The World Reacts: What Donald Trump’s Election Means for the Energy Sector
Donald Trump’s surprise victory in the presidential election changes everything in terms of energy and climate politics in the United States, and many of those changes can be made by the incoming president swiftly, and without congressional approval. As many of President Obama’s environmental regulations were based on executive action, President-elect Trump would be able reverse these with a mere signature once inaugurated.
Larger and more complex items on Donald Trump’s environmental to-do list, such as reducing the authority of the Environmental Protection Agency, will need congressional action, but given that Republicans have retained control of both chambers of Congress, there is a good chance that Mr Trump will be able to pass legislation which had hitherto seemed highly unlikely at best.
Trump will likely follow through on his vow to repeal the Clean Power Plan, which in turn would undermine U.S. promises to cut total U.S. greenhouse gas emissions by 26 percent by 2025. The president-elect has also promised to end payments to the Green Climate Fund, which allocates billions of dollars each year to developing nations.
Trump’s election also has cast a major shadow over the near-consensus on global climate policy, given his scepticism of global warming, deeming it little more than an “expensive hoax”, and his seemingly archaic embrace of the coal industry.
The United States has been a vital part of the narrative on global warming politics since the Kyoto Protocol in 1997, and environmentalists had hoped the Paris Agreement of December 2015 would finally ensure a permanent and legally binding agreement which would curtail emissions and future fossil fuel development for good.
While Obama helped negotiate the climate deal with China that paved the way the historic global emissions-reductions deal in Paris last year, Trump has pledged to “cancel the Paris Climate Agreement and stop all payments of US tax dollars to UN global warming programmes”.
Trump’s America First Energy Plan pledges to “unleash an energy revolution that will bring vast new wealth to our country”. America may already have undergone a shale revolution but Trump wants to go further, accessing “$50 trillion in untapped shale, oil and natural gas reserves, plus hundreds of years in clean coal reserves”.
Whereas Hillary Clinton had pledged to curb fracking to an extent, Trump plans to rip up energy regulations, reversing suspensions on production in federal lands and to “save the coal industry”, which could be deemed entirely counter-intuitive in an increasingly renewable world.
Renewable energy schemes, support by Obama, look extremely vulnerable under Trump, who has previously derided wind farms as “very ugly” and has blamed them for killing birds. He is also on record criticising the costs of both wind and solar power schemes.
Closer to home, however, Donald Trump’s presidency could actually be a boon for National Grid, the operator of Britain’s electricity network of cables and pylons.
The president-elect has set out his stall for increased investment in energy infrastructure, a position that could benefit the Grid, which owns gas pipelines and electricity cables in the US.
National Grid chief executive, John Pettigrew, said “The position in terms of Trump is that it’s early days… What we did see from the Trump administration is positive statements on the need for investing in infrastructure. If that flows through into policy, that could be good for the energy sector.”
However, not everyone shares Pettigrew’s enthusiasm. Shares in the world’s biggest maker of wind turbines, Danish firm Vestas, plunged amid fears that a Donald Trump presidency will be disastrous for the renewable sector.
Share fell as much as 14 per cent initially, before recovering to trade 6.6 per cent lower than previous at 440.20 kroner (£52.60). Vestas shares had already lost ground in the days preceding the vote as the race got tighter and even more unpredictable.
Mr Trump’s manifesto states that his administration will aim to “reduce all barriers to responsible energy production,” which he believes will ultimately lead to cheaper energy, but his methods of delivering this promise are at once uncertain and unnerving on an unprecedented global scale.