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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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The nonprofit laid off 36 employees, or 28% of its headcount.
The Trump administration’s funding freeze has hit the leading electrification nonprofit Rewiring America, which announced Thursday that it will be cutting its workforce by 28%, or 36 employees. In a letter to the team, the organization’s cofounder and CEO Ari Matusiak placed the blame squarely on the Trump administration’s attempts to claw back billions in funding allocated through the Greenhouse Gas Reduction Fund.
“The volatility we face is not something we created: it is being directed at us,” Matusiak wrote in his public letter to employees. Along with a group of four other housing, climate, and community organizations, collectively known as Power Forward Communities, Rewiring America was the recipient of a $2 billion GGRF grant last April to help decarbonize American homes.
Now, the future of that funding is being held up in court. GGRF funds have been frozen since mid-February as Lee Zeldin’s Environmental Protection Agency has tried to rescind $20 billion of the program’s $27 billion total funding, an effort that a federal judge blocked in March. While that judge, Tanya S. Chutkan, called the EPA’s actions “arbitrary and capricious,” for now the money remains locked up in a Citibank account. This has wreaked havoc on organizations such as Rewiring America, which structured projects and staffing decisions around the grants.
“Since February, we have been unable to access our competitively and lawfully awarded grant dollars,” Matusiak wrote in a LinkedIn post on Thursday. “We have been the subject of baseless and defamatory attacks. We are facing purposeful volatility designed to prevent us from fulfilling our obligations and from delivering lower energy costs and cheaper electricity to millions of American households across the country.”
Matusiak wrote that while “Rewiring America is not going anywhere,” the organization is planning to address said volatility by tightening its focus on working with states to lower electricity costs, building a digital marketplace for households to access electric upgrades, and courting investment from third parties such as hyperscale cloud service providers, utilities, and manufacturers. Matusiak also said Rewiring America will be restructured “into a tighter formation,” such that it can continue to operate even if the GGRF funding never comes through.
Power Forward Communities is also continuing to fight for its money in court. Right there with it are the Climate United Fund and the Coalition for Green Capital, which were awarded nearly $7 billion and $5 billion, respectively, through the GGRF.
What specific teams within Rewiring America are being hit by these layoffs isn’t yet clear, though presumably everyone let go has already been notified. As the announcement went live Thursday afternoon, it stated that employees “will receive an email within the next few minutes informing you of whether your role has been impacted.”
“These are volatile and challenging times,” Matusiak wrote on LinkedIn. “It remains on all of us to create a better world we can all share. More so than ever.”
The company managed to put a positive spin on tariffs.
The residential solar company Sunrun is, like much of the rest of the clean energy business, getting hit by tariffs. The company told investors in its first quarter earnings report Tuesday that about half its supply of solar modules comes from overseas, and thus is subject to import taxes. It’s trying to secure more modules domestically “as availability increases,” Sunrun said, but “costs are higher and availability limited near-term.”
“We do not directly import any solar equipment from China, although producers in China are important for various upstream components used by our suppliers,” Sunrun chief executive Mary Powell said on the call, indicating that having an entirely-China-free supply chain is likely impossible in the renewable energy industry.
Hardware makes up about a third of the company’s costs, according to Powell. “This cost will increase from tariffs,” she said, although some advance purchasing done before the end of last year will help mitigate that. All told, tariffs could lower the company’s cash generation by $100 million to $200 million, chief financial officer Danny Abajian said.
But — and here’s where things get interesting — the company also offered a positive spin on tariffs.
In a slide presentation to investors, the company said that “sustained, severe tariffs may drive the country to a recession.” Sounds bad, right?
But no, not for Sunrun. A recession could mean “lower long term interest rates,” which, since the company relies heavily on securitizing solar leases and benefits from lower interest rates, could round in the company’s favor.
In its annual report released in February, the company mentioned that “higher rates increase our cost of capital and decrease the amount of capital available to us to finance the deployment of new solar energy systems.” On Wednesday, the company estimated that a 10% tariff, which is the baseline rate in the Trump “Liberation Day” tariffs, could be offset with a half percentage point decline in the company’s cost of capital, although it didn’t provide any further details behind the calculation.
