(With Donald Trump returning to the U.S. presidency, the international spotlight is once again focused on the White House. Queen’s Law experts share their insights on how the new administration’s policies could impact Canada and the world. In the second installment of this three-part series, Professor Cherie Metcalf explores the implications for climate policy.)
Donald Trump’s return to the U.S. presidency promises a sharp turn in climate policy. During his campaign, Trump referred to climate change as a “hoax” and pledged to withdraw the U.S. from the Paris Agreement, promote the US energy industry and roll back Biden-era climate initiatives.
Canada has aligned closely with U.S. policy under the Biden administration. In 2022 Congress passed the Inflation Reduction Act (IRA), which provided significant federal incentives for transitioning away from fossil fuels. It introduced subsidies and tax credits to support renewable energy development, clean energy technology and electric vehicles (EVs). Canada has followed suit, for example with EV incentives, substantial investments in vehicle manufacturing supply chains and critical mineral development policies. Canada also announced Clean Electricity Regulations in December 2024 to reduce emissions from energy generation.
Canada’s signature GHG Pollution Pricing Act is not reflected in U.S. policy – although Biden used a “social cost of carbon” in federal cost-benefit analysis and the IRA required a price for methane emissions from oil and gas facilities. Despite Biden’s public commitment to climate action, the U.S. has become the world’s largest producer of oil and exporter of liquified natural gas (LNG). More recently, Biden restricted new LNG exports, reflecting a cooling attitude toward oil and gas development due to their climate impacts that is also reflected in Canada’s federal policy.
Trump’s presidency is expected to disrupt these efforts and reshape U.S. policy, with significant implications for Canada.
Major policy shifts:
- International climate regime: Trump has promised to withdraw the U.S. from the Paris Agreement using executive authority. Some experts fear he may go farther by attempting to exit the UN Framework Convention on Climate Change treaty. This would require Congressional support and would make future re-entry by the U.S. into the international regime much more difficult. The absence of the U.S. from international climate efforts would send a strong signal the country is uninterested in action or cooperation on climate change.
- Shift to renewable energy / energy transition: This was highly incentivized by the IRA. Trump campaigned under the slogan “Drill, baby, drill,” and has pledged to have Congress repeal the IRA, and to expand fossil fuel development within the U.S. with the goal of halving energy prices. He intends to reverse Biden’s pause on LNG exports and open more federal land for oil and gas exploration and development, including the Arctic National Wildlife Refuge. His nominees – Lee Zeldin to head the EPA, Doug Burgum as Secretary of the Department of the Interior and Chris Wright to head the Department of Energy – are all strong supporters of the oil and gas industry.
- Power plant standards: The shift to clean(er) energy has been an important aspect of U.S. environmental policy under Democratic administrations. Lengthy development efforts have been undertaken by the EPA to regulate power plant emissions, with final rules adopted in 2024 requiring reductions in GHG emissions, including through carbon sequestration. Trump is likely to try and roll back these rules.
- Electric vehicle “mandates”: Federal legislation has facilitated a transition to EVs. California (CA) had a federal exception under the Clean Air Act that allowed it to eliminate the use of internal combustion engines by 2035 as part of strict emissions standards, which other states had agreed to adopt. Trump has promised to “end” EV mandates and could try to revoke CA’s exemption. He is also likely to roll back enhanced Biden-era EPA vehicle emissions standards and average fuel efficiency standards approved in 2024.
- Environmental, Social & Governance (ESG) factors in business and investment regulation: Trump’s federal government is hostile to “woke” mandates related to the ESG movement. This is likely to feed back into U.S. Securities and Exchange Commission efforts to adopt rules requiring climate disclosures by public companies. The SEC’s 2024 rules requiring mandatory climate risk and GHG emissions disclosure will likely be repealed. Trump has also suggested eliminating a Biden-era rule allowing pension administrators to consider ESG factors within the scope of their fiduciary duty. Large banks and companies have withdrawn from voluntary climate initiatives in response to Trump’s election.
How will these shifts affect Canada?
Trump’s ideas for change can exceed the reach of his legal authority at times. While he can direct agencies such as the EPA and Departments of Energy or the Interior to adopt new policy directions, finalized rules adopted under legislative mandates require complex and lengthy processes for revision under the US Administrative Procedure Act. This includes public notice and comment periods, and often opportunities for litigation of proposed rule changes.
Some of the shifts above will take time to materialize. Those that require Congressional action may lack the required support. For example, much of the development and investment in US renewables under the IRA has flowed to Republican states. It is not clear that these states will want to eliminate the IRA. Abandoning EV mandates is a policy position at odds with the interests of Elon Musk – who will serve in an influential new role leading the “Department of Government Efficiency” under Trump.
However, while the speed and extent of Trump’s policy shifts remain to be seen, what is clear is the desired direction AND increased uncertainty in any support for climate action. This will create economic and political pressure on Canada’s commitment to our own climate policies. It will complicate efforts to harmonize U.S. and Canadian approaches - for example, in relation to standards for corporate climate disclosures, vehicle emissions standards and EV mandates, and reduction of emissions from fossil fuel energy generation. Strong U.S. support for its fossil fuel industry will create pressure to permit Canadian regions to develop their own energy resources. Increased pressure to abandon GHG pricing in Canada is also likely considering Trump’s proposals. Our close economic ties and dependence on access to U.S. markets makes it difficult for Canada to maintain divergent climate policy. Navigating the shifts in U.S. climate policy will be a challenge for Canadian governments under Trump’s presidency.
Professor Cherie Metcalf, Associate Dean for Research, specializes in law and economics, international environmental and resource law, public law, and constitutional law. She is the recipient of an Insight Grant from the Social Sciences and Humanities Research Council of Canada for her project on “Institutions for Effective Climate Change Action” and a grant from the Canadian Foundation for Legal Research for her project on “Climate Change and Canada’s Constitution.” In December 2023, she co-organized a conference “Institutions for Effective Climate Action: An International & Comparative Perspective,” bringing together legal scholars from Canada and the U.S. Podcasts from each panel are available on the Queen’s Law website.