Trump's return, a turn in climatic policies

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By TP


This week the presidential investiture of the second term of Donald Trump has taken place. An expected event after the results that gave the Republican victory. Although within his own inaugural discourse he advanced brushstrokes on the way to follow in the next four years and executive orders are published, the future of climate and environmental matters in the country is maintained in suspense. Drill, Baby, Drill. With this phrase, Trump anticipated that the extraction of hydrocarbons will be central to his second term, prioritizing the country's energy independence. Gone will be the restrictions on natural gas exports established during the Biden administration, while the deregulation process will be resumed, already initiated in its first mandate, to facilitate the extraction of hydrocarbons in federal areas, including national parks in Alaska. This is also given in a context in which, since 2019, the United States has become a net producer of energy by the revolution of the shale gas (fracking) extended throughout the country. The previous one is complemented by the inaugural announcement made by Trump that mandates will not continue that favor the transition to electric vehicles and the decarbonization of the transport sector, arguing that it reduces the options of choice of US consumers. This refers to a series of standards at the federal level, and California's decision to prohibit sale in the state of vehicles only of gasoline by 2035. The Trump President has additionally indicated his intention to cut the government spending, which directly affects On the inflation reduction act (IRA) of 2022, the greatest climatic investment in the history of the United States so far. This law is based on a series of subsidies, tax incentives and federal expenditure aimed at promoting the deployment of clean energy, the adoption of electric vehicles, as well as energy efficiency measures. However, the effect on employment creation from these measures has been especially positive in Republican states, so it is possible that the dismantling of anger is done selectively. If Trump well decided in his early hours as president the second Withdrawal from the Paris Agreement, there is possible that there are nuances not to give ground to a climate agenda in which China is increasingly positioned as a key player, especially in the supply of industries such as solar panels, batteries and electric vehicles. And there are still pending issues in the inkwell, such as the regulation of the social cost of carbon, key in the analysis of public policies. Only time will confirm what electoral promises will be carried out. Marco Lara and Laura Martínez, BBVA Research.