Energy politics in the year of record elections [Gas in Transition]

This is a critical year of elections globally, and energy politics is expected to play a major role. In a world record, 64 countries (see figure 1), representing more than half the world’s adult population and more than 60% of global GDP, are headed to the polls to vote for new governments or legislatures. These include eight out of the 10 most populous nations. Prominent among them are the US, Europe, India, Indonesia, South Africa, the UK and even Russia and Iran.

Following a turbulent 2023, marked by wars, conflicts, increasing tension between the US and China, climate catastrophes and increased migrant and refugee flows, could these elections bring positive change that would contribute to solving the world’s problems? Will democracy be reinforced or will it be challenged even more? Whatever the outcomes are, they will have a major impact on global geopolitics. Some have dubbed it as the most critical year for the future of democracy.

Since Russia’s invasion of Ukraine the world has witnessed increasing polarisation, deglobalisation, a shift to authoritarianism, worsening climate conditions and energy crises. Would changes in government mean a change of direction? Would new leaders with new mandates be able to steer the world back on the track of progress and cooperation? 

Climate change and energy security and flows have roles to play as electoral issues, as countries seek to bring the cost of energy down, curb their emissions and return to economic growth. In terms of climate and energy-related politics, the elections that stand out most are the presidential elections in the US, the Euro elections and legislative and executive elections in India and the UK.

US presidential election

The November 2024 US presidential election may arguably be the most divisive and most consequential election in the world and the most important for energy. It touches the full range of global issues. The likely return of ex-President Trump is causing jitters more or less globally, but particularly within the US and in Europe.

A second Trump term would see the new administration substantially dismantling President Biden’s energy-related legislation, repealing as much of the Inflation Reduction Act (IRA) as possible and stepping back on commitments to combat climate change. His America First policy would also favour oil and gas companies, with a focus on maximising oil production and LNG exports.

However, a Trump victory would also strain and reshape US-EU cooperation on all bilateral issues, most importantly regarding NATO and Ukraine. Under a Trump presidency, US support for Ukraine will be in doubt. He has already hinted that he would halt or drastically reduce support to Ukraine. His skepticism about NATO is well known. If the Gaza war remains unresolved by then, it might become more dangerous and could affect regional energy flows.

Driven by election pressure from within his own party, and the need to differentiate his policies from Trump’s, President Biden is playing up his green credentials. He has brought John Kerry into his campaign team for that purpose.

Under pressure to rein in fossil fuels, Biden is reconsidering the expansion of US LNG exports, likely through the introduction of tougher climate criteria when approving new projects. Environmental groups are arguing that the boom in LNG exports is incompatible with US climate commitments. A government panel has already convened to develop appropriate policy recommendations. 

This is worrying for Europe that depends on US LNG to meet its energy demand and keep gas and electricity prices stable. It is an example of how US policy priorities create problems for Europe. Should Trump win the election there will be much more of this.

Fossil fuel expansion is becoming a critical election issue, with Trump for it and Biden against it. This is seen as the defining energy policy battle of 2024. 

Euro elections

Climate and energy will be high on the agenda in the run-up to the European Parliament elections in June. The elections will lead to the appointment of a new European Commission that will shape EU climate and energy policies to 2030.

Europe is still struggling with the consequences of the energy crisis, high energy and food prices, high inflation and high interest rates. These are being exploited by populist and far-right parties that are on the rise, especially in Germany, France and Italy. Polls indicate that they will make substantial gains in the European Parliament elections in June, with the right-wing block expected to have a blocking majority. 

These elections are likely to change the direction of EU priorities and influence EU’s policy stance on issues such as climate change and energy. There are already calls that after the elections, EU environmental policies should be based on “pragmatism.”

With time running out to complete outstanding legislation around the Green Deal and climate change, priorities in Europe are already changing ahead of the elections. The European People’s Party (EPP) – Ursula von der Leyen’s party – is campaigning against green policies, calling for a moratorium on new green laws. Its draft manifesto rejects a combustion engine ban, vowing to change it as soon as possible.

Coupled with this, persisting high energy prices are contributing to the EU's industrial decline.

During the run-up to the elections the debate about climate change and green policies is expected to become fierce. And if von der Leyen gets reappointed president, and pushes to enact ambitious green legislation, the new commission may face a clash with reality. As Politico points out, “the disconnect between what Europe’s biggest parties are ready to do to slow down global warming, and what scientists say is necessary, is growing.” With the price tag, estimated to be about €1.5 trillion ($1.6 trillion) between 2031 and 2050, for the EU to meet its net-zero target, member state support may no longer be guaranteed.

