The US presidential election is over. I know many of you are waiting for my initial comments on what this means for cleantech. Donald Trump’s candidacy has been so devoid of specific policy proposals, he has flip-flopped so many times on a large variety of issues, and he has so little (er … no) experience in government, that this question is more up in the air than not. Nonetheless, I will present several documented facts, some probabilities, and some pure speculation in the article below.
Notably, many leaders in the Republican Party have been hugely opposed to Trump’s presidency, so we have to wait to see where moderate Republicans draw a line in the sand and whether they let the most extremist wing of the Republican Party drive us more toward a polluter state. The bad news is, the extremist wing of the party has long been in charge of the overall party leadership’s stance on global warming and energy matters. So, unless something changes, sensible Republican leaders who want clean energy jobs, climate action, clean air & water, and less American suffering and premature death will continue to fall in line and vote for fossil fuels and against cleantech.
To start with, I think it’s worth highlighting that one of the most common characterizations used to describe Donald Trump is “con man.” As just one of many examples of that, Trump will be sitting before a jury later this month to defend himself against allegations that “students” of “Trump University” were conned and deserve their money back.
This is potentially relevant because, as I wrote on Monday, Trump’s economic and tax plans haven’t stood up well to independent evaluation. His plans involve massively cutting taxes on the super rich — and there’s basically no way to make up for that in reduced spending. It’s been found that his plans would add $5.3 trillion to the national debt.
But if he does carry through with those tax cuts for millionaires and billionaires, you can be sure that he will be cutting spending — a lot of spending.
If the United States of America was indeed conned, the economy is likely to crash (for a variety of reasons), and if the economy crashes, that means less cleantech investment and development … but also less energy use, which is a slim silver lining in the whole thing.
Given the fact that solar and wind are by and large the cheapest options for new electricity generation capacity, they may do well enough, but there’s still going to be less money getting invested into new energy projects in general and an almost guaranteed slower replacement of existing, dirty power plants.
It’s a similar story for electric vehicles, which are becoming cost-competitive but aren’t quite as far along as clean energy (I would say only Tesla cars are competitive when it comes to upfront cost vs competitors … unless consumers properly value the consumer and/or societal benefits of EVs). I remain convinced that the two biggest barriers to much quicker EV adoption are simply lack of consumer awareness and experience. The next barrier would be lack of production capacity and the time it takes to build up that capacity.
So, it’ll be interesting to see if EV sales can keep growing even if the economy collapses. Overall, though, if the economy collapses, putting a big dent in new car purchases would probably disproportionately hit the EV market.
I’ll come back to each of those specific markets in more detail further down — those are just some rough guesses about how those markets will respond if the economy tanks.
Back to the economy for a moment, it is a complicated beast, but the fact is that the Obama administration pulled us out of a dramatic economic recession that was caused by a deregulated financial industry, poor regulation of the mortgage industry, and a growing wealth gap between the super rich and the rest of the country. So far, every indication is that Trump and a Republican Congress will deregulate again, deregulate further, further cut taxes on the rich, and not invest in large infrastructure projects or emerging sectors of the economy — aside from building a wall between the US and Mexico, which Mexico will pay for. 😉
Bringing manufacturing back to the US is something Obama has helped to do in bits and pieces quite well, but we live in a globalized economy and there is no quick or clear fix to bring the USA to its former manufacturing leadership — at least, none that Republicans seem interested in supporting. Furthermore, a weak economy will again weaken demand for US-produced products and hurt the manufacturing sector further.
Of course, Trump could do something completely different than he has proposed. He could decide to not cut taxes on the super rich. He could decide to invest in the country rather than leave more money in the bank accounts of billionaires like himself. He could focus on continuing the economic stimulus Obama supported and a Republican Congress all but stopped. He has talked about investing in our infrastructure, after all. Who ever knows with Trump? But that would certainly be something completely different from what his campaign proposed.
Unfortunately, Donald Trump has a long history of hating on wind turbines and trying to get governments to outlaw or reject offshore wind energy projects. He has pushed the false idea that they cause “wind turbine syndrome.”
Wind energy is our cheapest of electricity generation, and our cleanest source of electricity generation. It helps the US economy, US public health, and US families.
How deep is Donald’s hate for wind energy, and how far will he go as president to oppose it?
On the plus side, wind energy is sort of a big deal in several conservative states. It has bipartisan support among voters, of course, and disproportionately benefits the white, male, rural, working class demographic that is most responsible for electing Trump. It would be odd of Trump to heavily oppose wind energy — but Donald has done many odd things that pretty much no one expected. He could conceivably set up big barriers to wind energy projects, for example.
Frankly, we don’t know at this point if he will try to harm the industry or will just leave it alone. However, his campaign website makes it clear enough that he won’t be promoting wind energy or helping it take over the electricity market more quickly. And there’s also indication that he will put his hand on the scales to favor natural gas. It’s widely expected that his energy secretary will be an oil & gas magnate who has had a lot of success in the natural gas industry — Harold Hamm. Trump talks about him like he’s a good friend. Cronyism in support of polluting fossil fuels? Well, his campaign slogan did focus on bringing us backward (“again”).
