United States President Donald Trump substantially reversed the previous administration’s energy and climate policy. He is withdrawing the country from the Paris Agreement again, suspending offshore wind power leases and launching a review of existing permits. The federal government is set to abolish incentives for electric vehicles. At the same time, it is tasked with expediting investments in the production of oil and gas.
On his first day in office, US President Donald Trump abolished dozens of acts and regulations including many in the energy and climate realm. Moreover, he signed a string of executive orders and declared a national energy emergency, aiming to strengthen the fossil fuel industry, in line with his campaign promises and inauguration address.
The new administration in Washington is withdrawing immediately from the Paris Agreement and any other deal under the United Nations Framework Convention on Climate Change (UNFCCC). Of note, Trump exited it in his first term, too. Additionally, he now revoked and rescinded the US International Climate Finance Plan, worth USD 10 billion per year.
Virtually all countries and territories in the world have signed the Paris climate accord. Iran and war-torn Libya and Yemen are the only ones that haven’t ratified it yet.
Trump sees US as model for other countries to balance economic growth with environment
The United States must grow its economy and maintain jobs for its citizens while playing a leadership role in global efforts to protect the environment, Trump said.
“Over decades, with the help of sensible policies that do not encumber private sector activity, the United States has simultaneously grown its economy, raised worker wages, increased energy production, reduced air and water pollution, and reduced greenhouse gas emissions,” the executive order reads.
According to Trump, the US track record of advancing both economic and environmental objectives should be a model for other countries.
“In recent years, the United States has purported to join international agreements and initiatives that do not reflect our country’s values or our contributions to the pursuit of economic and environmental objectives. Moreover, these agreements steer American taxpayer dollars to countries that do not require, or merit, financial assistance in the interests of the American people,” he pointed out in the document.
U-turn in offshore wind
Under a new slogan, Make America Affordable and Energy Dominant Again, Trump also suspended administrative work on any offshore wind power leasing plans! He ordered to comprehensively review even the existing permits, citing economic and environmental issues.
In the decree, the president highlighted the importance of marine life and fisheries and the impacts on ocean currents and wind patterns.
Trump: We’re not going to do the wind thing
“We have more oil and gas than any country in the world, and we’re going to use it. We’re not going to do the wind thing. Big, ugly windmills, they ruin your neighborhood. If you have a house that’s near a windmill, guess what? Your house is worth less than half,” Trump stated.
Explaining the move, he claimed offshore wind turbines produce the most expensive energy by far. “And they’re all made in China, by the way, practically all of them. And they kill your birds, and they ruin your beautiful landscapes. But other than that, I think they’re quite good, right?” Trump stressed in contrast.
If the about-face in the offshore wind segment is sustained, it could hurt US and European wind turbine manufacturers more than it would their Chinese competitors.
National emergency: unleashing American energy
The national energy emergency allows the federal authorities to issue special approvals for investments. The decrees for the fossil fuel sector are meant to encourage energy infrastructure projects. Notably, the legislation doesn’t include photovoltaics, wind power and battery storage.
In the executive order Unleashing American Energy, Trump urged the government to remove undue burdens on oil, natural gas, coal, hydropower, biofuel, critical and rare earth minerals and nuclear energy.
The regulations cut and new acts are unblocking exploration initiatives offshore and in Alaska and the Arctic. At his inauguration, the president said: “We will drill, baby, drill.”
Furthermore, Trump ended a moratorium on approvals of liquefied natural gas (LNG) export projects.
Up to market now to sort out EVs, green energy
Federal authorities are removing support for the electric vehicle industry and leaving it to the market, similar to some measures for green energy. It is Trump’s help to the manufacturers of conventional cars. He scrapped the rules that were supposed to lift the share of electric vehicle purchases to 50% by 2030.
The government is looking to eliminate “unfair subsidies” and other measures limiting the sale of gasoline cars. The goal is to “promote true consumer choice.”
Trump has tasked agencies with ending unfair electric vehicle subsidies to “promote true consumer choice”
Additionally, the US is now thinning decarbonization funds and green taxes, mostly stipulated under the Inflation Reduction Act of 2022. For example, subsidies for electric vehicle infrastructure are on pause.
Individual states like New York, California and Washington will still be able to keep pushing for decarbonization up to a point. However, with the major policy change on the federal level, climate expenditure could impact their competitiveness against others.
For instance, Trump ordered all agencies and departments to reduce living costs for the population, including car prices. Among the measures is to scrap climate policies that increase the expenses.
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