Last week, a Reckless cluster of executive orders on climate and energyPresident Trump has put himself on a collision course with the Constitution, Congress, the rest of the international community, future generations, the economic health of the nation, middle-class taxpayers, and even life on Earth.
Trump considered it a good day's work. He staked not only the power of the president, but also the command of the American oil cartel—the companies, shareholders, banks, and other investors that make up the country's fossil fuel sector.
Under normal circumstances, Trump's influence would be limited simply because another president would replace him in four years. But climate change is accelerating rapidly towards the point where it becomes catastrophic and irreversible On a planetary scale. The international community must stay on a fast track to decarbonize by 2050 To avoid that outcome. That's 25 years for a more ambitious energy transition than what has taken the past 50-100 years.
Nevertheless, Trump has used executive orders to 370 billion dollars Congress appropriated money in 2022 for clean energy investments under the Inflation Reduction Act (IRA). However, the Constitution puts Congress in charge of the federal purse strings. The president's job is to control the decisions of Congress. Trump's water storage order joins several other decisions challenging Congress to uphold separation of powers.
regarding his decision Exiting the Paris Climate AgreementTrump can no longer Claim That climate change is a hoax. Americans can see it in such disasters even if they haven't experienced it firsthand Lahaina and Los Angeles Fire? High country flooding in Asheville, North Carolina
It's not a short-term trend. In the 1980s, the United States suffered an average of 3.3 megadisasters each year. From 2014 to 2023 The average was 17. 9 of 10 Worst Disaster Years in America and All 10 Recorded the hottest year on earth It happened in the last 10 years.
like the world Climate change largest producer of fossil fuelsthe United States is No. 1 in global energy on climate change. Former President Joe Biden's Inflation Reduction Act was intended to help change that. But Trump's agenda is to solidify that title.
It's an international conflict, but what will Trump do? Active support for fossil fuels Will it impact US taxpayers and the economy? Consider what economists call “stranded assets.”
America's oil and gas infrastructure was almost worth $74 million in 2023. Analysts predict it will experience 'robust growth' Almost $110 billion in 2029. Fossil fuel bulls expect the sector to build new infrastructure and update existing assets to meet the country's growing electricity needs for data centers and new manufacturing facilities.
However, these assets and investments can become worthless.
For example, the average age of an oil refinery is about 40 years, but many last a long time. The average lifespan of an oil or gas pipeline is also 40 years. paris agreement We want the world to decarbonize within 25 years In order to keep global warming below 2 degrees Celsius, a “critical threshold for cascading effects in the dangers of human-generated climate change” occurs. Last year, Wood Mackenzie announced that by 2030 20 percent Global oil refining capacity is at risk of shutting down due to reduced demand for oil, carbon pricing, and other factors.
Offered by 60 of the world's largest banks, ignoring the risk of stranded assets $7 trillion to finance fossil fuels Since the country signed the Paris Agreement. it contains Over $700 billion Last year, nearly a third came from U.S.-based banks.
After Joe Biden took office in 2021 and set aggressive decarbonization goals, almost 140 banks from 44 countries Join the Net Zero Banking Alliance to “align lending, investment, and capital markets activities to Net-Zero Gellhouse Gas emissions by 2050.” With Trump now in charge, some of the biggest banks have fell off, Includes Goldman Sachs, Wells Fargo, Citigroup, Bank of America, Morgan Stanley, and JPMorgan Chase.
This is part of a wider Pushback for “woke” Concerns about the climate. While many pension funds and investment managers have moved away from fossil fuels in recent years, Republican-led states punish themalleges that the fund manager is in breach of its fiduciary duties to its customers. However, fiduciary duties include avoiding unwise investment risks.
Under Biden, the Securities and Exchange Commission required publicly traded companies to disclose climate risks. Potential shareholders should have the right to demand transparency. But Trump is new SEC Chairman plans to scrap that rule.
Many middle-class voters who supported Trump will feel the pinch of his fossil fetish with rising insurance premiums and falling disposable income.. rhodium group Trump's stated policies would “raise average annual household energy costs by $489 per year in 2035, increase reliance on oil and gas, and increase greenhouse gas emission levels by 24% to 36% compared to current policies.” It warns that the level of private investment could rise by 36% by 2035.
That last category, private investment, is most at risk. the study natural climate change Almost three years ago, private investors in rich countries warned that there was “more exposure to stranded (fossil energy) assets than the literature suggests.” The authors predict that oil and gas companies listed on the stock market will lose $1 trillion if the world decarbonizes by 2050. Investment funds, including pensions, will suffer the most significant losses.
Trump’s policies put taxpayers at risk as wealthy interests lobby for government bailouts when fossil fuel investments lose money due to decarbonization. Authors of the Natural Climate Change study note that the richest 10% of U.S. households hold 82% of potentially stranded assets. “Oil and gas investment decisions may be pricing potential relief,” the authors note.
The longer the infrastructure investment, the greater the liability. write in journal environmental research environmenta team of British economists found that $560 trillion of physical, environmental and human capital (jobs) is at risk if the international community waits to stop investing in carbon-based energy until 2030. We estimate that.
Even if the country revolutionizes the Paris Agreement, other powerful forces, including the market, are against fossil fuels. As the world electrifies, inexhaustible energy from carbon-free sources like sunlight and wind already cheap than oil, gas and coal.
The industry believes emerging carbon capture technologies will allow fossil fuels to join the clean energy club. However, these technologies are not ready for commercialization. When they are ready, they will significantly increase the cost of fossil fuels and increase market penalties for fuels.
And as climate disasters accelerate and become more destructive, politics turns against fossil fuels. Today's disaster is just a taste of what's to come unless the world decarbonizes. Human suffering, unaffordable costs, and pressure on government spending will drive sentiment away from traditional energies.
In short, investors today should shift their money from fossil fuels to carbon-free energy. Goldman Sachs has a 75 trillion dollars “An opportunity to invest on the path to net zero.” This path leads to reliable profits, secure pension funds, shareholder compensation, and a society that avoids the most tragic imitation disaster of fossil fuel consumption.
The good news is that the world is investing nearly twice as much in clean energy as in fossil fuels. In the United States in 2023, Clean energy jobs grew at twice the rate of people in the overall economy. That's where the sun is rising, that's where we should create the future we want and direct the smart money.
William S. Becker He is a former regional director for the U.S. Department of Energy and the author of several books on climate change and national disaster policy.100-day action plan to save the planet” and “The Stream Will Rise: People Living with Floods. ”
