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What parliamentary elections in France and the U.K. mean for everyone else.
While America has been distracted by its suddenly-very-real upcoming election, two other important political stories have been unfolding across the pond. The results of last week’s parliamentary votes in France and the United Kingdom have the power to sway global climate policy — and they might even contain lessons for the U.S. about the rise (or fall) of the far-right.
In June, French President Emmanuel Macron called snap elections, and the far-right National Rally party led by Marine Le Pen was widely expected to achieve a majority in the country’s 577-seat National Assembly. Instead, the New Popular Front, a hastily-formed alliance between the hard left, Greens, and Socialists, came out on top in a runoff, followed by the centrist Ensemble (which includes Macron’s Renaissance party) and the National Rally in a distant third. Because no party won the 289 seats needed to gain control of the chamber, the left and center now have to form a coalition government, which means ideological compromise — something that’s distinctly un-French. “We're not the Germans, we're not the Spanish, we're not the Italians — we don't do coalitions,” one French political commentator toldSky News.
Climate change wasn’t a big theme, but the National Rally’s proposals certainly had experts nervous. The party tapped into simmering discontent among some demographics — farmers, in particular — who feel unfairly burdened by new regulations in service of the European Union’s ambitious agenda, known as the Green Deal, including a goal to cut the bloc’s net greenhouse gas emissions by at least 55% by 2030 and reach net zero by 2050. If it had won, the party planned to dismantle France’s energy efficiency rules, roll back a 2035 ban on new gas-powered cars, block new wind farms, do away with low-emission zones, and transform electricity trade. France is already the EU’s third biggest emitter, and the EU as a whole is responsible for about 9% of global CO2 emissions, although emissions have been falling, especially in the energy sector.
As the dust settles in France, the biggest danger to climate policy now is stalemate. The lackluster results for the far right are no doubt a relief to the climate conscious. “We have avoided a catastrophe,” Alain Fischer, president of the French Academy of Sciences in Paris, toldNature. The winning NFP, for its part, backs the Green Deal’s emissions targets and wants France to become “the European leader in renewable energies” through offshore wind power and the development of hydroelectric power. It also calls for the “creation of an international court for climate and environmental justice.” But the next several months are likely to be chaotic as the parties tussle over what the government should look like, and there is no deadline for these decisions to be made. The leadership limbo could bring political paralysis at a time when the EU is just getting its bearings following bloc-wide parliamentary elections — which, by the way, saw the Greens lose seats in lots of places. In response, the non-profit Climate Group put out a statement calling for the French government to “commit to safeguarding the EU Green Deal and ensuring a sustainable future for the continent.” The good news is that a large majority of EU voters want to see more climate action.
The Labour Party won the general election in a landslide, bringing an end to 14 years of Conservative Party rule. During his tenure, former Prime Minister Rishi Sunak watered down key net-zero strategies, delayed a ban on new combustion engine vehicles, scrapped energy efficiency standards, and approved a large new oil field in the North Sea. His party also pulled low-emission zones into the culture wars in a desperate attempt to win over voters. None of this played to his advantage. According to Desmog, two-thirds of the Conservative members of Parliament who were anti-net zero lost their seats, including the former energy secretary. “With a clear mandate for climate action,” wrote climate change think tank E3G, “all eyes are now on Labour to deliver.”
New Prime Minister Keir Starmer has pledged to turn the U.K. into a “clean energy superpower” by doubling onshore wind, tripling solar power, and quadrupling offshore wind by 2030. He also plans to upgrade the grid to speed the rollout of clean energy projects, while at the same time denying new licenses for oil and gas exploration in the North Sea. He wants to establish a publicly owned clean energy firm and decarbonize the power sector by 2030. And he plans to reinstate the 2030 ban on new gas cars. The goals are lofty, and meeting them will “extensive change across every sector of the economy,” wrote Carbon Brief. But Labour seems to be wasting little time. Days after taking power, the new government scrapped a ban on onshore wind farms that had been in place since 2015 and which the new Chancellor of the Exchequer Rachel Reeves called “absurd.”
