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The US is once again going where no rich country has gone before. Earlier this month, the White House topped off a year of regulatory rollbacks around climate change by repealing the “endangerment finding,” which is the rule that allows the Environmental Protection Agency to curb carbon emissions because of their health consequences.
President Donald Trump heralds this as great news for the US economy, energy security, the fossil fuel industry and the people who work in it, like the coal miners he welcomed to the White House earlier this month after signing an executive order requiring the Department of War (it pains me to write that) to use more coal power. The truth is that it is none of those things. Trump’s war on clean energy is going to make America sicker and poorer.
Let’s start with the fact that the administration’s sabotage of existing federal tax credits for electric vehicles, clawbacks of already funded grants and loans for clean energy projects, and cuts to federal fuel efficiency mandates are costing Detroit $50bn. That’s the amount of writedowns being taken by the Big Three automakers — GM, Ford and Stellantis — since they are now being disincentivised to move into EVs.
But that number, large though it is, doesn’t begin to capture all the costs to the federal flip flops on both the demand and investment side of the transportation business, which is the largest single source of greenhouse gas in the US.
The BlueGreen Alliance, an association of labour unions and environmental groups, put out research last year estimating that the repeal of the clean energy manufacturing tax credit alone puts over 2mn jobs at risk in places like Arizona, Kentucky, Michigan, South Carolina, Tennessee and West Virginia, which were starting to benefit from a clean energy-related manufacturing investment boom.
That boom is already turning to bust. Manufacturing jobs have fallen under Trump, who promised to bring industrial work back to the US. Research firm Rhodium Group estimates that $22bn in planned EV, battery and critical mineral investment has dried up.
Meanwhile, workers in fossil fuel-dependent states who had been successfully and painfully transitioned to jobs in clean tech are getting laid off. This past December, for example, Ford shut a huge battery facility in Kentucky, a coal state, firing 1,600 workers in a place where state and local government had spent $250mn to lure the new business in.
Some workers may get pushed back into coal mining. If so, they will not be protected by the stronger silica standard endorsed by the Biden administration. That was an effort to eradicate the black lung disease that a fifth of veteran coal miners now have from using the more powerful machinery needed to reach coal in mature mines as it becomes harder to extract, kicking up more silica dust.
The Trump administration paused enforcement of the standard amid a restructuring of numerous federal agencies that resulted in thousands of labour and health workers losing their jobs. “The guy who says he’s a champion of coal miners literally doesn’t care whether they live or die,” points out BlueGreen Alliance executive director Jason Walsh.
I could go on, but you get the idea. While the White House lauds the money saved from regulatory cuts, public health and environmental advocates are worried about the hundreds of thousands of premature deaths linked to climate change in the pre-regulatory era we seem to be regressing to. People in Mississippi worried about pollution from an influx of Venezuelan oil expected to hit a Chevron refinery in their community are asking the oil company to buy their homes. As China serves up cheap solar panels to emerging markets, America is becoming one.
The immediate costs I’ve laid out are just the beginning. For the US automobile industry, stagnation is now the best possible outcome. Even if we get a post-2028 rollback of Trump’s rollbacks, that will put America years behind China, which clearly owns the clean energy future.
The legal battles over all this have begun (the first lawsuit over the endangerment rule was filed last week, adding to many others). The lack of certainty resulting from ongoing legal action is itself a huge impediment to foreign investment, not just in the transport sector, but in the supply chain that serves it.
One wonders what risk premium might be put on a nation with less interest in high-growth industries, as well as dirtier water and air, especially at a time when the insurance industry wants to push more costs from climate-related disasters on to companies, banks and governments themselves. Premiums that have already risen by high double digits in some places are likely to rise more. Overall borrowing costs for those investing in the US might too.
Beyond this, I must wonder if America’s utter abdication of any responsibility for global warming will someday come back to bite in the form of retaliatory tariffs or financial sanctions placed on the US by other countries. What’s to stop a group of nations with record climate-related economic losses from eventually penalising the US, just as America has penalised nations that support terrorism? The costs — both human and economic — of the former are already far higher.
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