The Market Signal Sent By Trump and Harris on Climate During the Debate

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When President Biden entered the White House in 2021, before his administration had written any new regulations or signed landmark climate legislation into law, I wrote that his presidency had already advanced efforts to address climate change simply by sending a signal to the marketplace that fossil fuels are not the future.

That signal was the result of policy plans, campaign pronouncements, and, finally, an executive order signed just days into his presidential tenure that called for officials across the government to make climate change central to policy making. And, almost immediately, companies responded, adjusting their strategic plans to account for a more climate-friendly policymaking outlook from Washington.

This year’s political cycle has offered little in the way of climate campaign promises or platforms. Indeed, some of the deepest discussion on climate and energy came during a few minutes in Tuesday’s presidential debate. While the discussion lacked details, it offered an interesting opportunity to evaluate where climate policy and, to a certain extent, the market may be going.

It’s worth starting with Vice President Kamala Harris. In 2019, she ran as a progressive with bold climate commitments—including a proposal for $10 trillion in climate spending and support for the Green New Deal policy platform. And so even some of the climate activists most skeptical of Biden were ready to rally around her in hopes that she would pursue ambitious new environmental programs.

In this week’s debate, she offered little new on climate. Instead, she emphasized continuity, touting the Biden Administration’s Inflation Reduction Act (IRA)—the most significant climate law in this country’s history—and calling for a continuation of investments in clean technology manufacturing. “We have invested in clean energy to the point that we are opening up factories around the world,” she said.

In other words, she painted herself as the climate continuity candidate rather than a crusader for a bigger policy agenda. Continuity may not necessarily be something that you can put on a T-shirt, but it would nonetheless aid the deployment of clean technologies. The Biden Administration has spent two years crafting the rules of the road to implement the IRA, including with the creation of programs that investors and developers now rely upon. Simply knowing that those rules will remain can help stabilize the market. That doesn’t necessarily mean that she will have nothing new to offer on climate if she were to serve as president. For one, some policy revisions might actually be helpful to improve implementation of the IRA.    

She also promised continuity with regard to oil and gas, saying that “we have got to invest in diverse sources of energy so we reduce our reliance on foreign oil.” The statement disappointed climate activists who would like to see her take an aggressive posture toward the industry. But it also offers some reassurance to energy observers that she doesn’t intend to wreak havoc on oil markets while the world remains in the throes of transition.  

Former President Donald Trump meanwhile spoke with even less clarity about his climate plans. Indeed, he avoided talking about climate change when asked and instead used the opportunity to talk about his plans to impose tariffs on Chinese imports. “What they have given to China is unbelievable,” he said. “We'll put tariffs on those cars so they can't come into our country.”

It’s a telling answer. The Biden Administration is currently trying to thread a delicate needle with regard to China, hoping to incentivize the creation of a domestic clean energy supply chain in the long-term while relying on Chinese imports in the short term. Trump’s agenda would throw that out, rejiggering supply chains, capital investments, and strategic planning. All told, that would leave domestic clean technology deployment in a delicate place with products critical to the transition missing from the U.S. market  

The climate discussion in the debate offered just a snapshot, skimming the surface of the relevant climate questions. But, nonetheless, watching it makes it easy to view Harris as a voice for continuity and Trump as a candidate eager to blow up the country’s climate and clean energy ambitions. Before any law is signed or regulation is promulgated, businesses will respond to those signals.