First glance

Trump’s comeback and its implications for EU climate and energy policy

Trump’s return should not be seen as a threat to EU decarbonisation, but as a rallying cry to unite and push forward more strongly

Publishing date
07 November 2024
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The return of President Trump is set to profoundly reshape US climate and energy policy, with far-reaching repercussions internationally. The European Union’s strategy for dealing with these repercussions should have three underpinnings: global climate action, energy policy and competitiveness, and clean-tech investment and trade. Fortunately for the EU, this approach largely coincides with its own strategic interests.

The first consequence of Trump’s victory will of course be US backtracking on climate action. He is expected to aggressively dismantle federal environmental and climate regulations, which will be only partly offset by stronger climate policy in US states and by the interests of the private sector in pursuing the green transition. Trump will likely withdraw the US from the Paris Agreement again, weakening global climate momentum at a time of increasing acrimony among emerging markets and developing economies about the West’s failure to provide sufficient support. Without the US, the EU risks greater isolation in climate diplomacy. 

In response, the EU must push ahead with its own domestic decarbonisation agenda, leading by example at the global level. This is in Europe’s own economic interest, for three reasons. First, global decarbonisation is vital for the EU in seeking to limit increasingly expensive climate damage in the future. Second, it will help the EU enhance its economic competitiveness and economic security. Third, it represents a clean-tech export opportunity for Europe. The EU must stick with its plan even as difficult trade-offs get tougher – such as increased tension between the need to hike defence spending and public investment needs in climate.

The EU must also strengthen its climate diplomacy efforts with major emitters including China and India, if only to prevent others from following the US. The EU should build alliances to ensure that the 2025 nationally determined contributions – or country emissions reduction pledges – to be submitted by world’s governments ahead of the 2025 COP30 climate summit, are ambitious, detailed and likely to mobilise enough green investment in the coming years. 

Secondly, Trump aims to make the US not just “energy independent”, but “energy dominant”. He has pledged to halve natural gas and electricity prices within a year, largely through increased natural gas production. If this happens, it would widen the EU-US energy price gap, further undermining EU industrial competitiveness.

The only structural solution to the EU’s high energy price problem is the green transition. This must be accelerated. A unified approach to clean electrification is fundamental to ensure efficient development of renewable energy and of the required electricity grid and flexibility infrastructure.

Trump’s fossil-fuel agenda is in the selfish interest of the US; it has no content for the EU, which is not endowed with fossil-fuel resources. 

On clean-tech investment and trade, Trump has threatened to rescind or substantially scale back the US Inflation Reduction Act (IRA), calling it a “socialist green new scam”. He may retain some provisions, particularly to keep clean-tech manufacturing investments in Republican states that benefit from the IRA, but his stance nevertheless suggests a departure from the current trajectory of US clean-tech investment. The uptake of mature renewables will likely persist driven by market fundamentals, but policy volatility may deter less-mature clean technologies, particularly in sectors that depend on federal subsidies. Deployment of offshore wind may also be deterred, damaging European companies heavily invested in the sector.

Trump has also signalled a return of ‘America First’ policies in trade, potentially with severe consequences for European exports to the US, especially in the already under-stress automotive sector. Moreover, Chinese goods excluded from the US market might flow into the EU, putting pressure on European industries and complicating the trade-offs between decarbonisation, competitiveness and security that Europe already faces.

This underscores the pressing need for stronger clean industrial policy, via the EU Clean Industrial Deal promised by European Commission president Ursula von der Leyen in the first 100 days of her second term. Trump’s victory should serve as a wake-up call on the need to stimulate domestic green investments and to agree new clean trade and investment partnerships with third countries.

Trump’s return should therefore be considered a substantial boost to the implementation of the EU’s climate and energy strategy. This is not just about protection against Trump’s policies. The EU should reinforce its position as a self-reliant climate leader in a fractured global landscape. Indecision and fragmentation are not options. Trump’s return to power must be a strong push for the EU and its members to overcome political divisions and unite around the objective of pursuing decarbonisation, while boosting industrial competitiveness and increasing the continent’s security.

This First Glance was also published on Corriere della Sera in Italian; on Les Echos in French and on El Economista in Spanish.

About the authors

  • Simone Tagliapietra

    Simone Tagliapietra is a Senior fellow at Bruegel.

    He is also a Part-time professor at the Florence School of Transnational Governance (STG) of the European University Institute and an Adjunct professor at the School of Advanced International Studies (SAIS) Europe of The Johns Hopkins University.

    His research focuses on the EU climate and energy policy, and on its industrial and social dimensions. With a record of numerous policy and scientific publications, also in leading journals such as Nature and Science, he is the author of Global Energy Fundamentals (Cambridge University Press, 2020) and co-author of The Macroeconomics of Decarbonisation (Cambridge University Press, 2024).

    On the basis of his policy and scientific production, Dr. Tagliapietra regularly supports EU and national institutions in the development of their public policies in the field of climate and energy, also through regular interaction with public decision-makers in EU and national institutions, as well as through regular parliamentary testimonies in the European Parliament and various national parliamentary assemblies inside and outside Europe, such as the French Senate, the UK House of Lords and the US Senate. His columns and policy work are widely published and cited in leading international media.

    Dr. Tagliapietra also is a Member of the Board of Directors of the Clean Air Task Force (CATF) and Senior associate of the Payne Institute at the Colorado School of Mines in Golden. He holds a PhD in International Political Economy from the Catholic University of Milan, where he previously graduated under the supervision of Professor Alberto Quadrio Curzio and where he also served as an Assistant professor (tenure-track) until 2024. Born in the Dolomites in 1988, he speaks Italian, English and French.

  • Cecilia Trasi

    Cecilia works at Bruegel as a Research analyst. She completed a BSc in Economics at Università Cattolica in Milan, and then a Master's in Public Policy at the Hertie School in Berlin.

    Before joining Bruegel, Cecilia pursued a Blue Book traineeship at the European Commission in DG INTPA focusing on renewable energy and green hydrogen and cooperation with countries in Sub-Saharan Africa. During her studies, Cecilia worked at the Organisation for Economic Cooperation and Development (OECD) on private sector development and trade in the Eastern Partnership. Also, she was a research assistant at the Hertie School, investigating the effect of the rise of China on European governance in the areas of trade and finance.

    Cecilia is fluent in Italian and English and has a good command of German and French.

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