President Donald Trump’s withdrawal from the Paris climate agreement could have “profoundly negative implications” for renewable energy generators but will not reverse the decline of coal, according to Standard & Poor’s.
A report by the rating agency – released Friday, the day after Trump announced plans to leave the Paris agreement – said the president’s decision clouds the outlook for the renewables industry, as federal tax credits past 2020 are at risk. With the onus on states to promote clean energy, liberal-leaning states like New York and California will look for ways to maintain renewables growth.
“But in other jurisdictions, the economics could now be the main driver, and market constructs could largely determine how effective renewables are in competing,” the report stated.
While Trump has highlighted the boost easing environmental restrictions will have on the coal industry, the report attributes coal’s decline during the Obama administration to the availability of cheaper natural gas.
“To the extent that these market conditions persist, we wouldn't expect the fortunes of coal, at least on the unregulated side, to improve sharply,” the report concluded.
The administration’s impact on nuclear generation is a little more complicated. Despite some environmental concerns over the technology, nuclear generators were set to benefit from the Paris agreement as well as President Obama’s Clean Power Plan due to their low carbon emissions. But other actions by the administration – specifically a review of nuclear energy’s viability and necessity that will potentially be supportive – could give nuclear a boost.