Combating climate change was a major focus of US President Joe Biden’s foreign and domestic policy agenda, which involved investing two trillion dollars in clean, green energy
A return to the Paris climate agreement was the first step in implementing the Democrat’s proposed Clean Energy and Environmental Justice Revolution Plan. It plans to reduce carbon emissions completely by 2050, increase the use of renewable energy, impose a moratorium on fossil fuel extraction, activate the production of electric vehicles and make them viable. Decarbonisation and the transition to clean energy is scheduled to take place by 2035.
This environmentally-friendly course also affects the social sphere: new jobs and an increase in the minimum wage for low-income groups and minorities of colour are expected to improve social and racial inequalities. One way to financially support the clean energy transition and improve worker welfare would be to increase the corporate tax rate to 28% (up from the 21% to which former US President Donald Trump reduced taxes).
The implementation of the stated provisions would mark the beginning of a new, post-industrial phase of the global economy. However, it is likely that this initiative may have less good intentions, among them the desire to limit the development of the oil industry in the US and elsewhere in the world: these actions are in line with the presidential administration’s attempts to prevent the completion of the Nord Stream 2 project. Nevertheless, experts point out that the pipeline could also operate profitably in a “green energy” environment, as it could transport not only natural gas, but also hydrogen.
Moreover, the plan poses a concrete threat to the USA itself: Reduced oil production by US companies will inevitably lead to the risk of the States losing their place on the international oil market. It would positively affect the share of other oil producers and open a direct way for competitors – primarily Saudi Arabia and Russia – to strengthen their positions. Minimisation of energy supply will be accompanied by a simultaneous increase in demand, which in the context of inflation will lead to a further rise in prices. At the same time, the economic well-being of the US manufacturing industry is called into question, given the decline in its output and the scale of the costs required to implement the proposed plan.
The energy revolution plan could, in the long term, lead to a complete transformation of economic and environmental activity in both the US and other members of the international community. However, an analysis of the strengths and weaknesses of the project over the near term suggests that the challenges facing the US administration are likely to be less than favourable.
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