President-elect Donald Trump’s administration may slow global policies to support the energy transition to a low carbon system “but it will not scuttle it”.
That’s because climate policies will keep chipping away at fossil fuels’ role as the main global energy source, according to a report by the Economist Intelligence Unit (EIU).
The comment follows Mr Trump’s pledge to support the fossil fuels industry – creating fears over renewables and climate change goals – and cancel the Paris deal.
The report states it will be difficult for him to disentangle the US from the Paris Agreement now that it has already come into force.
However, the EIU suggests there will be some global impacts as a result of Mr Trump’s new energy and climate policies as it could affect the US and China’s co-operation.
Despite this, the EIU doesn’t believe the global trend will be reversed because China, India and the EU are expected to follow through on policies designed to cut emissions next year.
Furthermore, the cost of solar, wind and batteries for electric vehicles are forecast to drop, thanks to new policies in line with the Paris Agreement, it adds.
The EIU expects Brent crude will average at $56.5/barrel (£45.2/bbl) in 2017 and natural gas and thermal coal prices will show “modest increases”.
Production of liquefied natural gas (LNG) is expected to surge in the US and Australia. However, stronger consumption growth of 2% in 2017, accelerating from 1.5% in 2016, means LNG prices will climb, the report adds.
It states: “Despite low fossil fuel prices, in 2017 the effect of advances on the environmental policy front, most notably the ratification of the Paris agreement, will gradually filter through. Globally, the spread of policy drivers as well as the falling costs of solar and wind power, will ensure that the decarbonisation of the energy system continues. However, the extent to which Mr Trump reverses the momentum of the Obama administration on green issues will be a key development to watch in 2017 and beyond.”