On November 5, 2024, millions of Americans will head to the ballots, casting votes for the presidency, 468 congressional seats, and 11 governorships. Energy and environmental policy are at the forefront of the election cycle, with climate change being a key issue for both voters and candidates.
President Biden and former President Trump bring sharply different views on environmental regulation, American energy policy, and the global energy transition. Still, the potential impact of either administration's policies on the sustainability landscape remains uncertain.
Jefferies’ Sustainability and Transition Team recently traveled to Washington, DC to discuss the 2024 election cycle with policymakers, sustainability leaders, and investors. Though uncertainty abounds in Washington — both about the outcome of the elections and their influence on the energy transition — a look at recent presidential transitions may offer clues into how these shifts influence issues like climate, energy transition, and human capital.
This summary distills our findings from the Obama/Trump and Trump/Biden presidential transitions in 2016 and 2020, respectively. For a more detailed analysis, including the impact of recent presidential transitions on trade and immigration policy, read the team’s full report.
Obama to Trump: Energy and Environmental Policy
During his first term, President Trump reversed over 100 EPA rules covering air pollution and emissions, drilling and extraction, clean infrastructure, and toxic substances and safety standards. While not inherently against renewable energy, his policies favored fossil fuel production.
Key policies included:
- Replacing Obama's Clean Power Plan with the Affordable Clean Energy Plan to ease restrictions on greenhouse gas emissions from fossil fuel sources.
- Rescinding the 2015 Interior Department rule that lowered the risk of water contamination from oil and gas drilling.
- Easing EPA restrictions on toxic air pollution from oil refineries.
The real impact of these policies included:
- CO2 emissions per person were lower than those during the Obama administration on average (15.4t vs 17.2t).
- Annual clean energy capacity grew slower than the pace seen during the Obama administration on average (13% vs 19%).
- Oil production was higher than during the Obama administration (11 million vs. 7 million barrels per day), but oil/gas earnings were lower on average (0.7% vs. 1% of GDP).
- New onshore oil and gas leases were decreasing during the Obama administration but increased during the Trump administration until 2019.
- EPA budgets increased more during the Trump administration than the Obama administration, although there were some workforce cuts.
- Fossil fuel subsidies are lower compared to the Obama administration on average (0.05% vs. 0.07% of GDP).
Trump to Biden: Energy and Environmental Policy
Biden has shifted the direction of environmental policy, passing two infrastructure bills that invest hundreds of billions into developing clean energy until 2032. His administration overturned some of Trump's executive orders on deregulation and created more regulations, including Multi-Pollutant Emissions Standards. For oil and gas policies, the administration raised royalty rates for the first time in 100 years to end bargain-basement fees and increased the amount of bonds for drilling by tenfold.
The real impact of these policies includes:
- CO2 emissions per person were lower compared to the Trump administration on average (15.4t vs 14.9t).
- Annual clean energy capacity grew at a similar rate compared to the Trump administration on average (13% for both).
- Oil production and oil and gas industry revenue were higher than the Trump administration, reaching their highest levels since the beginning of the Trump administration.
- New onshore oil and gas leases fell below the levels seen during both the Obama and Trump administration.
- EPA funding and workforce continued to increase from levels seen during the Trump administration.
- Fossil fuel subsidies are slightly higher compared to the Trump administration on average (0.053% vs. 0.05% of GDP).
The impact of the 2024 presidential election remains uncertain. If former President Trump wins the election, and we experience another transition, his ability to pass significant energy and climate policies will heavily depend on the outcomes of the Senate and House races. Recent presidents have been more successful in passing major legislation during periods of unified government rather than divided government.
Jefferies’ Sustainability and Transition Team will continue to closely track political and legislative developments influencing the global energy transition. Follow our team for regular insights on the presidential election and more.