The U.K. accounts for about 1% of global greenhouse gas emissions. That might be paltry compared to, say, the U.S. (13.5%) or China (32%), but it has a chance now to use its global influence and proximity to Europe to keep the needle moving in the right direction. That goes especially if it is nudged by the Green party, which surprised everyone by quadrupling its number of seats in Parliament (albeit to just four). As The New York Timesnoted, Britain is where the industrial revolution began, so “the speed and scale of Britain’s energy transition is likely to be closely watched by other industrialized countries and emerging economies alike.”
What’s clear from both of these cases is that people really care about climate policy and are willing to vote with that in mind. That can swing either way, though, depending on the particular set of policies and how they affect the electorate. As extreme weather intensifies, however, it may become more difficult for far-right parties to minimize the significance of climate change. “We need to recognize that extreme weather is politicizing people against this climate denial,” said Paul Dickinson, founder of CDP, an emissions disclosure platform, and co-host of the podcast Outrage + Optimism. “It is the Achilles heel of the extreme right that they’re opposed to the realities of extreme weather. That’s how I think if we’re organized and disciplined, we will defeat them.”
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But ... how?
President-elect Donald Trump on Tuesday rocked the energy world when he promised “fully expedited approvals and permits, including, but in no way limited to, all Environmental approvals” for “Any person or company investing ONE BILLION DOLLARS, OR MORE, in the United States of America,” in a post on Truth Social Tuesday.
“GET READY TO ROCK!!!” he added.
Trump has frequently derided regulatory barriers to development, including in his announcements of various economic and policy roles in his upcoming administration. His designee for Secretary of the Interior, Doug Burgum, for instance, will also head a
National Energy Council that will “oversee the path to U.S. ENERGY DOMINANCE by cutting red tape … by focusing on INNOVATION over longstanding, but totally unnecessary, regulation.”
When Trump
announced his nomination of Lee Zeldin to head the Environmental Protection Agency, he said Zeldin would “ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American business.”
Current interpretations of existing laws dictate that any project constituting a major federal action (e.g. one that uses public lands) must be reviewed under the National Environmental Policy Act, the country’s signature permitting law. Federal courts are often asked in litigation to sign off on whether that review process — although not the outcome — was sufficient.
Regardless of any changes Trump may make to the federal regulatory system as president, that infrastructure is already in flux. The D.C. Circuit Court of Appeals recently issued a ruling that throws into doubt decades of NEPA enforcement. Also on Tuesday, the Supreme Court heard a separate case on the limits of NEPA as it relates to aproposed rail line expansion to transport oil from Utah’s Uinta Basin to refineries on the Gulf of Mexico. Although the court is unlikely to issue a decision until next year, its current membership has shown itself plenty willing to scrap longstanding precedent in the name of cutting the regulatory state down to size.
Trump did not support his announcement with any additional materials laying out the legal authorities he plans to exercise to exempt these projects from regulation or proposed legislation, but it already attracted criticism from environmentalists, with the Sierra Club describing it as a “plan to sell out communities and environment to the highest bidder.It’s also unclear whether Trump was referring to foreign direct investment in the United States, of which there was $177 billion in 2022,according to the Department of Commerce.
Trump’s appointed co-deregulator-in-chief, for one, approved of his message today. “This is awesome 🚀🇺🇸,” Elon Musk wrote on X in response.
Companies are racing to finish the paperwork on their Department of Energy loans.
Of the over $13 billion in loans and loan guarantees that the Energy Department’s Loan Programs Office has made under Biden, nearly a third of that funding has been doled out in the month since the presidential election. And of the $41 billion in conditional commitments — agreements to provide a loan once the borrower satisfies certain preconditions — that proportion rises to nearly half. That includes some of the largest funding announcements in the office’s history: more than $7.5 billion to StarPlus Energy for battery manufacturing, $4.9 billion to Grain Belt Express for a transmission project, and nearly $6.6 billion to the electric vehicle company Rivian to support its new manufacturing facility in Georgia.
