“Global Outlook: Impact of Recent Elections on Climate Policies”

In EIU’s August 2024 Global Outlook video, deputy director of industry analysis, Barsali Bhattacharya, and lead analyst for climate and sustainability, Matthew Oxenford, discuss the recent elections in six G20 economies—along with forecasts for the US elections—and their impact on climate policies.

South Africa, India, Mexico, the European Union, the UK, and France announced major election results in the first half of 2024, and there is significant anticipation around the upcoming US election. While energy and climate change issues were not a top priority for voters, these elections have affected global climate policy and caused implications for the green transition.

South Africa

As forecasted by EIU, The African National Congress saw an electoral setback in South Africa’s general election on May 29th which has led to a coalition government after 30 years in power. The country suffers from severe electricity shortages due to inadequate reserve capacity, which has led to frequent load-shedding in recent years. As such, focus on reforms to the electricity system will likely take precedence over decarbonisation efforts.

India

The coalition government led by the leader of Bharatiya Janata Party (BJP), Narendra Modi, retained a slim majority in the lower house of parliament after the general election held in April-June 2024.

Despite this, Modi’s climate policies will remain unchanged, focusing on growth over decarbonisation. India is forecast to see the biggest increase in total emissions by 2029 globally, taking over China. EIU forecasts demand for coal will continue to rise throughout 2024-33 but the government will encourage green initiatives surrounding rooftop solar, EV charging infrastructure, and hydrogen development.

Mexico

Claudia Sheinbaum of the ruling left-wing Movimiento Regeneración Nacional (Morena) won the presidency in a landslide on June 2nd. EIU expects Ms. Sheinbaum’s administration to largely continue with current energy policies, meaning that the government will continue to prop up Pemex (the state-owned oil firm) and to favor the Comisión Federal de Electricidad (CFE, the state-owned electricity firm) over private-sector producers, making slow progress on the energy transition.

The EU

The EU commissioner Ursula von der Leyen, secured a second term in the European Parliament elections in early June. The coalition of center-right, social democrats, and liberals still hold a majority, but far-right parties did gain seats on net, largely at the expense of green parties. Ursula von der Leyen will continue to rely on support from the greens, but the shift in political attitudes will push the EU’s energy policy to increasingly prioritize energy security and industrial competitiveness over new, bold climate initiatives. Green protectionism, like the CBAM carbon tariff system, will still continue, but overall ambition will be tempered.

The UK

The UK election has arguably brought the biggest changes, with the new Labour government led by Keir Starmer, promising increased public investment and planning reforms to accelerate green infrastructure and industry. By contrast, the previous Conservative government had softened many of the UK’s climate commitments. Labour’s decisive victory and the stability it brings could make the UK a more attractive destination for green investment, but huge fiscal constraints remain.

France

France’s election on July 7th produced a mixed picture with the largest blocs, the leftist New Popular Front, centrist Ensemble, and far-right National Rally, failing to secure a majority. As a result, major policy changes are unlikely to come into play until 2027, but the center and left blocs both promised expansion of renewable investment, which may still happen if a government can be formed.

The US

In the second half of the year, the US will face a presidential election, where the two major parties–Democrats and Republicans–will have drastically different approaches to climate policy. The Biden administration has pumped billions into promoting growth and investment in the renewables sector and beefing up targets and rules in the electricity, household, and EV sectors. A second democratic term will continue down this path, with an additional push on the industrial sector.

“EIU currently forecasts the Republican former president, Donald Trump, to win the election in November and with this outcome, US action on climate policies will be de-prioritized. We expect Mr. Trump to remove barriers to oil and gas production and weaken emissions legislation and subsidies for EVs and renewable energy. Internationally, a second Trump administration would also slow global action, as other countries would be less willing to commit to stronger policies if the US was opposed.” – Matthew Oxenford, lead analyst for climate and sustainability, EIU

The analysis and forecasts featured in this video are accessible through EIU’s Country Analysis service. This comprehensive solution provides unmatched global insights covering the political and economic outlook for nearly 200 countries, enabling organizations to identify potential opportunities and risks effectively.