The contrasting agendas of U.S. presidential candidates Kamala Harris and Donald Trump would lead to divergent effects on renewable energy initiatives and decarbonization efforts, potentially reshaping U.S. energy policy with varying degrees of impact for federal and jurisdictional programs and initiatives.

Heading into the November 5 election, both candidates have relatively broad platforms regarding U.S. energy and climate policy and, in general, have not taken clear stances when it comes to specific regulations and initiatives.

However, despite a lack of specifics, there is certainly still insight to be gleaned from what both candidates have said, as well as the actions taken or initiated in their positions in prior presidential administrations.

It’s also important to remember that, regardless of who is in the White House, individual states retain significant authority to enact their own local policies.

Below, OPIS examines the possible implications of the election results on some key areas of U.S. energy and climate policy.

FEDERAL PROGRAMMING & TAX INCENTIVES: Harris has long been an advocate for climate change policies. Notably, she proposed a $10 trillion plan for the development of a carbon-neutral economy during her initial run for president in 2019.

If elected, a Harris Administration will likely continue with clean energy initiatives under the Infrastructure Investment and Jobs Act (IIJA) and the Inflation Reduction Act (IRA) while implementing additional decarbonization programs and regulatory efforts.

As her recent economic plan highlights, Harris vows “to invest in a thriving clean energy economy.”

Meanwhile, Trump’s campaign has championed U.S. “energy dominance” with the former President vowing in his acceptance speech at the Republican National Convention to redirect clean energy funding, and “…not allow it to be spent on Green New Scam ideas.”

A Trump Administration would have several options under executive authority to implement a new agenda, to include slowdowns of IIJA or IRA funding not already obligated, and revisions to rules under the U.S. Department of the Treasury (e.g., 45V, 45Y and Section 48E) and other federal regulations.

According to “Agenda 47” on his campaign website, Trump would “immediately stop all Joe Biden policies that distort energy markets, limit consumer choice, and drive-up costs on consumers, including insane wind subsidies, and DoE and EPA regulations that prevent Americans from buying incandescent lightbulbs, gas stoves, quality dishwashers and shower heads, and much more.”

During his presidency, Trump reduced grant and loan activity under the U.S. Department of Energy (DOE), revised regulations that supported decarbonization, and endorsed federal budgets that de-emphasized clean energy programming. His administration also established the Affordable Clean Energy Rule (ACE), replacing the previous administration’s Clean Power Plan.

However, an overhaul of the U.S. energy policy would greatly depend on the outcome of the congressional elections. A Republican Congress could potentially pass laws that amend the IIJA and the IRA. A Republican Congress would also have the ability to consider a future, annual appropriations law that would decrease fiscal year spending by federal agencies such as the Environmental Protection Agency (EPA).

In order to amend or reverse such policies, Republicans would need to maintain a majority in the House of Representatives and secure at least 50 votes in the Senate. Yet, efforts would still have to overcome any Democratic filibuster. To overcome the filibuster with only 50 votes, a budget reconciliation process would need to be used. Notably, the IRA itself passed as a budget reconciliation measure in 2022.

CARBON MARKETS: Regardless of the federal agenda, U.S. States will continue to advance their own energy and climate policies as they have authority under the law and under the Constitution. For instance, the Western Climate Initiative, which includes California and Quebec, will likely continue efforts such as linking their market with Washington’s Cap-and-Invest Program –barring the success of the upcoming Washington ballot initiative I-2117 which would repeal the program.

Maryland, New York, Pennsylvania, and Vermont are in various stages of carbon market consideration and will likely move forward with their decarbonization initiatives. It is possible that these States may work to fast-track any carbon market decisions should there be a Trump Administration in order to mitigate potential federal interference.

For example, in October 2019, the Trump Administration filed a civil complaint against California, the California Air Resources Board (CARB), several State officers, and the Western Climate Initiative (WCI) for “unlawfully” entering a cap-and-trade agreement with the Canadian Province of Quebec, citing that the U.S. Constitution prohibits states from entering treaties or compacts with foreign powers without the consent of Congress.

Key information on carbon market proposals for Maryland, New York, Pennsylvania, and Vermont include the following:

• In December 2023, the Maryland Department of the Environment released Maryland’s Climate Pollution Reduction Plan (CPRP) which provides a strategy to achieve the state’s near-term climate goals and guide the state to achieve its 2045 goal. The CPRP includes an economy-wide cap-and-invest program.
• The New York Cap-and-Invest Program (NYCI) was recommended by the New York State’s Climate Action Council’s Scoping Plan and proposed in Governor Kathy Hochul’s 2023 State of the State Address. The New York State Department of Environmental Conservation (DEC) and New York State Energy Research and Development Authority (NYSERDA) have now entered into the Second Stage of Pre-Proposal Outreach before issuing a regulatory proposal for NYCI.
• In March 2024, Governor Josh Shapiro proposed the Pennsylvania Climate Emissions Reduction Act (PACER) to establish a Pennsylvania-specific cap-and-invest program that allows Pennsylvania to determine its own cap on carbon and invest directly. If PACER is passed, Pennsylvania would remove itself from the Regional Greenhouse Gas Initiative (RGGI), which it had joined in 2022. Recommendation of SB 1191 to the PA Senate’s Environmental Resources and Energy Committee on May 28, 2024 was the last reported action for PASER.
• In 2024, the Vermont State Legislature passed Act 148 which requires the Agency of Natural Resources and Agency of Transportation to study a cap-and-invest program as a strategy that could support meeting the State’s climate goals. A project team is currently analyzing different cap-and-invest program scenarios. This work is expected to be completed in late 2024, after which the team will identify a recommended policy approach to provide to the legislature for consideration in the 2025 session.

RENEWABLE FUELS: It can be expected that a Harris Administration would continue and build upon the Biden Administration’s initiatives that support renewable fuels as integral to decarbonizing the U.S. economy. For example, Biden has supported the industry through increasing blending requirements under the EPA’s Renewable Fuel Standard (RFS), key tax credits under the IRA, and establishing the Sustainable Aviation Fuel Grand Challenge.

Moreover, vice presidential nominee Tim Walz has long been a proponent of renewable fuels. As governor of Minnesota, he co-chaired the Governors’ Biofuels Coalition in 2019, supported the RFS volume obligations, and increased state-level funding for renewable fuels.

During his time as president, Trump had balanced his support for corn farmers and ethanol producers in the Midwest, and fossil fuel stakeholders. Trump’s energy policy had focused on U.S. energy independence, which did include domestic renewable fuels as part of an “all of the above” energy approach.

However, the Heritage Foundation’s Project 2025 – seen by some as the policy agenda for a Trump Administration, yet disavowed by Trump himself—would greatly impact the renewable fuel industry. For instance, Project 2025 would alter or eliminate programs such as the RFS, the Conservation Reserve Program maintained by the U.S. Department of Agriculture, and integral research and development by the DOE on subjects such as ethanol in high-octane, mid-level blends like E20 or E30.

Regardless of the outcome of this year’s presidential election, the trajectory of the U.S. energy sector could dramatically change. Whether federal priority focuses on advancing clean energy deployment, strengthening decarbonization efforts, promoting domestic renewable/fossil fuel production, or implementing an approach that supports both economic growth and climate change measures, an understanding of both federal and state-level policy developments will be imperative to help predict the changing landscape and make informed business decisions.

OPIS welcomes the opportunity to initiate a dialogue with our Carbon Policy Team about these and other policy topics to support your business goals and efforts.