The outcome of the United States presidential election will have a massive impact on the US government’s response to the climate crisis, with far-reaching consequences globally for the environment, human health, and the economy.
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A Harris-Walz administration would expand on the Biden-Harris record of addressing the climate crisis and promoting social justice.
“Drill, baby, drill” would be the core of a Trump-Vance energy policy, combined with an “America first” approach that – again – sees the US withdrawing from multilateral cooperation to mitigate the global climate crisis.
While the impact of the climate crisis mounts no matter who wins the White House, there will be different winners and losers from an investment perspective depending on the outcome.
Given the razor’s edge nature of the race, businesses and investors should prepare now for either eventuality.
Trump 1.0: Financial return over environmental protection
Studying the Trump-Pence environmental track record portends what will come from Trump-Vance.
Trump’s first term weighted limiting US federal engagement. Most famously, he withdrew from the Paris Climate Agreement and repealed the Clean Power Plan, which had allowed US states to set their own emissions standards.
The administration reduced the Environmental Protection Agency’s (EPA) authority and funding, and installed leadership at EPA with stated hostility to climate action, all of which led to a decreasing ability for oversight over the environmental impact of industrial expansion.
His administration weighted corporate interests and short-term financial returns over environmental protection and climate action, rolling back numerous regulatory actions, including ambitious fuel efficiency standards for vehicles.
The Trump administration also opened-up previously protected areas for oil and gas drilling, including national monuments and wildlife refuges.
Trump 2.0: Repeat and rollback
If re-elected, Trump would revert to this playbook, implementing the principle of development of fossil fuels over renewable energy sources such as solar and wind.
He would also work to reverse the many laws and regulations issued during the Biden-Harris administration.
Expedited approval for pipelines and infrastructure projects – a goal of his – would lead to business opportunities in those sectors, regardless of the impact of increased drilling on ecosystems and wildlife habitats.
Funding would shift towards traditional energy company technologies, such as carbon capture and storage and other fossil fuel-based research and development, rather than renewable energy innovation.
The reversal or modification of the Biden Administration’s electric vehicle policies and incentives would slow the transition to sustainable transportation. The rollback of other environmental regulations would continue, including climate disclosures.
A Trump 2.0 administration could hinder if not eliminate certain climate-related provisions in the Inflation Reduction Act (IRA), including tax credits for clean energy projects, grants for climate resilience and adaptation efforts, and incentives for sustainable agriculture practices.
Furthermore, the recent overturning of “Chevron deference” – a legal precedent that previously deferred to federal agencies’ interpretations of environmental laws – would result in more, and more successful, legal challenges to climate regulations, potentially creating a more unpredictable and restrictive environment for climate policy implementation.
Biden-Harris – Sustainability through carrots and sticks
The Biden-Harris administration has produced the most ambitious programme in American history to facilitate and invest in the energy transition. Its broad-based approach has focused on advancing clean energy including the promotion of employment in a new energy economy, as well as environmental justice.
The IRA produced unprecedented financial investments and incentives to accelerate a shift to electrification through battery manufacturing, hydrogen production, solar, and wind energy. As an example, the allocation of US$20 billion from the Greenhouse Gas Reduction Fund for renewables projects demonstrates a commitment to supporting the energy transition.
Beyond US borders, in addition to the active role the current administration has played in advancing global cooperation through COPs and other fora, the Indo-Pacific Economic Framework (IPEF), a 14-member initiative launched by President Biden, brought together the Asia Pacific region to promote cooperation on clean energy and decarbonisation and support the development of clean tech and infrastructure in partner countries.
Through IPEF, the US develops and implements policies and practices to promote a regional transition to a clean energy economy, including the development of renewable energy sources, energy efficiency measures, and electric vehicle adoption.
Candidate Trump vowed to end US participation in IPEF should he be re-elected.
Harris-Walz = Biden-Harris +
An American presidency under Kamala-Harris would continue and expand the Biden-Harris administration’s commitment to addressing the climate crisis and promoting social justice, both at home and abroad, such as staying engaged in the COP, where new nationally determined contributions (NDCs) – that is, how individual countries do their bit to cut emissions – will be determined next fall in Brazil.
For sure, a Harris-Walz Administration would build on the climate achievements of the Biden-Harris administration, likely strengthening Paris Agreement commitments and enacting more ambitious emissions reduction targets.
Her administration would advocate for increasing investment in clean energy, green infrastructure, and sustainable technologies while promoting environmental justice and equity.
This approach would involve developing a national climate resilience plan to protect vulnerable communities from the effects of climate change and investing in efforts that would generate clean energy jobs.
Supporting climate change research, development, and innovation would also be a key aspect of Harris’ environmental policy, ensuring that the US stays ahead of the curve in addressing the climate crisis.
One of the biggest differences between the two candidates is that a President Harris would keep the US engaged globally on many fronts.
With COP30 being a critical milestone where new NDCs are due, sustained US engagement would be crucial in driving global ambition and ensuring a coordinated response to the climate crisis.
US and China cooperating on climate has been a key variable in addressing the climate crisis globally, and more likely to be present in a Harris administration than a Trump sequel.
Mother Nature does not care who wins the election
To the planet, it does not matter if the sitting vice president or the former president wins.
The climate crisis will worsen regardless, with devastating consequences for the environment, human rights and global stability.
We will witness more frequent and severe extreme weather events, rising sea levels, economic disruption, and melting of polar ice caps and glaciers no matter who wins the election in November.
Governments and citizens globally will continue demanding climate action and sustainability from businesses and investors whoever is sitting in the White House, and the generation of business leaders in position now will continue to see the value of innovation and resilience that climate action can deliver.
Businesses incorporating technological advancements such as converting their operations and energy consumption to renewable energy sources and clean technologies will be financially rewarded.
Boards will continue to consider whether the companies they oversee are creating and delivering strategies to address their business’ climate impact.
And they will need to undertake scenario planning to show how they will adapt to a warming planet.
While we all watch the US election closely from a sustainability perspective, businesses and investors need to act now to prepare for the financial impacts the climate crisis will inevitably bring.
Aron Cramer is president and CEO of BSR, a sustainable business network and consultancy, and Steven Okun is CEO of APAC Advisors (Singapore) and a senior advisor to BSR.
