Much debate and analysis has focused on what the result of the 2024 US presidential election could mean for key markets, particularly in sectors considered to be favored by one candidate or the other. Within that, the energy transition remains a key area of focus. The Democrats are generally expected to continue their support for decarbonization through measures such as the Inflation Reduction Act (IRA), limits on new oil and gas expansions, and incentives for consumers to switch to electric vehicles (EVs). Meanwhile, Donald Trump, the Republican party’s nominee, has suggested that he would strive to reverse these efforts and support oil and gas at the expense of cleaner sources of generation. As always, the details are not as clear cut as the headlines would suggest. We take a look at some of the key areas of debate and what a change in policy may bring.

It almost goes without saying that we think a Democratic victory in the 2024 election would be seen as a positive for clean technology. Given the pressure on the space throughout 2024, we would attribute this at least partially to markets pricing in some probability of regulatory changes from a Republican victory.

Conversely, a second Trump administration, especially one backed by a Republican-controlled Congress, could lead to legislative changes that might significantly hinder clean energy initiatives. Much of this is centered on the implications for the IRA.

Read more: The 2024 US presidential election’s potential impact on the energy transition | Franklin Templeton