Trump's return: Repercussions for India’s energy security and climate commitments

Posted on 11 Nov 2024

Donald Trump’s renewed focus on fossil fuels poses complex challenges and opportunities for India’s energy security and climate commitments. Trump’s pro-oil stance and potential rollback on climate finance could impact U.S.-India renewable energy collaborations, compelling India to seek alternative international partnerships and bolster its domestic green policies. While Trump’s policies may create favourable conditions for India’s short-term oil imports, they threaten the global momentum toward clean energy, affecting India’s ambitious renewable targets. However, India’s commitment to green energy remains resilient, with initiatives like the International Solar Alliance(ISA), the Production Linked Incentive (PLI) scheme, and investments in solar, wind, and green hydrogen (GH) positioning India as a global leader in sustainable development. By fostering alliances with nations prioritising climate action and enhancing domestic renewable infrastructure, India can counterbalance these challenges and strengthen its green transition.

As the global climate narrative increasingly emphasises a shift to cleaner, renewable energy sources, Donald Trump's recent U.S. election victory has sparked renewed concerns among environmentalists and energy analysts. His ‘America First’ energy policy, focused on bolstering the fossil fuel sector, starkly contrasts with current international climate goals, which seek to reduce greenhouse gas emissions and advance a green transition.

For India—a major player in renewable energy development and the world’s third-largest emitter of greenhouse gases—Trump’s fossil-fuel-centric policies present unique challenges alongside some unexpected opportunities. This article examines the multifaceted implications of Trump’s energy stance on India’s climate commitments, energy security, and economic future, exploring how India can strategically navigate the shifting global energy landscape.

Trump’s fossil fuel revival and the global green shift: Donald Trump’s approach to energy policy remains deeply rooted in traditional energy sources, with an emphasis on expanding oil, gas, and coal. During his previous term, Trump made substantial changes to U.S. energy policy, repealing numerous environmental regulations, championing fossil fuel expansion, and withdrawing the United States from the Paris Agreement—a landmark climate accord aimed at limiting global warming to well below 2°C. By prioritizing fossil fuel industries, Trump’s policy vision centres on deregulating these energy sources to make domestic energy more affordable, which may slow the global shift toward cleaner energy.

The resurgence of pro-fossil fuel policies under the Trump administration could impact India’s energy and climate landscape in several ways. For instance, U.S.-India collaboration on renewable energy initiatives — previously supported through bilateral agreements and technology-sharing partnerships — may face reduced support. This shift might compel India to reassess its climate commitments and adjust its strategy to compensate for diminished international cooperation. Furthermore, as U.S. oil production ramps up, global oil prices could fluctuate, potentially affecting the cost of India’s oil imports and influencing its broader energy policy.

India’s energy landscape: Balancing growth and sustainability: India’s energy strategy represents a careful balancing act between economic growth and environmental sustainability. As one of the fastest-growing economies, India’s energy demand is on a steep rise, with a significant portion of its energy mix still reliant on coal, oil, and natural gas. While these sources have been essential for industrialisation and economic development, India is also making substantial strides in renewable energy. The country boasts abundant solar and wind resources, positioning it well to achieve its ambitious target of 500 GW of renewable capacity by 2030.

Programmes such as the Jawaharlal Nehru National Solar Mission (JNNSM) exemplify India’s commitment to a cleaner energy future, driving solar energy growth and attracting global investments in renewable infrastructure. However, Trump’s policies could create obstacles.

With his administration likely deprioritising climate action, international financial flows and technology support for renewable projects in developing nations may dwindle. This could lead India to reconsider the pace and scale of its green transition. Meanwhile, increased U.S. fossil fuel production might make coal and oil more accessible and affordable, potentially complicating India’s efforts to shift its energy mix toward renewables. Policymakers will need to weigh these factors carefully as they strategise India’s path forward.

The role of climate finance and technology transfer: International climate finance and technology transfer are essential pillars of India’s renewable energy expansion. As a developing nation, India frequently advocates for ‘climate justice,’ arguing that countries historically responsible for higher emissions should contribute more to global climate finance and technology sharing. Over the years, the US has played a central role in supporting these efforts by funding renewable projects and facilitating technology-sharing agreements with countries like India. However, if Trump’s administration cuts back on climate finance initiatives, it could limit India’s ability to attract funds for its large-scale renewable energy projects.

The potential reduction in international financial support poses a risk to India’s renewable goals, as it may shift the financial burden to domestic sources. This could, in turn, increase the cost of renewable energy projects, making them less competitive with conventional fossil fuels. Faced with reduced support, India might have to delay its renewable targets or seek alternative sources of investment. This could involve exploring partnerships with other nations committed to climate action, such as the European Union, Japan, or even China. The loss of U.S. funding may also prompt India to further incentivise domestic investment in renewables to offset the deficit.

