ON day one in the office, the US President-elect Joe Biden is vowing to take the US back to the Paris Convention on Climate Change.
This is monumental.
The United States formally withdrew from the agreement on Nov 4. In a tweet the same day, the president-elect said: “Today, the Trump Administration officially left the Paris Climate Agreement. And in exactly 77 days, a Biden Administration will rejoin it.”
A few days later, Biden campaign adviser Symon Sanders also underlined the same message. On his first day in office, US President-elect Joe Biden is “going to make good” on his campaign trail promises. And this includes returning to the Paris climate accord, Sanders emphasised.
Unlike President Donald Trump, Biden sees climate change as a reality and not a hoax. The president-elect has proposed making US electricity production carbon-free by 2035 and to have the country achieve net-zero emissions by the middle of the century.
Reaching net-zero requires that any carbon emissions be balanced by absorbing an equivalent amount from the atmosphere by, for example, planting trees, a BBC analysis underlined.
The return plan of the US President-elect to the Paris Climate accord could put the goal of limiting global warming to 1.5°C “within striking distance,” a detailed analysis the Climate Action Tracker (CAT) was quoted in the media as saying. The CAT report underlined that, if fulfilled, Biden’s plan would reduce greenhouse gas emissions by about 75 Gigatonnes of carbon dioxide by 2050, decreasing global warming by 0.1°C by the end of the century.
The US is the world’s biggest economy and second-biggest emitter of greenhouse gases, but Trump reversed measures taken by former US president Barack Obama to reduce greenhouse gases and rejected the Paris agreement on climate change. The Paris agreement bound nations to hold global heating to well below 2°C, with an aspiration to limit temperature rises to 1.5°C.
Biden has also made it clear; he will not permit additional, new, “fracking on federally managed lands and waters”.
Biden also plans to spend $2 trillion US over four years to significantly escalate the use of clean energy in the transportation, electricity, and building sectors, to tackle climate change.
All these would be in sharp contrast to Trump’s policies. During his tenure, Trump loosened methane rules and opened new offshore and Arctic areas to drilling. Trump administration saw drilling on public lands as vital to maintaining the nation’s status as the world’s No. 1 oil and natural gas producer. Oil production from public lands and waters topped a record 1 billion barrels in 2019.
A Biden presidency is also going to have an immense impact on global energy geopolitics. The President-elect has promised to get back to the negotiations table with Iran and revive the Joint Comprehensive Plan of Action (JCPOA), commonly known as the Iran nuclear deal.
Under the pressure of his conservative constituency and of his regional allies, Trump took a hardline approach towards Tehran, walking out of the JCPOA, unilaterally. He also sanctioned Iran heavily, throttling the crude exports from the country and destroying its economy. Now if Biden succeeds in getting back to a deal with Iran, despite immense impediments, this could eventually mean the return of some two million barrels per day of crude to the global supply, making the markets still softer.
However, it may not be easy for the president-elect to reset the needle altogether with Iran. In fact, already the Trump administration, in coordination with Israel and several Gulf states, is pushing ahead with a plan to slap a long string of new sanctions on Iran in the 10 weeks left until Joe Biden’s inauguration on Jan 20, news website Axios has reported.
As per the report, the Trump administration believes such a “flood” of sanctions will increase pressure on the Iranians and make it harder for the Biden administration to revive the 2015 nuclear deal.
It is also believed that under Biden, the relationship between the United States and Saudi Arabia would also undergo a reset. That would also carry a significant impact on the energy world. A market share battle may restart, one can underline here.
With Trump gone, key members of the Organisation of the Petroleum Exporting Countries (Opec) are already wary that strains in the Opec+ alliance could re-emerge. Sources close to the organisation told Reuters they would miss Trump’s active involvement in the crude world.
Global energy markets will need to readjust to the emerging realities of a Biden era.
Published in Dawn, November 15th, 2020