By the end of 2024, insurers around the world will have to pay out more than $135 billion for losses from natural disasters caused by climate change, according to a report by Swiss reinsurance company Swiss Re.

This is a 17% increase from the previous year, and for the fifth year in a row it has exceeded $100 billion due to the increase in the number and scale of natural disasters. Swiss Re attributes this trend to global warming: 2024 is set to be the hottest year on record, with temperatures 1.54°C above the pre-industrial average.

The political conditions for tackling the climate crisis and its consequences are unlikely to improve next year. Some industry experts, commenting on the results of the US presidential race, could not resist the epithet “catastrophic”. “Donald Trump’s new term poses a serious threat to the planet,” the environmentalists said in a statement quoted by The Guardian.

Their fears are not unfounded. Trump already held the presidency from 2017 to 2021 and showed himself to be a climate skeptic and a supporter of hydrocarbon extraction. In particular, he stated that “the world needs global warming to cope with record cold snaps.”

In addition, he announced at the time the US withdrawal from the Paris Climate Agreement, which is the main international agreement in the field of reducing greenhouse gas emissions.

The United States ranks second among countries in terms of carbon emissions, so the denunciation of the Paris Agreement called into question the ability of humanity to maintain conditions on the planet suitable for life.

Trump’s intentions were not realized by Joe Biden’s victory in the previous election race. But now the situation may change again.

"Ukrainian Energy" figured out how the policy of the newly elected US president will affect the climate agenda and the distribution of investments in the energy sector.

A new impetus for oil and gas companies

In his 2024 election promises, Trump called the Paris Agreement a "disaster" and a "rip-off" and once again promised to abandon it in order to support the fossil fuel industry.

"We have more "liquid" gold than any country in the world," Donald Trump said in his speech after the election results were announced, referring to the large-scale oil reserves in the depths of the United States.

One of the informal slogans of his election campaign was the words "Drill, baby, drill." Thus, Trump promised to begin the development of new fields and increase hydrocarbon production.

In his opinion, this will reduce electricity prices in the United States and put an end to inflation. At the same time, oil production in the country, thanks to new technologies, has already increased to a record high in the last 14 years in 2023.

Dan Eberhart, CEO of the oil service company Canary LLC, believes that President Trump will accelerate the development of deposits on the sea shelf, as well as increase the pace of pipeline construction and shale oil production on federal lands. If during the Biden presidency three auctions for the development of offshore deposits were planned for five years, under Trump their number may increase significantly.

Such a policy will slow down the abandonment of traditional energy sources, although, according to scientific findings, it is the burning of coal, oil and gas that has provoked the current climate crisis: a rapid increase in global temperatures on the planet and an increase in the number of floods, forest fires and weather anomalies.

In 2023 alone, more than 2,000 people in Arizona, Nevada, and Texas died from unprecedented heat waves, and the country experienced 28 weather and climate disasters, each of which caused more than a billion dollars in damage.

In 2024, Americans again suffered from debilitating heat waves, as well as hurricanes and floods. But Trump denies that this is due to climate change caused by greenhouse gas emissions from energy and industry.

Obstacles to green energy

The 47th US president will probably try to repeal or weaken the Inflation Reduction Act (IRA), passed by the US Congress in 2022, which has become a central element of Biden’s economic strategy.

Thanks to this document, almost $ 370 billion will go to support the “green” economy in the coming years. The law provides tax breaks and grants for businesses that reduce greenhouse gas emissions in electricity, transportation, manufacturing, construction, and agriculture.

Experts at the Energy Innovation Policy & Technology think tank have estimated that implementing the IRA would allow the United States to reduce carbon dioxide emissions by 37-41% by 2030 compared to 2005 levels.

This falls just short of Joe Biden's 50-52% target, but it brings it closer than ever before, and combined with additional federal and state action, it gives a realistic chance of achieving it. However, without the support measures provided for by the IRA, emissions would have been reduced by only 24%.

"They are rolling out the red carpet for green investment," Ecocem CEO Donal O'Ryan told the Financial Times about the effect of the IRA.

However, Trump considers the IRA a “fraud” that “is throwing trillions of dollars at it.”