The acceleration represents a clear push by the outgoing Biden administration to get money out the door before President-elect Donald Trump, who has threatened to hollow out much of the Department of Energy, takes office. Still, there’s a good chance these recent conditional commitments won’t become final before the new administration takes office, as that process involves checking a series of nontrivial boxes that include performing due diligence, addressing or mitigating various project risks, and negotiating financing terms. And if the deals aren’t finalized before Trump takes office, they’re at risk of being paused or cancelled altogether, something the DOE considers unwise, to put it lightly.
“It would be irresponsible for any government to turn its back on private sector partners, states, and communities that are benefiting from lower energy costs and new economic opportunities spurred by LPO’s investments,” a spokesperson wrote to me in an email.
The once nearly dormant LPO has had a renaissance under the Biden administration and the office’s current director, Jigar Shah. The Inflation Reduction Act supercharged its lending authority to $400 billion, from just $40 billion when Biden took office. Then a week after the election, the office announced that it had recalibrated its risk estimates for the loan guarantees that it makes under the Energy Infrastructure Reinvestment program, which works to modernize and repurpose existing energy infrastructure to make it cleaner and more energy efficient. As the office explained, these projects “may reflect a relatively moderate risk profile in comparison to typical projects LPO finances with higher project risk.” When there’s less risk involved, LPO doesn’t have to set aside as much money to cover a possible default, which in this case has allowed the office to more than quadruple its funding for qualifying projects.
It’s not just that LPO staffers are working fast, though that’s part of it — it’s also that loan beneficiaries have picked up their pace in responding to the LPO. As Shah emphasized today at the LPO’s second annual Demonstrate Deploy Decarbonize conference, finalizing conditional commitments largely depends on companies getting their ducks in a row as quickly as possible. “I do think that right now borrowers are sufficiently motivated to move more quickly than they have probably a year ago,” Shah said. “It's up to the borrowers. Our process hasn’t changed. Their ability to move through it faster is in their control.”
Shah noted that though timelines may be accelerating, the office’s due diligence procedures have remained the same. Thus far, the project that has moved the fastest from a conditional commitment to a finalized loan was for a clean hydrogen and energy storage facility in Utah. That took 43 days, and there are 46 left in Biden’s presidency. Let’s see what the LPO can do.
The expanded investment tax credit rules are out.
In the waning days of the Biden administration, the Treasury Department is dotting the i’s and crossing the t’s on the tax rules that form the heart of the Inflation Reduction Act and its climate strategy. Today, Treasury has released final rules for the Section 48 Investment Tax Credit, which gives project owners (and/or their tax equity partners) 30% back on their investments in clean energy production.
The IRA-amended investment tax credit, plus its sibling production tax credit, are updates and expansion on tax policies that have been in place for decades supporting largely the solar and wind industries. To be clear, today’s announcement does not contain the final rules for the so-called “technology-neutral” clean electricity tax credits established under the IRA, which will supercede the existing investment and production tax credits beginning next year and for which all non-carbon emitting sources of energy can qualify.
But projects that begin construction this year can still qualify for and claim the legacy credits, which were expanded by the Inflation Reduction Act to include things like standalone energy storage. Projects that go into service this year would only be eligible for the legacy credits, while a project that begins construction this year and goes into service next year or later could choose between the legacy credits or the tech neutral credits, but not both.
The proposed rules, released in November of last year, set off a flurry of campaigning and lobbying by the industry, seeking adjustments to their favor. The final regulations largely hew to the earlier release, although they do include clarifications on what precise aspects of an energy system qualify for the credits. Under the final rules, for instance the “upgrading equipment” necessary for “cleaning and conditioning” biogas — i.e. removing other gases to make it a pure gas stream — can qualify for the credit.
Going into the end of the year, the major items left on the Treasury Department’s agenda were the tech neutral tax credits, rules for the advanced manufacturing tax credit, and rules for credits related to the production of clean hydrogen; advanced manufacturing tax credit rules came out in late October. While the Biden Treasury is doing its best to get rules out the door before Donald Trump’s inauguration, the fate of all clean energy tax credits is up in the air as Republicans prepare take power in Washington and start carving up the IRA, whether by “sledgehammer” or by “scalpel.”