A Republican victory in the United States, following the announcement that Donald Trump has won the US presidential election, is likely to have a negative impact on global sustainability efforts, warns Ninety One.
According to Nazmeera Moola, chief sustainability officer at Ninety One, a Trump presidency is likely to see the US retreat from all global climate initiatives, in a repeat of what happened during his previous term.
This is likely to slow momentum to combat climate change, unless other countries step up and fill the gap, Moola said.
“We do think countries like China and India will continue to focus on energy transition related investments as these investments have been driven by their positive financial benefits and impact on growth to date,” said Moola. “While a red sweep is net negative for climate considerations, we do not expect a blanket repeal of all elements of the Inflation Reduction Act.”
According to the investment manager, large portions of the IRA are increasingly being defended by republicans, whose districts benefit from the investment. However, if elements such as green hydrogen credits are retained, there are likely to be amendments in the way in which they are implemented that would result in more questionable climate outcomes.
Moola added: “The republican victory opens the door for tax credits for EVs to be rescinded. However, the proposed tariffs will provide some insulation from US EV producers from cheaper Chinese competitors.
“Other considerations include the impact of the prospective tariff hikes on the cost of new renewable projects in the US and the likely expansion of oil and gas exploration on federal lands as environmental regulation is rolled back.”
