Four cleaner years?
The contrast between Biden’s approach to the environment and that of the current US administration could not be more stark.
Under President Donald Trump, the government dismantled almost 100 environmental laws – in areas such as clean air, water quality and l and 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
For all the excitement, turning Biden’s green vision into reality will not be easy. A Democrat administration will have a powerful foe in the shape of hostile Senate.
Still, Biden has plenty of other options – not least presidential executive orders.
These, we believe, will form a key part of his climate change agenda.
Indeed, investors should expect a flurry of executive orders in the first 100 days of the new presidency. 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.
Investors should expect a flurry of executive orders in the first 100 days of the new presidency. With a stroke of his pen, Biden will take the country back into the Paris Accord.
But there are reasons to believe Biden could achieve even more.
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 that figure. It’s a bold commitment but also one that should resonate powerfully in a post-pandemic economy.