A decisive win for the Democratic Party in the U.S. is a near-term catalyst for the renewable energy sector. The scenario for a Joe Biden win would speed up a push away from fossil fuels towards renewable energy.
The assessment is based on the energy sector Manifestoes of the two key political parties, coupled with the promises made by the two candidates while on the campaign trail.
Democrat’s aggressive energy plans are expected to alter consumer behavior without adding to consumer’s direct electricity and car costs, if implemented today. There would not be any additional cost because both the cost of producing “green” electricity and electric vehicles (EVs) is declining. The plan is also expected to create an estimated 10 million jobs across the United States.
With less than a month to see the U.S. go to the poll, CNN poll suggest that President Donald Trump has hit a new low, trailing former Vice President Joe Biden by his largest margin of 16 points conducted in the entire 2020 election cycle. Joe Biden’s lead in the recent CNN poll is the best of any challenger since 1936, when the first scientific poll was conducted in a Presidential election.
Joe Biden has proposed a staggering US$1.7 trillion in federal spending over the next decade to boost renewable energy production, leveraging additional private sector and state and local investments to total more than US$5 trillion. The US$1.7 trillion climate plan is geared towards changing America after Trump’s Big Oil presidency.
Biden’s plan focuses on research and development (R&D) for clean energy, tax credits to fast track renewable power and electric vehicles. The restoration of the full EV tax credit, which is currently capped by manufacturers’ sales, and has already been cut for General Motors and Tesla, is to incentivize particularly middle class consumers and, to the greatest extent possible, to prioritize the purchase of made-in-America vehicles.
The boosted R&D will focus on technologies including large-scale battery power storage, and carbon capture and minimization, and modernizing infrastructure, including the country’s electricity grid and a nationwide network of public charging stations for EVs. The extension of existing tax credits for wind, solar, and battery storage is to encourage utilities and private power developers to build more solar and wind power plants, retire coal plants and replace with cleaner capacities, and to boost the acquisition of EVs.
In addition, Biden intends to repeal the generous tax bonanza offered U.S. fossil fuels by Donald Trump, in a bid to recover taxpayer costs. Biden’s plan to make an historic investment in U.S. clean energy future and environmental justice is expected to be paid for by reversing the excesses of the Trump tax cuts for corporations. He is also expected to reduce incentives for tax havens, evasion, and outsourcing, ensuring corporations pay their fair share, closing other loopholes in U.S. tax code, and ending subsidies for fossil fuels.
His win will see higher corporate tax rates for fossil producers, more challenging infrastructure permit requirements and restricting permissions to drill on federal lands. Biden’s term in office may see the Environmental Protection Agency (EPA) pushing for regulations that make fossil emissions from oil, coal, and gas more inconvenient and expensive in nature. Fossil fuel infrastructure such as pipelines and export facilities would also face greater obstacles.
The Democratic presidential hopeful’s fuel economy standard would force U.S. automobile manufacturers towards European standards for emissions. It is to establish an enforcement mechanism to achieve net-zero emissions no later than 2050, including a target no later than the end of Biden’s first term in 2025.
On the other hand, President Donald Trump’s policies hinges on the deregulation of utilities carbon emissions, expanding drilling for oil and gas on federal lands and offshore. Trump second term offers continuity, with some further easing of regulations on the oil, gas and coal industries.
Should Trump secure a win, the U.S. power sector is likely to continue along the path it has followed in his first, with massive support for coal. The President has not proposed a climate plan. He rejects the idea of using government policy to cut Greenhouse gas (GHG) emissions, and talks about energy in terms of prices and jobs. There would be a continuation of his attempt to ease fuel economy standards, and of the administration’s legal challenge to California’s autonomy to set its own more stringent rules. Trump’s election campaign has signaled the extension until 2032 the moratorium on drilling off the coasts of Florida, Georgia, the Carolinas and Virginia. The re-election of Trump therefore would likely have a limited impact on the global energy sector.
In contrast, Joe Biden administration’s policies of “clean energy revolution and climate justice” would likely accelerate the de-carbonization and electrification of energy – a completestructural shift in energy demand and investment, which may position the United States as the world’s clean-energy superpower.