Energy and climate co-operation is one of the issues most likely to be disrupted. The Europeans are preparing for potentially major changes in global energy markets and geopolitical dynamics, in particular after the presidential elections in the United States at the end of the year.[1] As the elections are approaching in the US, new question marks have begun to emerge regarding energy policies, which are indispensable for 21st century geopolitics. The US, which has been seriously tested especially in foreign policy, has made changes in this regard with Joe Biden’s populist discourses and has made major gains in the field of energy geopolitics. Under the name of “Green Transformation”, it is possible to say that the rate of votes decreased in most states in the US in the axis of decreasing oil and gas regulation, green taxation and gradual transitions.
The green energy policies pursued by Biden have created employment opportunities with increasing wind energy and solar energy investments, especially in the southern and eastern states. As a result of the steps taken, the support of conservative Americans who are oil and gas producers, especially in the central states, has decreased.
On the other hand, it is very important to list the events that took place on a global scale and to observe the possible effects of these situations. Energy diplomacy and geopolitics have gone through periods that have severely tested the Anglo-Saxon and Continental-European countries, as well as their foreign policy reflexes. While in the eyes of the West, the steps taken against China in the Asia-Pacific region were considered to be weak, the increase in Russian influence in Africa together with China, together with the coups in the Central Sahara region, led to a strategic shift in access to energy raw materials and rare earth elements.
With the Russia-Ukraine Crisis, the green energy transformation was slowed down, while uninterrupted and less costly energy equations were sought on the supply-security axis. With the commissioning of base power plants and the acceleration of energy storage activities, the European continent narrowly escaped this crisis. In addition to this situation, the Houthis threatening the supply routes in the Red Sea due to the efforts to create an unstable area in the Middle East, which started with the Israel-Hamas conflicts, partially increased oil prices and indirectly led to the consolidation of global inflation.[2]
The US’s seven operating export terminals and five under construction will provide sufficient liquefied natural gas (LNG) to meet Europe’s demand by 2030, regardless of the presidential election. However, it is uncertain whether US LNG supplies will continue to grow. Europe’s growing dependence on US energy supplies while the war in Ukraine continues may push Brussels to further diversify its supply chains.
Europeans are increasingly worried about the prospect of a Republican presidential system fuelled by turbulent memories of the Donald Trump era. But a second Biden administration could also restrict energy exports through political pressure. Either way, Europe is expected to increase its strategic sovereignty and seek alternative partnerships for natural gas and other energy resources. Nevertheless, the US will remain an important supplier.
In short, the transatlantic trade agenda on energy will remain tense regardless of the winner of the US presidential election. Even if a second Biden administration says it wants to work closely with Europe on energy transit, protectionist impulses will persist.
The Trump administration’s perception that Europe is inferior to China on trade and the EU’s implementation of the Carbon Border Adjustment Mechanism (CBAM) will exacerbate these tensions. Trump will not want to co-operate on the trade-related climate agenda, but the US and Europe could work together on a CBAM-like system targeting China. Bipartisan support already exists in the US Congress for a “foreign pollution fee” targeting China. The next US administration will find it attractive to co-operate with the EU to get China to reduce its emissions if there is a block open to adjusting CBAM. Biden would see this as good climate policy, while Trump would probably see it as punishing China’s unfair trade practices. Either way, the US-EU co-operation on critical raw materials initiated under the current administration could provide another venue for a unified transatlantic approach to China.[3]
Biden’s Inflation Reduction Act of 2022 (IRA) provides tax incentives for low- or zero-carbon technologies worth approximately $800 billion to $1.2 trillion over 10 years, according to federal government and private sector estimates. Trump has criticised some elements of the IRA and pledged on his 2024 campaign website to eliminate the “Socialist Green New Deal”. Conservative groups, including former Trump administration officials, have openly called for the complete repeal of the IRA. However, as long as the Republicans do not maintain full control, the IRA is thought to be “safe” for the coming years. Patrick Luckow of Commodity Insights said, “I think these tax credits will be quite durable for several years.” Mosby and Luckow emphasised that the IRA is unlikely to be completely eliminated even if the Republicans gain full control. This is because the vast majority of this legislation’s investments are located in Republican-leaning and swing states.
Texas, the leading renewable energy market in the US, has attracted nearly $75 billion in private sector and federal funding for clean energy and transportation projects supported by the IRA and the Infrastructure Investment and Jobs Act of 2021. Georgia, emerging as a solar and battery manufacturing hub, announced nearly $39 billion in clean tech investments, more than California. In addition, states such as Alabama, Arizona, Indiana, Kentucky, Louisiana, North Carolina, Ohio, South Carolina, Tennessee and West Virginia have also received significant investments in clean technology under the Biden administration. Policies favouring carbon capture and hydrogen projects are less at risk because these technologies are compatible with the oil and gas industry and enjoy broad political support. For example, “blue” hydrogen is considered to have applications as a substitute for fossil fuels because it is produced using gas and can be transported and stored with existing gas infrastructure.[4]
Trump and Biden’s energy policies differ substantially. Under Trump, energy policies have generally focussed on incentivising fossil fuel production and use. While coal and oil industries were supported, environmental regulations were relaxed. At the same time, the US withdrew from the Paris Climate Agreement.
The Biden administration focuses on combating climate change and transition to sustainable energy. Efforts to reduce carbon emissions have been intensified by returning to the Paris Agreement. In addition, investments in renewable energy sources have been encouraged. Biden’s policies aim to increase energy efficiency and support the development of clean technologies.
If Trump is re-elected, energy policies are expected to be oriented towards fossil fuels and regulations are expected to be loosened, while sustainable energy and climate policies are expected to be strengthened if Biden is re-elected. Party control in Congress will also play a critical role in the implementation of these policies.
As a result, there are significant differences between Trump and Biden’s energy policies in the US, and future election results will be the determining factor in the country’s energy transformation and strategies to combat climate change.
[1] “US Energy Policy After the 2024 Elections”, GMF, Alix Frangeul-Alves Douglas Hengel, https://www.gmfus.org/news/us-energy-policy-after-2024-elections, (Access Date: 19.02.2024).
[2] “In 2024, Americans Must Decide What Energy Costs Mean to Their Vote”, The Epoch Times, https://t.ly/8WV9r, (Access Date: 28.01.2024).
[3] “Big Oil boomed under Biden. So why does it hate him?”, Financial Times, https://www.ft.com/content/d64b1fc1-59b6-4fbd-8a88-8d786e4df474, (Access Date: 09.05.2024).
[4] “Feature: US energy transition faces ‘pivotal moment’ in 2024 election.”, S&P Global, https://www.spglobal.com/commodityinsights/en/market-insights/latest-news/electric-power/062524-us-energy-transition-faces-pivotal-moment-in-2024-election, (Access Date: 25.06.2024).