I would say that solar energy is in a more opaque situation. Donald hasn’t spent years hating on solar energy, and if anyone in the energy industry who isn’t >50% corrupt explains to him that this has been the fastest-growing sector of the US job market at points in the past several years, and that solar is actually a lot cheaper than Donald thought, perhaps he will join the ~90% of the population that supports solar energy and even government support for solar energy.
Solar energy is a winning bipartisan topic for several reasons. While I don’t agree with many things Donald has said, done, or proposed, I think he genuinely wants to make the USA a better country and wants to create jobs around the country. If he can get one half-decent person to head up energy issues (or sit somewhere near the top), perhaps solar will continue to get support.
Like wind energy tax credits, luckily, solar energy tax credits have been extending for the next few years. The industry seems quite prepared to even let them fade away after that — despite fossil fuels getting hugely more financial subsidy over time. With solar energy costs falling so much, utility-scale solar energy is increasingly able to outprice every other option for new electricity capacity (but still loses a bit to wind and, presumably, natural gas — if you don’t take health costs and other pollution costs into account, which a Republican-led industry won’t). Rooftop solar is increasingly competitive with retail electricity and should continue growing strong as well.
However, it seems highly unlikely that useful Obama initiatives to bring down the costs of solar and get more deployed — such as the SunShot Initiative and the streamlining of renewable energy development on federal lands — will be retained.
Again, the most likely thing Trump will do on the electricity front is provide subsidies and support for natural gas, and cut back on regulations.
Clean Power Plan
Unfortunately, Obama’s Clean Power Plan is likely to be on the chopping block.
Cutting the Clean Power Plan will mean more cancer, more heart disease, more asthma, and more premature deaths due to pollution from old and extremely dirty power plants that aren’t forced to clean up their act.
Coal power plants will surely continue to shut down and the energy source will continue losing market share, but this transition away from the dirtiest form of electricity will not happen as quickly as it would have with the Clean Power Plan in place.
I think it’s worth reminding people here that Trump apparently thinks the regulations against asbestos came about due to the mafia and that it is harmless — despite the evidence that it definitely is not. His take on regulations in general doesn’t seem to be very positive, so cutting federal regulations that protect the public against the dirtiest coal and natural gas power plants aren’t likely to hold up well with Trump in the presidency and the GOP in control of both houses of Congress.
The Environmental Protection Agency
If Trump is to be believed, he’s actually for eliminating the Environmental Protection Agency entirely (if you assume that’s the agency he was referring to when he said the “Department of Environmental”).
If he and a GOP Congress proceed in any fashion with such a proposal, old and new natural gas and even coal power plants could theoretically get a bit of a boost, even further slowing the transition to 100% renewables.
Again, though, it’s hard to know which Trump statements on the campaign trail were legitimate and which were just efforts to rile up the Republican base and, in that case, win the primaries. His personal relationships, unfortunately, indicate he’s going to heavily deregulate the pollution industry and sacrifice public health.
Electric vehicles seem the least likely to be hurt by a Trump presidency and there’s even a slim chance they could get a boost.
On the positive front, Donald has been very opposed to foreign oil and oil wars. If he provides any disruptions in the global oil market, that could potentially result in higher oil prices. It could also create problems for imported oil, but I don’t think that is extremely likely.
Of course, given his rabid anti-Muslim focus during the election season, if there’s enough controversy with Muslim nations which are also top oil importers to the US, things could get crazy. And “getting crazy” in the oil market could well add enough volatility to drive faster EV adoption.
Of course, it could also mean that these nations dump oil onto the market even further to hurt US companies — but I think that’s unlikely for a variety of reasons.
Of course, the US has a $7,500 federal tax credit for EV purchases. Who knows if Trump would see this as something to support to help achieve energy independence or if he would look to eliminate it in order to help fund those massive tax cuts for the super rich?
Aside from all of the above, Tesla is the brand to beat. Tesla vehicles are vehicles of desire. The Tesla Model 3 reservations that came in within only 3 days absolutely humiliated sales of any other product on opening weekend (see Michael Liebreich’s chart above).
Furthermore, automakers from the US, Europe, and China are increasingly being forced into the EV transition by the competition and by European and Chinese regulations and incentives. Weaker fuel efficiency requirements from the federal government (if Trump weakens or eliminates them) could slow the transition — but it seems like automakers at this point must realize that they will lose out no matter what if they are slowest to transition to EVs.
This is definitely one of the more concerning aspects of a Trump presidency, in my humble opinion, and part of that is because of the potential global effect. Trump has not only said he would pull the United States out of a 193-country agreement to cut global warming emissions — he has also called global warming a hoax created by the Chinese.
We are yet to see if Donald’s election will lead to other top nations backsliding on their commitments or enthusiasm. We are yet to see if they’re plans are less robust due to lack of support from the US. We are yet to see if international negotiations stop moving forward without the US playing a proactive or at least cooperative role.
We are also yet to see if Donald actually does pull the US out of the agreement. I would say that’s unlikely — due to the dramatic harm it will do to the USA’s standing worldwide. However, I wouldn’t put it past him.
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