The emissions stakes of November’s election

It has been quite a week.

Joe Biden announced on Sunday that he would be dropping out of the presidential race, and promptly endorsed Vice President Kamala Harris to take his place — who has since surpassed enough delegates to secure the nomination. That decision came mere days after Donald Trump accepted his own party’s nomination, and capped off a summer of turmoil in both parties. 

Today, the country effectively has two options, for the presidency and for the federal climate policy that will result. As new research from the Rhodium Group makes clear, the November election will inevitably inform how many tons of greenhouse gases the country emits for decades to come.

The 2024 version of the research firm’s annual report on U.S. emissions and energy, out today, outlines multiple paths that U.S. emissions could take over the course of the next decade. And it puts some hard numbers on the impact that the Biden administration’s key policy victory, the Inflation Reduction Act, will have for long after he leaves office.

According to the report, which is the outlook’s tenth installment, the combination of state and federal policies that exist today will bring U.S. emissions down by between 32% and 43% by 2030, compared to 2005 numbers. That represents at least a doubling, if not a quadrupling, of the pace of emissions abatement from 2005 to 2023, the authors noted.

(The low-emissions scenario involves cheap clean energy and more expensive fossil fuels that drive investment to the sector; the high-emissions scenario involves more expensive clean energy and cheap fossil fuels, as well as elements like interconnection queue delays and supply chain constraints. The middle case splits the difference.) 

But even if the country manages to mirror the low emissions scenario, there is more to be done. To be on track for Paris Agreement emissions commitments, the U.S. would need to move even faster in its decarbonization to arrive at a 50-52% emissions reduction by the end of this decade.

And whether that is possible will depend upon how everything from policy to energy prices shape up in the meantime.  

The political winds

Former-President Trump has said he would reverse the IRA “on day one” of a potential second term, though doing so would require legislative cooperation. And his running mate J.D. Vance champions the oil industry and doubts that climate change is a threat at all.

Accordingly, Rhodium notes that a Republican-controlled White House would likely seek to roll back or diminish many of the regulations finalized during the Biden administration.

“If past is prologue, a Republican-controlled White House might take the opposite tack [from a potential Harris administration], declining to defend regulations finalized during the Biden administration, rolling them back where possible, and enacting weaker alternatives,” the authors noted.

Meanwhile, Rhodium said that electing a Democrat could mean further administrative action on emissions reductions — with the caveat that judicial uncertainty complicates matters. Harris in particular once sponsored the Green New Deal and as VP cast the tie-breaking vote to pass the IRA in 2022.

And it’s not just the presidential race where the emissions stakes are high. A unified House and Senate under Republicans could make the roll-back of the IRA much simpler for a potential Trump administration, undoing some of the policy progress that has set the country on its current path. (That said, as the Rhodium Group report said that the expiration of tax provisions in the Tax Cuts and Jobs Act is likely to mean some tax credit elements of the IRA are revisited, regardless of who leads each chamber.)

Beyond the IRA, the report also points to key EPA regulations, including greenhouse gas standards and emissions guidelines for new gas and existing coal plants, and the Advanced Clean Trucks regulation championed by California as key in shaping the U.S. emissions trajectory. Many of those policies and regulations, however, are at risk of repeal in light of recent Supreme Court decisions, the report noted.

Of course, policy isn’t the only driver of decarbonization, but it certainly informs where and how quickly things move.

“We expect that private actors will continue making investments in clean manufacturing and clean energy technology deployment to some degree, regardless of electoral or judicial outcomes,” the report authors wrote. “But we still expect the market to be highly responsive to policy drivers.”

The growth of power demand

The swell of power demand that has characterized 2023 and 2024 so far is adding another layer of complication to Rhodium’s projections. Today, data centers are dominating headlines about that growth, though the research projects that electrifying transport will dominate 46% of projected electricity demand by 2035. 

This increase represents a departure from the historical norm. According to the researchers, the growth in electricity demand has dropped steadily since the 1950s, when it averaged a whopping 9.3% per year. But since the start of the 2000s, its growth has been negligible, dropping to a low of 0.3% in the years since 2020.

Between 2024 and 2035, though, demand is expected to grow by between 1.5% and 2.3% per year.

The generation mix that is called upon to meet that demand will vary depending on factors like fossil fuel prices, clean energy costs, supply constraints, economic growth, and data center growth.

The major distinction between the scenarios is the rate of adoption of renewables versus the rate of setting aside fossil fuels. In a low-emissions scenario, for instance, natural gas would drop to just 8% of the resource mix by 2035, versus 35% in the high-emissions one.

Despite how far the sector still has to go, Rhodium’s data makes clear that the power sector is actually on track to decarbonize faster than sectors like transportation or industry — and much faster than buildings and agriculture, which are barely expected to budge in the next decade.

The researchers described power as a “nexus” of decarbonization, given the fast growth in demand in tandem with the embrace of cleaner generation. They attribute the decrease in emissions to both economic factors like the capital cost declines for renewables and batteries, and to the IRA subsidies that have become an election flashpoint.

Ultimately, the report finds, whether the paths it lays out are predictive at all will depend upon countless factors that remain opaque today. What is clear to the authors, though, is that “more policy action is needed for the U.S. to put itself on track for its 2030 commitment under the Paris Agreement and for deep decarbonization by mid-century.”

And those impacts could stretch beyond the U.S. itself, they added: “As the international climate community approaches the next round of nationally determined contributions due in 2025, a credible U.S. target will help set the tone for global ambition.”