India among countries to benefit from Trump's clean energy rollback: Study

Donald Trump's proposed rollback of these initiatives could cost the US billions, and it could open up to $80 billion in new supply chain markets for international competitors like India, China, Japan, and South Korea.

In Short

• Joe Biden's clear energy policies boosted $200 billion investments
• Donald Trump plans to disincentivise solar and battery manufacturing
• India, others with clean technology capabilities could benefit from this

Donald Trump's potential rollback of clean energy measures, which could disincentivise US solar and battery manufacturing, may cost the domestic economy billions of dollars, but will open new market opportunities for countries including India, according to a new study.

The outgoing Joe Biden administration's investments, including the CHIPS Act, the Bipartisan Infrastructure Law (BIL), and the Inflation Reduction Act (IRA), have generated over $200 billion in clean energy investments in the US. These measures have also been pivotal in repositioning the nation within global clean energy supply chains and strengthening domestic manufacturing capabilities.

According to a report by the Net Zero Industrial Policy Lab at Johns Hopkins University, Trump's proposed rollback of these initiatives could cost the US billions, resulting in the loss of factories, jobs, tax revenue, and up to $50 billion in lost exports.

The report further notes that countries with established clean technology manufacturing capabilities are well-positioned to capitalise on US market demands if domestic manufacturing declines. This could open up to $80 billion in new supply chain markets for international competitors like India, China, Japan, and South Korea.

The report highlights that India stands to benefit from the US’s potential policy shift in areas such as electric vehicles, solar, and wind energy sectors. China, another competitor, is also expected to gain, particularly in these sectors and the field of battery production.

“This would severely damage US ability to develop and scale next generation technologies, effectively stymying the best hope for the US to gain a competitive footing with China. Without these investments and tax credits, US industry will be hobbled just as it is getting going, ceding the ground to others,” the report mentioned.

Over 45 percent of the Inflation Reduction Act (IRA) investments in the US have already come from foreign companies, highlighting the global interdependencies within clean energy supply chains.

Domestically, according to the report, a complete repeal of the IRA might be politically challenging for Trump due to bipartisan support for clean energy investments, even among Republicans, given the significant investments made in their districts.

However, if a retreat does occur, the US could fall behind in the race for clean technology leadership, potentially repeating history when American cleantech companies faced bankruptcy due to market uncertainties and intense competition from Chinese firms.

Researchers Bentley Allan and Tim Sahay emphasised that US leadership in clean technology is crucial not only for domestic growth but also for maintaining a competitive edge in the global market. The report further noted that a policy retreat could have far-reaching negative effects on US economic health and technological advancement.