Trump 2.0: What's At Stake For Climate Policy And It's Impact On US-India Cooperation

Trump's climate policies will not only have profound consequences for people in the US but his approach towards climate policy is expected to have global climate cooperation.

The victory of Donald Trump in the US Presidential elections has huge implications for the US trade policy, climate change, immigration and other issues. 

Trump has said that he would pull the US out of the Paris Climate Accords, a framework for reducing global greenhouse gas emissions, and would support increased nuclear energy production.

He is also expected to roll back the policies of his Democratic predecessor Joe Biden vis-a-vis electric vehicle mandates and other policies regarding reducing emissions. 

Trump's climate policies will not only have profound consequences for people in the US but his approach towards climate policy is expected to have global climate cooperation.

Despite shifts in power across more than 60 nations that held national polls worldwide this year, the US election has raised the stakes for bilateral and global alliances. Trump's return to the White House comes at a time when climate experts have warned that the Paris Agreement's warming targets are slipping beyond control and increasing the likelihood of potentially disastrous outcomes.

Harjeet Singh, Climate Activist and Global Engagement Director for the Fossil Fuel Non-Proliferation Treaty Initiative, said Trump's victory is a profound blow to global climate justice and an alarming escalation of climate risk for the world’s most vulnerable communities. 

"Trump's push to ramp up fossil fuel production, disregard for international agreements, and refusal to provide climate finance will deepen the crisis, endangering lives and livelihoods—especially in regions least responsible for, yet most impacted by, climate change," Singh said.

India-US Climate Cooperation

With a bilateral trade valued at around $190 billion, economic ties remain a cornerstone for the India-US relationship. Vice President Kamala Harris was expected to prioritise the continuity of initiatives, which were started by President Biden with the US' Development Finance Corporation placing emphasis on climate-friendly investments in India, supporting projects like renewable energy infrastructure and green technology development.

Experts believe that the US election results do not change the fact that India and the US will continue to be key strategic partners.

Dr Arunabha Ghosh, CEO of the Council on Energy, Environment and Water (CEEW), said that the proposed trade barriers will need careful navigation so that Indian industries, especially for clean technologies, do not suffer.

"Currently, India exports 90 per cent of its solar modules to the US. Over the next four years, India will need to be prepared and strategically nimble to deepen green trade, co-develop clean tech supply chains, and accelerate its energy transition. With Donald Trump in power, India can count on continued oil and gas supply to ensure its developmental needs since the US is a net exporter of fuels now," Arunabha Ghosh said.

Ghosh further added that between 2017 and 2024, the US became the fifth-largest liquified natural gas (LNG) and crude oil supplier to India.

Trump 2.0 Difference From Trump 1.0?

When in 2017 the US under the Trump presidency announced its intent to exit the Paris Climate Agreement, casting doubt on global climate efforts, India remained committed to its climate goals, striving to build a less carbon-intensive economy, while growing its GDP. 

A change in leadership in the US is likely to reshape India’s relationship with the US on climate policy, which could, in turn, impact its economic growth plans. 

Trump has been known for his protectionist stance as he recently criticised trade imbalances calling India a "big abuser" of trade agreements. In June 2019, the US revoked India's Generalised System of Preferences (GSP) status, removing duty-free benefits on certain Indian exports and raised concerns over high tariffs on motorcycles and medical devices.

However, one of the biggest economic policy initiatives in India’s favour under the Trump administration was the US-India Strategic Energy Partnership (SEP), established in 2018. This partnership expanded energy trade and investment between the two nations, increasing private investments in India’s clean energy plans even though he de-prioritised government backing. Under the last Trump administration, US-based private equity firms, such as Warburg Pincus and Goldman Sachs, invested in Indian renewable energy companies.

Climate Finance

Under Trump's presidency, which has criticised climate finance mechanisms calling them as wealth redistribution schemes unfavourable to the US, there may be a reluctance to allocate funds for international climate efforts, including those in India. 

However, India is likely to see some bilateral and private sector investments into clean projects. For instance, in 2018, the US Overseas Private Investment Corporation (OPIC) committed $350 million to ReNew Power, one of India’s largest renewable energy companies.

While Trump’s return signal a US retreat from funding obligations and reduced financial support, yet other developed countries especially within the G7 that have historically been major emitters cannot overlook their responsibility to urgently fulfill their share of climate funding.

This makes reaching an agreement at COP29 in Baku even more essential to secure financial support for developing nations’ clean energy transition and resilience-building. Post-2025.

Aarti Khosla, Director, Climate Trends said that though Trump’s actions on climate policy give no confidence that he will give the right attention the climate emergency, the world is different from the last time.

"The COP in Baku is going to start under a very challenging political context, one in which US will have a reduced mandate and no political will. It may lead to further lack of progress on important elements like hiking cash for climate action, and may create more impediments than solutions on contentious matters like trade given trumps protectionist stance," Khosla added.