The 2024 US Election: Navigating the Intersection of Politics and Planet

The spirit of optimism and perseverance has always resonated strongly throughout American history, capturing the essence of American resilience. From rebuilding after natural disasters like Hurricane Milton to addressing complex global challenges, the United States consistently demonstrates a resolve to overcome adversity.

As the country recovers from yet another hurricane, showing its unyielding spirit, we look toward another pivotal event—the 2024 US Presidential Elections. However, this article is not about political candidates or partisan opinions. Instead, it’s about the intersection of business, climate action, and the influence of political outcomes on both. The world’s eyes are on the US, not just for leadership in global diplomacy or economic strength, but for its role in shaping the future of climate action.

The Elections: A Global Climate Agenda

The US, as one of the world’s top two carbon emitters (alongside China), is crucial in the global climate narrative.?

The outcomes of the 2024 elections will ripple across international markets, regulations, and sustainability initiatives.?

According to data from the World Resources Institute (WRI), the US accounted for approximately 13% of global CO? emissions in 2020, which is significant for a single country. This makes its policy directions highly consequential for global carbon reduction goals.

For businesses, this means navigating new regulations, aligning with shifting trade policies, and adapting to a marketplace increasingly driven by climate-conscious consumers. While these factors are always in play, during an election year, they take on even greater significance.

Public Opinion: The Silent Force Behind Climate Action

As the saying goes, “The public knows everything.” This statement applies across cultures and countries, including in the US, where public sentiment is increasingly shaping climate policy. Data from the Pew Research Center shows that 79% of Americans support prioritizing alternative energy development over expanding fossil fuel extraction. This groundswell of public opinion is pushing environmental issues to the forefront of election platforms.

When voters demand action, regulatory bodies respond. Stricter regulations can directly affect operational costs, supply chains, and sustainability planning for businesses. However, there’s also a silver lining: companies that anticipate these shifts and engage early in climate policy advocacy stand to influence the development of these regulations. They can ensure that climate actions are balanced with business realities, fostering innovation and enhancing brand trust. According to a 2022 study by Edelman, 88% of consumers say they’ll be more loyal to a company that supports environmental issues.

Global Implications: The Domino Effect on International Climate Policy

The US elections hold a unique significance in the realm of global climate action. As a leader on the world stage, US policies don’t exist in isolation. They serve as a barometer that major economies like the EU, China, and India monitor closely, reacting to shifts in US climate priorities.

In the European Union

When the US rejoined the Paris Agreement under President Biden, it reinvigorated the EU’s climate ambitions. The EU responded by accelerating its Green Deal initiatives, which include a goal to cut emissions by at least 55% by 2030 compared to 1990 levels.

In China

China has emerged as a global leader in clean energy technologies, such as solar panels and electric vehicles. A strong climate agenda in the US could ignite healthy competition, potentially leading to a global race for clean technology supremacy. Alternatively, such policies could foster collaboration between the two largest carbon emitters.?

In India

India, the third-largest carbon emitter, looks to the US for leadership in climate financing and technology transfers. A firm US stance on global climate funding could accelerate India’s transition from coal to renewable energy, a critical shift for a country where nearly 70% of electricity is still coal-generated.?

Key Policy Areas: Energy Transition and Carbon Pricing

With each election comes a renewed focus on specific policy areas. For 2024, two critical areas for businesses to watch are renewable energy policies and carbon pricing mechanisms.

Renewable Energy: Momentum Gathers

The transition to renewable energy is gaining ground globally, and the US is no exception.?

Recent legislation like the Inflation Reduction Act (IRA) of 2022, which includes $369 billion for clean energy and climate initiatives, provides a glimpse into the future.?

Depending on the election results, businesses could see even more incentives, such as tax credits for solar, wind, and hydrogen energy development. These incentives could significantly lower operational costs for early adopters of clean energy technologies.

Carbon Pricing: Driving Innovation

Carbon pricing, whether through carbon taxes or cap-and-trade systems, could reshape industries. The World Bank’s Carbon Pricing Dashboard shows that over 45 countries already have some form of carbon pricing in place. Early adoption of carbon capture technologies or investment in carbon credits could open new revenue streams for businesses, helping them stay ahead of regulatory changes and market demands.

Business Strategies for a Climate-Uncertain Future

In this evolving landscape, businesses must prepare for various policy outcomes. Here are three strategies to ensure resilience in the face of changing regulations:

1. Scenario Planning Mapping out different potential policy directions—from aggressive climate action to more moderate approaches—can help businesses anticipate the impact on operations and supply chains. Being proactive rather than reactive allows companies to adjust swiftly when policies shift.
2. Climate Resilience Integrating climate resilience into core business strategies is not just about compliance—it’s about building long-term value. By investing in renewable energy, resource optimization, and emissions reduction, companies can turn sustainability into a competitive advantage. A CDP report shows that companies actively managing climate risks outperform their peers by an average of 18% on returns.
3. Beyond Compliance Beyond just meeting regulations, companies that prioritize sustainability will enhance their brand reputation, attract eco-conscious investors, and gain access to favorable financing. The rise of ESG-focused investing has made it clear that sustainability can directly influence access to capital. According to McKinsey, ESG-oriented assets could make up half of all professionally managed investments in the US by 2025.

Balancing Politics and Climate Action: A Strategic Opportunity

Navigating the complexities of politics and climate action can feel like walking a tightrope, but it doesn’t have to be a zero-sum game. For businesses, the key lies in strategic flexibility. Engaging now in shaping policy through advocacy, partnerships, and sustainable innovation will allow forward-thinking companies to influence the regulatory environment to be both business-friendly and environmentally responsible.

Ultimately, the future of climate action will not be shaped by governments alone. Businesses have a crucial role to play. By stepping up now, companies can help chart a path that ensures both sustainability and profitability.

Sources:

• World Resources Institute (WRI): Global CO? Emissions 2020
• Pew Research Center: Public Opinion on Energy Policies 2021
• International Energy Agency (IEA): Renewable Energy Market Update 2022
• International Renewable Energy Agency (IRENA): Renewable Energy Targets India
• CDP: Climate Risk Management and Business Performance 2022
• McKinsey: ESG Investments Growth Projection 2022