Climate, energy, and the Trump administration: Revolution or evolution?
Originally published by Scott Nyquist on LinkedIn: Climate, energy, and the Trump administration: Revolution or evolution?
What can be said about President-elect Trump and climate change? It’s hard to know what to think because he has been keeping his options open. “I’m not a big believer in man-made climate change,” he said early last year. But then, he has also signaled approval of subsidies for clean energy. And the opposite. And somewhere in between: “I’m okay with subsidies, to an extent.” He is for “energy independence,” but that hardly clarifies things.
What is certain is that a President Trump’s policies will not be identical to those of President Obama (or of Hillary Clinton, for that matter). It is unlikely that if Trump had been President in 2015, that he would have been as enthusiastic about that year’s Paris accord, which set out a global approach to keep the planet’s temperatures from rising more than 2 degrees Celsius. At one point, Trump promised to pull out of the agreement; later, he said he had an “open mind.”
And it’s surely fair to say that a President Trump will be more sympathetic to the oil and gas industry; it would not be surprising if there was more support, in terms of tax relief and lighter regulation, for the sector and less of the same for wind and solar. Evidence for this is that two of Trump’s Cabinet picks—Rick Perry at Energy (above right) and Rex Tillerson at State (left) —have strong connections to the oil and gas industry.
For many climate activists, all this looks depressing. Certainly neither Perry nor Tillerson would have found a place in the inner circle of a President Hillary Clinton. But as governor of Texas, Perry actively supported the development of wind energy, and the state is now the country’s leader in that regard. Tillerson, as CEO of Exxon, favored a carbon tax as a way to address the possibility of climate change (something that Trump has specifically opposed). In October 2016, Tillerson stated, “At ExxonMobil, we share the view that the risks of climate change are serious and warrant thoughtful action.” The President-elect has never gone that far.
So, not only are Trump’s views hard to read, but so are those of his close advisers. In short, it’s uncertain. I suspect, however, that when it comes to energy and the environment, there may well be a good deal of continuity.
Why? Consider the following.
1. There are existing policies, attitudes, and changes whose course will run largely independent of who is in office. For one thing, a solid majority of Americans (70 percent) believe that there is evidence that human activity is causing climate change. Taking a bludgeon to many of the climate and energy policies that are already on the books, then, may not carry much political appeal.
Even more important, though, is that given the way that energy use and markets have been evolving, President Trump doesn’t actually have enormous room to maneuver. Indeed, argues David Victor of the center-left Brookings Institution, in important ways, “energy investment patterns and policies [that] are already largely grounded” so that at least in his first term, President Trump could “have very little impact.”
If that sounds counter-intuitive, it is, and like many a challenge to conventional wisdom, it is worth thinking about. For example, in 2016 large majorities in Congress passed a five-year extension to renewable energy tax and investment credits; those will therefore last at least through a first Trump term. That economic support is useful, but what is more important is that the prices of wind and solar, in particular, have been falling sharply. Lower prices have propelled a significant increase in the use of renewables. In 2015, global investment in renewables was double that of oil and gas. That money is going to keep working, no matter who is in the White House. By the way, the renewable industry itself doesn’t seem too fussed at the prospect of a Trump presidency, a sign that there is bi-partisan self-interest at work. The sector gave a significant amount of money to Republican candidates, maybe even a majority. The S&P’s clean-energy stock index has risen since the election (albeit not by as much as the S&P 500).
2. Much of the action is taking place not at the national level, but in the states. Brookings notes that in 30 states, covering all regions and political hues, economic growth is no longer associated with higher greenhouse-gas emissions. One implication of this “de-linking” is that the public is coming to believe that it is possible to reduce GHGs without taking an economic nose-dive. Another is that even if the federal government is no longer gung-ho, there is a lot of room for the states to act—as many of them are already doing.
Twenty-nine states have renewable portfolio standards, for example, and another eight have targets. There are also all kinds of other climate-related experimentation going on. Nine northeastern states have formed the Regional Greenhouse Gas Initiative, which not only created an emissions trading market for the power sector, but also funds and shares information on efficiency and grid improvements.
Other states are taking the lead on supporting new nuclear power; in the last decade, about half have passed legislation that is at least mildly favorable. In April, Wisconsin lifted its 33-year moratorium on new plants. I understand that many green activists don’t like nuclear power. The fact is, however, that nuclear provides 60 percent of low-carbon energy in the United States, and it is the only such source that can provide 24-7 power. It is certainly no contradiction to be in favor of both nuclear power and taking action on climate change, as a number of prominent client scientists have maintained. One question, though, is whether new nuclear plants can compete on cost with cheap gas and getting-cheaper solar.
3. What about fossil fuels? Here is an area where there may be a surprising degree of continuity with the Obama administration. Again, that sounds counter-intuitive, but look at the big picture. The shale-gas revolution, made possible by new technology known as “fracking,” occurred during the Obama administration; and federal lands continued to be leased for oil and gas development.
Shale is the bigger deal. Its development has undercut the use of coal, which is both more expensive and dirtier than natural gas. And while candidate Trump declared he would end the “war on coal,” the fate of the industry will be decided in the battle of economics. So far, those economics have been tough on the coal industry—natural gas is cheaper—and will likely continue to be. The use of coal for power generation has declined from 48 percent in 2008 to 33 percent in 2015, while that of natural gas has risen from 21 percent to 33 percent over the same period. This change has been the single most important factor in the fact that US emissions in 2014 (the latest year for which data from the EPA are available) was 9 percent less than in 2005, even though the US economy grew 13.2 percent, in real terms, over that period.
In a sense, then, it could be argued that the development of fossil fuels, in the form of shale gas, has been an asset to climate-change efforts. Many will bristle at that characterization, and argue that more could and should have been done in different ways. Be that as it may, it is likelier that President Trump’s policies in this regard are going to look a lot more like President Obama’s than of those committed to the idea that when it comes to oil, gas, and coal, the only ethical option is to “keep it in the ground.”
There is little doubt that President-elect Trump’s energy and climate policies will be different than those of his Democratic rivals. Indeed, that may be one reason he was elected. But they might not be as different as many of his opponents fear—or that many of supporters might wish.