Concerned about a backlash in the run-up to the elections, last year European leaders, including President Macron and Belgian Prime Minister Alexander De Croo, called for a “pause” in climate legislation.

With elections looming, farmers have been attacking environmental regulation. According to the Financial Times, protests have been spreading from the Netherlands to Belgium, Germany, France and Romania. The political implications of forcing consumers and businesses to change their habits will feature strongly in an election year in Europe.

India

Prime Minister Narendra Modi has a strong lead and looks set to come back stronger after the elections between April and May 2024 – 78% of Indians surveyed late November expressed approval of his performance. 

He has been maintaining a balancing act between Russia and the US. He refuses to condemn Moscow, following its invasion of Ukraine, for strategic reasons and energy imports. India has been benefiting from sanctions on Russia by being one of the biggest importers of cheap Russian oil.

Under Modi, India has been expanding wind and solar power, but it still relies heavily on fossil fuels for its energy, continuing to build new coal power plants. Even though at COP28 he talked about the urgency of acting to reduce global warming, Modi put most of the blame on the developed countries, especially the US and Europe, that “have produced the most emissions in historical terms.”

At Davos in January, India emphasised that its growing population and rapidly rising energy demand require a delicate balance between economic advancement and environmental responsibility. “For a country like India, which now has the largest population in the world, it requires a transition to sustainability without jeopardising or undermining the need to deliver basic welfare to a large and growing population.”

Modi also strongly defends the right of the Global South to prioritise development and energy security ahead of climate change. As a founding member of BRICS, India supported its expansion facilitating increased commerce and bypassing sanctions, especially in the supply of oil and LNG.

The economic development of India is a key issue in the forthcoming elections, with energy playing a major role. Economic prosperity will require more energy. India’s electricity consumption per capita is way lower than that of its peers (see figure 2). Until that imbalance is addressed, India will need all the energy it can get, including from coal.

As the country heads into elections, Modi is keen to avoid any risks of power shortages and maintain economic growth.

UK

Among European countries, the UK elections are probably the most important. It is expected that the incumbent Conservative government will lose, ushering in a Labour government. Already energy appears to be one of the key issues that prime minister Rishi Sunak has chosen to differentiate Conservatives from Labour. He believes that he can gain votes by delaying green action not popular with voters.

Conservatives are backtracking on green policies. Sunak said he will not support efforts to decarbonise faster than other countries. He said “When our share of global emissions is less than 1%, how can it be right that British citizens are now being told to sacrifice even more than others?” An argument that other countries are also using.

The Conservatives have voted for new legislation designed to force mandatory annual licensing rounds to expand North Sea oil and gas exploration and production well into the future. They are also delaying the roll-out of electric vehicles and heat pumps to replace combustion engines and gas boilers – another popular measure.

Preparing for elections, Labour believes that promoting its green credentials gives it an advantage. Through its “Green Prosperity Plan” it is banking big on energy transition, increasing wind power and expanding the UK’s grid system to accept more renewables. It hopes that this will unlock £200bn ($254bn) in new investment in green energy. Shadow minister for energy security and net-zero, Ed Miliband, said that “Labour would double onshore wind, triple solar and quadruple offshore wind” if elected.

Climate change an election issue

In an election year, more and more politicians are promising to roll back unpopular green measures. 

Opinion polls show that in general voters consider climate change as an important issue. But more often than not attitudes change when faced with policies that affect their lives and cost them money.

A YouGov survey in Europe showed that many Europeans want climate action, but less so if it changes their lifestyle. 

Populist parties take advantage of this, promising to soften climate-related policies, if elected. 

In 2023 Geert Wilders in Holland and Javier Milei in Argentina showed that opposing action on climate change can be a winning formula.

That’s why the latest recommendation from EU’s Scientific Advisory Board on Climate Change (SABCC) to target a 90% cut in emissions by 2040 will become a hot election issue. As will be its recommendation that “additional [green] measures are imperative if the EU is to achieve its climate neutrality objective by 2050 at the latest.” 

The SABCC correctly recommends that “a just and fair transition is needed to maintain public support for climate action.” This applies globally.

Many of the elections this year may lead to change in leadership and change of direction. Whatever the outcomes are, political change is likely to re-shape the global future and the balance between energy security and tackling climate change.

The geopolitical landscape that will emerge following these elections will dictate the pace of energy transition, but also global energy flows and trade routes.