenges – both of which have serious potential ramifications for global climate change efforts.  In November 2016, Republican Donald J. Trump was elected President, and as his first 100 days in Office draws to a close, we re-visit this topic to discuss the implications of his recent Executive Orders and decisions – for both the US energy industry and global climate change commitments.

Since assuming office on January 20th 2017, President Trump has issued 23 Executive Orders and 20 Presidential Memoranda.  Immigration, trade, healthcare, energy and the environment have been top of the agenda, and only 4 days after taking office Trump issued Presidential Memoranda to review and approve two long-disputed crude oil pipelines – the Dakota Access and Keystone XL Pipeline projects.  Both of these projects were denied by President Obama for environmental, social and economic reasons (for example, Keystone transports oil from Alberta’s energy inefficient oil sands; and Dakota was strongly opposed by Native Americans), but President Trump argues they will improve domestic energy security and create jobs.  This focus on deregulation, infrastructure investment, and traditional energy resources has continued throughout the subsequent three months.

On March 28th, 2017 Trump issued his highly-anticipated Executive Order “Promoting Energy Independence and Economic Growth”.  The Order rescinds several energy and climate-related regulations passed by President Obama, lifts the moratoria on coal mining leases on federal land, requires that agencies revert to (lower) Bush-era standards to judge the cost of carbon emissions, and requires an immediate review of existing regulations – the goal being to “appropriately suspend, revise, or rescind those that unduly burden the development of domestic energy resources”. 

The Environmental Protection Agency’s (EPA’s) Clean Power Plan (CPP) is specifically highlighted in the Order as requiring immediate review.  The CPP (finalised in August 2015) requires a 32% reduction in carbon dioxide emissions from existing US fossil fired power units by 2030, and as such forms a key part of the US’ strategy to meet commitments under the global Paris Climate Change Agreement.  Since inception, the CPP has faced significant legal opposition from energy-intensive states and industry, and the US Court of Appeals for the DC Circuit recently granted the Trump Administration a 60-day deferral on any decision on the litigation.  Meanwhile, the EPA review will be conducted by new EPA Administrator Scott Pruitt, until recently Oklahoma’s attorney general and a leader in the lawsuit seeking to overturn the CPP.  Pruitt has been instructed to assess and potentially "take legal action" to reverse the legal memorandum the Obama administration relied upon to justify the CPP.  It is therefore expected that the CPP will meet an unceremonious end in 2017, although this too will not be without legal challenges.

Through this Executive Order, President Trump has made it clear that he intends to fulfil his campaign promises to undo Obama-era climate and environmental legislation, and promote domestic energy resources – including coal, oil and natural gas.  However, the key climate policy Trump has not yet touched – despite election promises to the contrary – is the global Paris Agreement, which commits the US to reducing emissions by 26-28% by 2025.  President Trump plans to make a final decision on the fate of this Agreement before a G-7 meeting at the end of May, and there is heated debate as to which way he will swing.  Originally, a withdrawal from the policy seemed inevitable, but there are now dissenting views within his cabinet given the foreign relations and trade implications of withdrawal.

So far then, the jury is still out on how significant a Trump Presidency is for both global climate change and the US clean energy industry.  China, India and the EU are forging ahead with implementing domestic climate change mitigation plans.  And in the US, it is federal tax credits, state policies (which Trump cannot touch) and, increasingly, pure economics, that are now the main drivers of the £60 billion clean energy sector.  The investment and production tax credits were recently extended to 2019 and 2020, respectively, for certain technologies, although it is possible these could be rescinded under Trump’s planned overhaul of the US tax code.  Renewables in the US are increasingly a mainstream issue at present, and often one that is supported by both Republicans and Democrats – Republican-dominated Texas, for example, has the most installed wind generation capacity of any state.  If the President were to propose repealing these tax credits, opposition on this may be strong, especially as clean energy employs 769,000 people. 

Perhaps the most compelling argument for the continued deployment of new wind and solar is the recent technology advancements and associated reduction in costs.  This, combined with fracking and associated low natural gas prices, has been the biggest driver of the decarbonisation of the US power sector, over and above federal policy.  As a result, the US is already on track to exceed many of the targets in the CPP, largely due to the coal-to-gas shift which is occurring independently.  It is unlikely that Trump will be able to reverse this trend and bring back coal, even though this is one of the stated goals of his Presidency.

In summary, the Trump administration is undoubtedly a negative for US and global climate change mitigation, and for the US renewables industry.  However, so long as other countries fulfil their pledges under the Paris Agreement and the cost of natural gas and renewable power continues to fall, the US and the rest of the world should continue to decarbonise their power sectors.  The President could still target existing CAFE automobile standards and the Paris Agreement, but there are strong economic and political dis-incentives to prevent this from happening.  Going forward then, we will continue to monitor developments in the sector, and seek to assess the on-the-ground impacts of these policy changes.

Update: On June 1st 2017, President Trump announced that the US will withdraw from the Paris Accord.  Under the rules of the agreement, the earliest any country can leave is November 4th 2020 – which happens to be one day after the next US Presidential Election.  In the intervening years it is expected that the US will not be a constructive participant in annual international climate meetings, and will continue to dismantle domestic climate change mitigation programs (most importantly, the CPP).  Assuming President Trump does follow through on his commitment to leave the Accord in 2020, any new president can re-join the accord within 30 days by submitting written notice to the United Nations.  However, by this point the US’ credibility on international climate issues will most likely be damaged, and it may take time for other countries to regain confidence in the US’ ability to stick to international climate agreements.  

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