The Presidential debate between Vice President Harris and former President Trump underscored an already clear reality: climate change and energy policy are key differentiators between the candidates. Although there is no doubt that this election will have broad implications for energy and environmental policy, impacting fracking, electric vehicle production and everything in between, there is a momentum to decarbonize the economy that transcends who will be in office come January. As someone who has advised some of the largest organizations on large scale energy market transition for over 30 years, I remain optimistic about the clean energy transition regardless of the outcome of this election.
While every vote matters, make no mistake - the energy transition is already underway. Global scale renewable energy and greater energy efficiency will progress across sectors and geographical regions regardless of who sits in the Oval Office. Although the tone at the top may differ, momentum’s direction will continue.
I confidently say this because we have been here before. Since the 1800’s, the transition to new energy sources has occurred every forty years or so – from wood to coal to oil to natural gas. We are in the midst of the same kind of energy transition now. A few facts highlight this momentum:
Energy transitions – major shifts in fuel sources – occur because humanity’s innovation creates an insatiable hunger for energy that both demands and supplies the means to meet that need. Governments, despite interventions to hasten or hinder progress, simply respond to larger cultural and societal movements. Shifting energy policy positions we see across the political spectrum are mostly attempts to jump onto the currents generated by broader consensus and trends.
This is no more evident than in the United States, where a variety of states, whether they be Blue states, Red states, or Purple states, are embracing a renewable energy future. Look at the top 13 states that received more than half of their energy from renewable energy sources, and the list is hardly a harbinger for environmental activism: Idaho, Illinois, Iowa, Kansas, Minnesota, Montana, New Hampshire, Oregon, South Carolina, South Dakota, Tennessee, Vermont, and Washington.
Altogether, 29 states have renewable portfolio standard goals; 24 states plus the District of Columbia and Puerto Rico have goals to achieve 100% carbon free energy; and 12 states have announced future bans against the sale of gas-powered cars. Many of those actions were taken by Blue states in response to, not because of, a Trump Administration that tried to roll back federal climate regulation and action. During the Biden Administration, Red states have received substantial funds to invest in the clean energy economy, and do not want to see the Inflation Reduction Act repealed. In many ways, the seat of power when it comes to energy transition does not necessarily sit at the White House, but in the Governor mansions and state legislatures across the country.
Looking at the broader landscape, the Paris Climate Agreement in 2015 was a turning point for global adoption of decarbonization and energy transition. Virtually every country and sector are impacted and expected to adhere to higher decarbonization standards. If you are a company with operations outside of the U.S., it is in your commercial interest to pay attention to energy transition, climate risk, carbon emissions, and associated reporting requirements.
The impact among private companies is already being felt. About 95 percent of companies in the S&P 500 and nearly three-quarters of the Russell 1000 have a sustainability plan. These climate action plans are considered necessary for companies to maintain their “social license” – customer and investor approval. These same companies are facing new reporting requirements tied to climate risk and carbon inventories, as well as the progress against their stated sustainability goals. Tightening regulatory oversight on greenwashing and government focus on achieving their stated decarbonization goals is increasing the regulatory risk facing global corporations as well as the local firms that serve them.
The election outcome is only one factor that may control the pace, but not the direction, of energy supply in the future. For most of the next decade, federal government incentives are locked in through the Infrastructure Act and Inflation Reduction Act, and many states are supplementing federal incentives with state-based programs. Regulatory requirements are motivating U.S. companies to meet increasingly robust reporting standards. And businesses are working through ways to mitigate their regulatory risks through renewable energy, carbon reductions, and climate risk assessments.
Every vote matters on high stakes issues, so it is important that you exercise your powerful right this November. As the candidates work to express their energy and environmental positions, decarbonization and the energy transition is likely to continue.
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Tanya Bodell leads StoneTurn’s energy and sustainability and has over 25 years of experience in the energy industry, helping global businesses achieve net zero and new energy technologies. She advises energy companies, large energy users, and governments perform carbon inventories and develop realistic climate action plans, managing billion-dollar energy procurement processes.
