Why Harris and Trump are a world apart on energy and climate

Kamala Harris and Donald Trump have starkly different visions on climate and energy that will influence how far and fast the US can transition from fossil fuels over the next four years.

Energy: how safe is the IRA?

Harris pledges to fully implement the Inflation Reduction Act (IRA), Biden’s signature climate law he signed in August 2022, and would veto any Republican legislative effort in the next Congress to undo all or parts of it.

If she can preserve the IRA, or most of it, this would underpin historic US clean energy investments over her term to expand supply and demand and achieve solid progress to establish a more robust manufacturing supply chain.

How far this progression could move the needle toward 2035 carbon-free electricity is debatable. Demand is forecast to surge beyond what renewables could additionally supply, which is leading some utilities to reconsider certain fossil plant closure timetables.

In 2023, wind and solar plus large hydro supplied 21.6% of total power generation, and minor sources such as geothermal brought this to about 22.1% Add 18.9% from nuclear, and emissions-free power reaches 40%. Attaining 100% is a monumental challenge Harris would need to address and to explain impacts on ordinary Americans to get there.

Harris sees more federal lands availability as a key puzzle piece for advancing development of wind, solar, and transmission, and pledges to improve permitting timelines and approvals processes.

Fiscal pressures could pose challenges for her climate ambitions given a soaring US national debt – now $35.7trn – and runaway federal deficits, which hit peacetime records under Biden.

Harris is proposing new federal programmes and would expand others, potentially adding trillions more in deficit spending. She is already under pressure from her party’s climate hawks to support another bill that would include costly federal initiatives that failed to make IRA.

IRA's 10-year price tag has soared from the original $369bn Biden estimate – the law includes major health care provisions - to at least $800bn alone for climate-related tax credits, which are not capped, according to the nonpartisan Congressional Budget Office.

Private estimates peg the ultimate IRA cost for taxpayers at between $1.2trn and $2.5trn, which includes funds for direct spending such as grants and investments, loans and loan guarantees, and tax credits.

Even in spendthrift Washington, those are big numbers and likely to draw attention from Republicans if they win control of Congress and a small number of fiscally moderate Democrats.

Harris must also factor in geopolitical considerations with clean energy. She has endorsed Biden’s erratic solar tariff policies that displeased every industry participant here at one time or another.

If elected, Harris would face growing trade tensions with China. A flood of cheap Chinese-branded solar components and materials have made some projects announced here since the IRA took effect economically inviable. More cancellations would hurt supply chain re-shoring efforts.

Chinese firms are also trying to set up EV assembly plants in Mexico, which threaten to grab market share from higher-cost US suppliers even though they benefit from IRA tax credits and a 100% tariff imposed by Biden.

Trump’s views on energy are well-known. He pledges to return the US to “energy dominance.” The key, he contends, is to make good on his campaign pledge to “drill, baby, drill,” referring to natural gas and oil, which he calls “liquid gold under our feet.”

He plans to greatly expand federal offshore and onshore fossil lease sales, and “blast through every bureaucratic hurdle” to facilitate approvals for drilling, pipelines, and refineries. He would quickly lift Biden restrictions on liquid natural gas export permits.

Trump’s enthusiasm for coal has diminished in recognition that utilities no longer view it as cost-competitive and environmentally acceptable for new power plants.

He continues to rail against wind, although it did equally well onshore during his term as under Biden. His impact there would be limited as most onshore activity occurs on privately-owned property and doubts that lawmakers would repeal tax credits.

Offshore wind is another matter as development takes place almost exclusively in federal waters. Still, enough projects have been approved to keep the industry busy with Trump in office. His administration would likely suspend lease sales and slow walk review processes.

With EVs, he asserts IRA tax credits are “lunacy.” Whether Tesla CEO Elon Musk, a key campaign financial contributor and Trump supporter, can dissuade him from trying to repeal them, or even intends to, is uncertain.

Tariffs are the biggest concern and 'X factor' with Trump for the entire energy sector. His enthusiasm for tariffs as a trade policy weapon, especially against China and to a lesser extent Europe, has prompted anxiety over potential future supply chain disruptions and higher inflation.

His proposal to impose 60% tariffs on imports from China would almost certainly invite retaliation from the number three US trading partner after Mexico and Canada, while 10% to 20% levies on all other imports could spark trade wars with friendly nations.

Whether Trump's tariff threats are a tactic to pressure countries to accede to US demands in future bilateral trade negotiations is unclear. For clean energy, timing of new trade disputes could not be worse with battery storage and solar heavily reliant on imported components and materials.

Climate policy: 'Existential crisis' or 'scam'

Harris sees climate change as an “existential crisis” and is committed to the US meeting its Paris Agreement pledge to reduce US greenhouse gas emissions by 50-52% from 2005 levels by 2030 and achieve net-zero by 2050.

Today, the US would fall short of that interim pledge. How Harris would get the country back on track as president isn’t clear.

Her reluctance to offer a detailed plan could be recognition that climate is not a pressing issue for most voters in this election cycle. Or she may be reluctant to tip her hand on potential next steps to await the political makeup in the next Congress which convenes in January.

Harris has embraced outgoing President Joe Biden's ambitious 2030 goals for clean electricity, electric vehicle transition, and offshore wind, but these are insufficient for Paris compliance and increasingly out of reach.

She would likely employ executive actions and cabinet agency rulemaking to advance federal policies, regulations, and standards that further cut emissions and accelerate clean energy adoption.

An aggressive top-down party-line strategy would carry political risks, particularly if Harris wins power with a narrow election mandate. Most Americans believe the federal government is already too involved in their daily lives and a new spate of regulatory activity could raise costs for them.

Executive orders and agency rules are vulnerable to legal challenge. Chances they could be delayed or overturned have increased where cases are presided by judges appointed by Trump or heard in the Supreme Court, which presently has a conservative majority.

Trump, in turn, questions existence of global warming, calling it a “hoax,” and “one of the greatest scams of all-time.”

He pledges to withdraw the US again from the Paris accord, claiming it has cost the country nearly $3trn in reduced economic output and three million manufacturing jobs. The US would remain party to the United Framework Convention on Climate Change, the underlying 1994 international treaty.

Trump wants to weaken federal environmental protections, particularly those that govern oil and gas activities and fossil power plant emissions, pledging to do away with a "minimum of 10 old regulations" for every new one.

He has been critical of IRA for helping finance what he calls the Biden-Harris administration’s “Green New Scam.”

He has recently toned down his threat to terminate the law on “day one” in office – which he could not do with executive action – after oil industry executives and Republican lawmakers voiced support for biofuel, carbon capture, critical mineral, manufacturing, and nuclear tax credits.

Trump will likely take aim at those for electric vehicles (EVs) and wind, both of which he disdains. Solar is a guessing game. He now claims to be a “big fan,” while complaining projects require too much land. What that could mean for any IRA reform is unclear.

He does intend to rescind all unspent IRA funding, and money available in the $1trn infrastructure law of 2021 and $280bn CHIPS and Science Act of 2022 that assists domestic research and production of semiconductors. Both had bipartisan support.

Trump would use funds clawed back to help pay for extension of 2017 tax cuts for individuals in his first term, a popular measure set to expire at the end of 2025. This will cost about $4trn.

To what extent Republicans would go along with Trump in any IRA repeal effort is an open question even if they gain control of Congress.