Four cleaner years?
The contrast between Biden’s approach to the environment and that of the Donald Trump administration could not be more stark.
Under President Trump, the government dismantled almost 100 environmental laws – in areas such as clean air, water quality and land use - and relaxed regulation of the fossil fuel industry. It also cut off funds for climate research.
Biden’s plans would restore the US’s environmental credentials on several fronts.
He has pledged to decarbonise electricity generation by 2035 by transitioning to renewables.
This will involve, among other things, doubling the rate of solar panel rollout to reach a total of 500 million installed units in the next five years.
His plan also contains measures to phase out fuel-based cars in favour of electric vehicles (EVs).
In addition, Biden is committed to cleaning up the building sector – which the International Energy Agency estimates accounts for more than a third of both the world’s final energy consumption and carbon emissions. The programme will involve upgrading six million buildings to boost energy efficiency.
A Biden White House should also clear the way for some of the most progressive states like California to pursue their aggressive environmental agenda, putting an end to four years of legal battles between the Federal government and mostly Democratic states over issues such as car pollution.
Beyond climate change, the new administration will also tackle other pressing environmental issues, such as air, water and plastic pollution.
Green orders
With Democrats poised to control both houses of Congress as well as the White House – for the first time in a decade – investors should expect green policies to be the early focus of the Biden administration.
We think Biden will deploy executive orders in the first 100 days of the new presidency to push through his ambitious climate agenda. With a stroke of his pen, Biden will take the country back into the Paris Accord and add clean energy provisions to the pandemic economic stimulus package.
Expect the same weapon to be used to reverse President Trump’s loosening of environmental regulations and enact new laws requiring public companies to disclose climate change-related financial risks and greenhouse gas emissions.
With a stroke of his pen, Biden will take the country back into the Paris Accord.
There are reasons to believe that Biden will achieve even more, even though the Democrats face the challenges of a narrow congressional majority.
For one thing, Americans are not as hostile to climate action as some might think.
In a recent poll, 85 per cent of Republican voters aged 18 to 54 say said they were more likely to support a Republican candidate who embraces an innovation-based approach to climate.1
Then there’s the promise of jobs. The clean energy industry is already a major employer – some 3 million Americans work in the sector and Biden’s plans envisage adding another 10 million to that figure. It’s a bold commitment but also one that should resonate powerfully in a post-pandemic economy.
Next-generation infrastructure to support increased transmission of clean energy is also likely to be a key battleground.
China has the world’s longest and most powerful ultra high-voltage direct current (UHVDC) line stretching over 2,000 miles – more than the distance between London and Moscow – to deliver solar and wind power to 50 million households. Europe and the US are also planning to upgrade the grid with UHVDC lines.
The alignment of the US’s climate change policy will provide a massive shot in the arm for the global clean energy industry.
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