Amid the U.S. presidential election fervor, President Joe Biden’s landmark clean energy law, the Inflation Reduction Act (IRA), hangs in the balance. As the Energy Intelligence report highlights, the law, lauded for its hefty investments in clean energy technology, faces potential reversal should Biden lose the election to presumptive Republican nominee Donald Trump or primary challenger Nikki Haley.
Both Trump and Haley have pledged to terminate billions of dollars in clean energy tax incentives, labeling them as handouts and citing their hefty price tag as unsustainable. However, the road to dismantling the IRA is fraught with obstacles, and Trump’s promise to retract the U.S. from international climate commitments adds another layer of complexity.
While a potential Biden loss and GOP victory may slow the pace of the U.S. energy transition, analysts predict that market forces and global trends will continue to drive progress, albeit at a more moderate rate. Key areas of contention in the election cycle include:
Vulnerable EV Incentives
The $7,500 consumer electric vehicle (EV) tax credits under the IRA are deemed particularly susceptible to change. Even some Democrats have expressed reservations about the Biden administration’s EV deployment strategy, echoing concerns raised by Trump regarding the perceived negative impact on manufacturing industries.
Implications for Climate Diplomacy
The election outcome holds significant implications for U.S. climate diplomacy, with Biden aiming to strengthen ties after Trump’s withdrawal from the 2015 Paris climate accord. Trump’s campaign has hinted at a potential re-exit from the Paris climate deal commitments and a withdrawal from the United Nations Framework Convention on Climate Change.
Regulatory Rollbacks
A Trump administration could roll back several of Biden’s climate and energy mandates, including methane standards for oil and gas operations, climate utility rules for power plants, and tailpipe emissions regulations. Conversely, a second Biden term may see a bolstering of climate regulations.
Despite the uncertainties surrounding the election, the momentum toward clean energy transition persists, buoyed by bipartisan support for select clean energy initiatives and the unwavering commitment of states and global partners to climate action.