Energy security: Navigating geopolitical realities: India’s energy security is critically dependent on maintaining a diverse energy portfolio and stable international partnerships. With around 80% of its oil needs sourced through imports, India is highly vulnerable to global oil price fluctuations, which have significant repercussions on its economic stability.

Trump’s policies could have a dual effect on India’s energy landscape: while increased U.S. oil production could lead to short-term price stabilisation, a sustained boost in fossil fuel production worldwide might delay critical investments in renewable infrastructure.

Although Trump’s pro-oil stance could allow India to negotiate import deals at more favourable rates, an over-reliance on fossil fuels would ultimately compromise India’s sustainability goals. Renewable energy, particularly solar and wind, offers a more sustainable and stable path for India to reduce its dependence on the volatile fossil fuel market.

Additionally, a long-term investment in renewables could enhance India’s energy security by lessening its exposure to geopolitical risks associated with oil and gas imports, such as price shocks from conflicts or disruptions in oil-producing regions.

India’s commitment to a green future: Domestic perspectives: Despite the challenges posed by Trump’s administration, India’s commitment to renewable energy remains robust. Prime Minister Narendra Modi has repeatedly emphasised India’s responsibility in the global green transition, setting ambitious renewable energy targets and positioning India as a leader within the International Solar Alliance (ISA), an organisation uniting nations in their efforts to scale solar power.

India’s burgeoning renewable sector has created a wealth of economic opportunities, spurring job creation and reducing urban pollution levels. Public support for renewable energy is growing, driven by heightened awareness of the environmental and health benefits associated with clean energy sources. Even as Trump’s policies threaten to alter the global energy landscape, India’s renewable sector has the potential to continue flourishing with the right domestic policies and incentives in place. By advancing investments in solar, wind, and emerging technologies like green hydrogen, India can continue to reduce its greenhouse gas emissions and mitigate the impact of Trump’s climate rollbacks on a global scale.

Geopolitical implications: The China factor and clean energy race: Trump’s fossil-fuel-friendly policies could shift the balance of power in the global clean energy landscape, with China positioned to become a more influential player in the absence of U.S. leadership on climate change. Both India and China have historically relied on coal for energy, but both countries are also actively working to diversify their energy portfolios with renewable sources. While China’s Belt and Road Initiative (BRI) has primarily funded fossil-fuel-oriented projects across Asia and Africa, it also includes a range of renewable energy investments, underscoring China’s evolving role in the clean energy race.

India’s strategic rivalry with China could be a powerful motivator for India to ramp up its renewable efforts, particularly as both nations compete for influence in the Indo-Pacific region. With a potential void in U.S. climate leadership, China may seek to expand its export of solar and wind technology to India. While such partnerships could deepen economic ties, India may also see dependence on Chinese technology as a strategic risk, prompting it to strengthen alliances with the European Union, Japan, and other like-minded partners. Navigating this complex geopolitical landscape will be crucial for India’s energy future.

Strengthening India’s domestic green policies: To navigate the uncertainties posed by Trump’s fossil fuel agenda, India must bolster its domestic policies to ensure the resilience of its green transition. Focusing on scaling up renewable infrastructure and incentivising domestic manufacturing of solar panels and wind turbines will be essential to building a self-sufficient green industry. Programmes like the Production Linked Incentive (PLI) scheme, which aims to promote local manufacturing, play a vital role in developing this industry.

Investment in energy storage and grid modernisation is also crucial for overcoming the intermittency challenges associated with renewables. By investing in advanced storage solutions and modernising grid infrastructure, India can enhance grid stability as solar and wind become larger components of its energy mix. Additionally, policies promoting energy efficiency in urban planning and industrial operations can help reduce overall energy demand, making it easier to achieve renewable energy targets.

A resilient green path for India: Trump’s fossil fuel agenda presents both challenges and opportunities for India’s energy future. While a pro-fossil fuel U.S. administration may decelerate global climate efforts, India’s commitment to renewable energy, combined with its strategic alliances, can help it stay on course toward a sustainable energy future. By prioritising domestic green manufacturing, investing in grid infrastructure, and fostering international partnerships, India can mitigate the impact of Trump’s policies while advancing its renewable transition.

India has the potential to emerge as a global leader in sustainable development. With a resilient and forward-looking approach, India can exemplify how economic progress and environmental stewardship could coexist. As a leading voice among developing nations, India’s commitment to a cleaner, greener world should remain firm, even in the face of global headwinds.

Kindly follow us for updates on:

LinkedIn