Even in the absence of interest rate relief, a recession could still be okay for Sunrun.
“Historically, recessions have driven more demand for our products,” the company said in its presentation, arguing that because their solar systems offer savings compared to utility rates, they become more attractive when households get more money conscious.
Sunrun shares are up almost 10% today, as the company showed more growth than expected.
For what it’s worth, the much-ballyhooed decline in long-term interest rates as a result of Trump’s tariffs hasn’t actually happened, at least not yet. The Federal Reserve on Wednesday decided to keep the federal funds rate at 4.5%, the third time in a row the board of governors have chosen to maintain the status quo. The yield on 10-year treasuries, often used as a benchmark for interest rates, is up slightly since “Liberation Day” on April 2 and sits today at 4.34%, compared to 4.19% before Trump’s tariffs announcements.
Meta and Microsoft both confirmed plans to invest heavily in AI infrastructure.
Big Tech said this week that it’s going full steam ahead with building out data centers, and the power industry loves it. Since Microsoft and Meta reported their earnings for the beginning of the year on Wednesday, including announcements either reaffirming their guidance on capital expenditures or even increasing it, power sector stocks have jumped.
Shares of Vistra, which has a fleet of power plants including nuclear, natural gas, coal, and renewables, are up almost 7% in early afternoon trading. Constellation, one of the largest nuclear producers in the country, is up 8%. GE Vernova, which makes in-demand gas turbines, is up 4%. Chip designer Nvidia’s shares are up 4%.
Microsoft, which has been dogged byanalyst and media reports that it’s canceling some data center builds or slowing down its overall pace of deployment, reaffirmed its previousguidance that it would spend around $80 billion on data centers for its fiscal year. The affirmed guidance, Dan Ives of Wedbush Securities wrote in a note to clients, came “put to rest” the earlier chatter.
Meta, meanwhile, raised its guidance for capital expenditures from a range of $60 billion to $65 billion to at least $64 billion and as much as $72 billion.
Looking at these hyperscalers, as well as the data center company CoreWeave, Morgan Stanley estimates 38% annual growth in capital expenditures for cloud computing in 2025, to $392 billion — a $29 billion or 7 percentage point jump from its estimate a month ago. This increased spending will be a “boost to AI capex/power enablers.”
These companies, which make up the larger artificial intelligence supplier complex, were some of the most affected by Donald Trump’s Liberation Day tariffs announcements, as energy production ishighly sensitive to the global macroeconomy. (Not to mention power plants and power plant suppliers are themselvesoften major purchasers of foreign goods and commodities.) GE Vernova, for example, told investors last month that it would take a several hundred million hit thanks to tariffs.
But in the topsy turvy world of post “Liberation Day” markets, these companies’ investors are optimistic about the future again.
Microsoft chief executive Satya Nadella told analysts on the company’s earnings call that “we will be short power” when it comes to building out data centers, and that “I need power in specific places so that we can either lease or build at the pace at which we want.”
How that power will be provided is one of the key questions of the energy transition.
Big tech companies tend to have some kind of commitment to using renewable or low-carbon power, and are among the country’s largest voluntary purchasers of non-carbon-emitting power. Microsoft, for example,is helping pay for the planned restart of one unit of the Three Mile Island nuclear plant by agreeing to buy its power output.
There is a tight market for all sorts of power equipment right now, especially gas turbines, which will remain in short supply well into the back end of this decade based on current production plans. Renewable developers such as NextEra argue that solar, wind, and batteries make the most sense to quickly meet the needs of power-hungry data center developers and utilities because of how quickly and cheaply they can be built.“We should be thinking about renewables and battery storage as a critical bridge to when other technology is ready at scale, like new gas-fired plants,” NextEra chief executive John Ketchum said on an earnings call late last month, reversing the typical line that natural gas can serve as a “bridge fuel” to a low carbon future. “Gas turbines are in short supply and in high demand.”
In the meantime, load growth from data centers could push up power prices across the board. So even if you can’t build a new gas plant anytime soon, the one you’re operating that’s powering a data center right now is as good as gold.