However, as the Financial Times writes, even he may not be able to repeal the law.

This will require a new vote in Congress. Moreover, the document has already been supported in states controlled by the new president’s fellow Republicans. Industrial enterprises located there have received investments under the “green” law. For example, a battery production plant from Honda and LG Energy Solution worth $4.4 billion has opened in Ohio.

Former Energy Secretary Dan Brouillette believes that Trump’s position on the IRA may be more moderate than many experts expect.

Still, the law provides protection for businesses, the prosperity of which the new president advocates. Some support measures are aimed at the development of nuclear energy, which fits into Trump’s plans to strengthen the energy independence of the United States.

But there is still a possibility of adjusting the mechanisms of the law. The Treasury Department may rewrite the rules for receiving benefits and make them more favorable for companies operating in the coal, oil and gas industries.

Trump also promised not to encourage the development of offshore wind energy, since the turbines kill whales and birds. Most likely, the new president will introduce a ban on issuing licenses for the installation of wind turbines or selling land for them in the coastal zone, writes Bloomberg.

However, there is reason to believe that protecting wind energy will become a priority for Republicans, whose districts have received economic dividends from this technology.

Weakening environmental requirements

Despite the fact that the threats to the future policy of the US president are still concentrated in the realm of assumptions, companies in the “green sector” of the economy have already felt the negative results of his victory. After the election, the value of shares of the American manufacturer of solar panels and batteries Sunrun fell by 26.2%, and one of the largest developers of renewable energy in the country AES Corp - by 9.5%.

According to the calculations of the Carbon Brief project, Trump's climate policy could increase greenhouse gas emissions by 4 billion tons by 2030, which is equivalent to the annual emissions of the European Union and Japan combined.

The International Energy Agency estimated that from 2019 to 2023, projects in the field of solar, wind and nuclear energy, as well as the introduction of electric vehicles and heat pumps, helped reduce global emissions by 2.2 billion tons of carbon per year.

Therefore, if Trump implements his campaign promises to abandon support for "green" technologies, then at least two years of work by the international community in this direction will be wasted.

But it is not only the fight against climate change that, in Trump’s opinion, hinders business. In an interview with NBC News, he called environmental and climate regulation “the most powerful tool for stopping economic growth.”

During his first presidential term, he relaxed more than 100 “green” requirements, especially regarding air and water quality. For example, his administration revised the standard that set limits on mercury emissions from power plants and lowered environmental requirements for coal-fired plants. The Biden administration canceled these relaxations, but Trump is likely to return to his past decisions.

The race for leadership

Trump gives very few reasons for optimism about the US green agenda, but still they are there. First, the pre-election alliance of the newly elected president with Elon Musk - the owner of Tesla, one of the world leaders in the production of electric vehicles. This could stimulate the development of electric transport in the United States. Tesla shares rose 15% after Trump’s victory.

Second, Dan Lashoff, director of the World Resources Institute, points out that individual states, cities, and businesses can support the fight against climate change and reduce CO2 emissions without relying on the central government. Thanks to generous tax breaks and investments under the Inflation Reduction Act, as well as the ability to make decisions without additional approval from the federal (central) government, they are able to reduce emissions on their own.

In addition, Lashoff says, the international political landscape has changed. Today, “world leaders know that reducing emissions and increasing the production of clean energy strengthen the economy and competitiveness of countries.” As an example, he cites the success of China in the field of green technologies, which has invested heavily in the production of solar and wind energy, becoming a global leader in this area. Therefore, if Trump decides to withdraw from the Paris Agreement again, other countries will have the opportunity to take the US place in the rapidly growing clean energy economy.

However, the danger remains, writes The New York Times, that Trump's victory will push European lawmakers to slow down the achievement of climate goals.

The newly elected American president may also inspire other oil and gas countries to increase hydrocarbon production.

“It is hardly possible to give an accurate forecast for the future,” the publication notes. But the next four years seem to be even more difficult for achieving climate goals and the most exciting in the competition of political ambitions and the desire of business to make money on both old and new technologies capable of ensuring decarbonization and reducing carbon emissions.”

Svitlana Dolinchuk, specially for “Ukrainian Energy”