Energy Transition

(Taiwan Insight)With its threats to withdraw from the Paris Climate Agreement and its “energy dominance” agenda, the return of the Trump administration is set to disrupt the global energy landscape. This marks a sharp contrast to the climate legacy of the Biden administration, characterised by historic investments, governance innovation, and renewed international leadership. The Biden administration has implemented a comprehensive approach to address climate change through legislation, policy coordination, and international leadership. The Inflation Reduction Act (IRA), passed in 2022, allocates $370 billion in federal incentives, the largest climate-focused investment globally. The IRA mandates that 40% of the funds benefit disadvantaged communities and enforces strict environmental standards for hydrogen projects. To ensure effective implementation, the Biden administration established the National Climate Task Force, adopting a whole-of-government approach to domestic climate policy coordination. Therefore, climate change is listed as a key pillar of the National Security Strategy and Trade Policy Agenda. The Department of Treasury, for example, proposed the first Climate Action Plan in 2021. In addition to the federal level, the local climate actions were also strengthened by providing grants to support each state, Metropolitan Statistical Area, Tribe, and territories to develop priority climate plans. Internationally, Biden restored US leadership in climate negotiations, convening the Leaders’ Summit on Climate in 2021 and fostering global initiatives such as the Global Methane Pledge and the Green Shipping Challenge. Collaborations like the First Movers Coalition also mobilised private-sector support for green technologies like steel and concrete. Within the formal UN COP process, the US also played a constructive role in formalising the “loss and damage fund” and “transition away from fossil fuel” in the negotiation texts. This progress made in addressing climate change, however, faces significant challenges as Trump prepares to take office in January. The Heritage Foundation’s Project 2025, a comprehensive 900-page policy blueprint for the next Republican administration, recommends scaling back environmental regulations, expediting fossil fuel project permits, and halting clean energy subsidies. According to Energy Innovation, implementing Project 2025 could increase US greenhouse gas emissions by 27% by 2030, adding 0.04°C of warming by 2100. Trump’s appointees for key climate and energy positions signal a dramatic policy shift. Former North Dakota Governor Doug Burgum is nominated to lead the Interior Department and chair the newly established National Energy Council, tasked with dismantling the achievements of the National Climate Task Force. Chris Wright, CEO of Liberty Energy, is poised to become Secretary of Energy, while former Congressman Lee Zeldin is tapped to lead the Environmental Protection Agency (EPA). Zeldin, an outspoken advocate for energy dominance, emphasised the importance of gasoline vehicles during his nomination announcement. Domestically, Trump has pledged to halve energy and electricity prices within 18 months, aiming to achieve this by ramping up fossil fuel production on federal lands and removing utility regulations. However, experts warn that these goals are unrealistic, given the interconnected nature of global oil markets. Internationally, Trump plans to withdraw the US from the Paris Climate Agreement once again, potentially by 2026. This retreat would weaken global climate cooperation, particularly by reducing the US’s $11 billion climate finance commitment, limiting other countries’ ability to propose ambitious climate plans necessary for closing the emissions gap. For Taiwan, climate change and energy transition have played a growing role in its partnership with the US over the past four years. The American Institute in Taiwan (AIT) has supported climate expos and forums, while the 2024 Global Cooperation and Training Framework (GCTF) focused on the net-zero transition. Moreover, the U.S.-Taiwan Initiative on 21st-Century Trade includes a dedicated chapter on environmental and climate issues. Another symbolic climate moment was when President Tsai announced Taiwan should commit to Net-Zero by 2050 at a forum supported by AIT. However, starting in 2025, climate change may no longer serve as a shared priority between the US and Taiwan, creating new challenges for Taiwan’s international climate engagement. To adapt to this shifting landscape, Taiwan must conduct a strategic analysis to mitigate risks and capitalise on emerging opportunities. One key issue for analysis is the geopolitical impact of climate change. Over the past four years, U.S.-China cooperation has been crucial for advancing global climate negotiations. If the US steps back, the EU and UK may collaborate with China to stabilise the global climate regime. However, China has previously used climate negotiations as leverage in geopolitical disputes, such as suspending climate talks with the US following Nancy Pelosi’s visit to Taiwan. Taiwan must account for these risks when engaging with EU and UK leadership. Another critical issue is Taiwan’s energy relationship with the US. Currently, the US supplies 10% of Taiwan’s liquefied natural gas (LNG). While the Biden administration temporarily paused LNG terminal expansions in early 2023, the Trump administration is likely to promote increased LNG exports. This raises concerns about the “lock-in effect,” where expanded LNG infrastructure could hinder decarbonisation efforts after 2035. To address this, Taiwan should establish a clear roadmap for LNG use that balances energy security with long-term climate goals. In terms of trade, electric vehicles (EVs) and battery storage have been focal points of U.S.-Taiwan cooperation under Biden. While “energy transition” prioritises shifting away from fossil fuels toward renewable energy sources to achieve decarbonisation, “energy innovation” emphasises advancing technologies to enhance energy production and efficiency, regardless of the energy source. Under Trump, “energy transition” may lose prominence at the federal level, but “energy innovation” will likely remain a priority of their energy dominance agenda. Advanced geothermal energy, for instance, could attract significant investment. Taiwan has recently announced an ambitious target of over 3 GW of geothermal energy by 2030. By expanding its geothermal strategy, Taiwan could strengthen energy trade with the US, balancing economic ties while advancing decarbonisation goals. In conclusion, Trump’s return to the presidency could reshape the global energy landscape, challenging Taiwan to navigate a more uncertain climate policy environment. By proactively addressing geopolitical risks, energy flows, and trade opportunities, Taiwan can safeguard its climate ambitions while maintaining robust ties with the US. Dr Chia-wei Chao is the Research Director of Taiwan Climate Action Network (TCAN) and an Adjunct Assistant Professor at National Taiwan University’s Program in Climate Change and Sustainable Development.

With its threats to withdraw from the Paris Climate Agreement and its “energy dominance” agenda, the return of the Trump administration is set to disrupt the global energy landscape. This marks a sharp contrast to the climate legacy of the Biden administration, characterised by historic investments, governance innovation, and renewed international leadership. The Biden administration has implemented a comprehensive approach to address climate change through legislation, policy coordination, and international leadership. The Inflation Reduction Act (IRA), passed in 2022, allocates $370 billion in federal incentives, the largest climate-focused investment globally. The IRA mandates that 40% of the funds benefit disadvantaged communities and enforces strict environmental standards for hydrogen projects. To ensure effective implementation, the Biden administration established the National Climate Task Force, adopting a whole-of-government approach to domestic climate policy coordination. Therefore, climate change is listed as a key pillar of the National Security Strategy and Trade Policy Agenda. The Department […]