What does this mean for the United States and the world, and how do world leaders react to the situation?
When we look at the broader picture, a new national energy emergency has been declared. There is a move away from current vehicle emissions standards and electrification, and, as the biggest headline, the withdrawal from the Paris Agreement has been announced. In his inauguration speech, President Trump emphasized producing more gas and oil, aiming for self-sufficiency and exporting energy globally, even surpassing the record-high crude oil exports of 2024. The political will is to bring down prices, fill up strategic reserves, and push forward commodity exports, including LNG.
On environmental regulations, there is a pushback on vehicle standards for standard and heavy-duty vehicles that would have otherwise been implemented in 2027. This move is claimed to create a more balanced playing field for technology neutrality in vehicle standards and is considered a step towards ending the broader Green New Deal. Meanwhile, the European Commission is preparing a Clean Industrial Deal, which, from a competitive standpoint, still requires a thorough review.
Looking at the Paris Agreement, born in 2015, which finally reached conclusions on international carbon markets at COP29 in Azerbaijan, supporting developing countries financed by developed ones, Trump’s action is a recurring one, marking the second time he has pulled the United States out from it.
World and UN leaders commenting on these changes have declared that the clean energy boom is unstoppable, where we might currently see wealth shifting between countries rather than a real fallback. U.S. cities are strengthening their current and planned climate efforts through C40 and other city commitment communities as climate disasters, extreme weather events, and the risk of societal polarization are felt, leaving no option other than maintaining momentum. China is concerned with the United States’ fallback, as China needed time to commit to the Paris Agreement, and since their involvement, this is the second time the United States has withdrawn from it.
The European Commission has also communicated that its closest ally’s withdrawal is unfortunate. As before, the EU is expected to try to maintain momentum within the United Nations Framework Convention on Climate Change and the Paris Agreement. We shall see at what cost of actions and global competition this is feasible and whether we should expect a decline in ambitions, nationally determined contributions, or if there are national measures to balance the loss of international finance previously coming from the States.
In conclusion, actions are moving rapidly in opposite directions on both sides of the Atlantic. With 2024 the warmest year on record, business and political stakeholders are seeking clarity and common ground, observing more conservative economic approaches in climate and energy politics, among other areas.
This article was first published in the Budapest Business Journal print issue of January 24, 2025.
Producing journalism that is worthy of the name is a costly business. For over 30 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.
