Nobel Prize-winner Joseph Stiglitz warns of risk of abrupt shift in US energy policy

US energy policy faces a potential parting of the roads as the country braces for elections in November, Joseph Stiglitz, the Nobel Prize-winning economist, warned.

While the outcome of the vote still looks evenly poised, a win for former President Donald Trump would mark a “bifurcation” in the country’s stance on energy, Stiglitz said at the Energy Prospectives series of expert discussions hosted by the Naturgy Foundation and IESE Business School.

Also speaking with him at the event at IESE’s Madrid campus was José Manuel Durão Barroso, a former president of the European Commission. The panel was moderated by IESE economics professor Jordi Gual.

Trump, with his outspoken skepticism about climate change, has been drawing support from the fossil fuels industry, while expectations that he will lower taxes has won him backing from some in the financial sector, Stiglitz told the event. “There will be a marked change in policy,” should Trump win the November vote, he said.

There are some factors that could limit what Trump could do in office to roll back progress toward cleaner energy in the US, Stiglitz said. For one thing, massive green subsidies will prove hard to repeal, even in Republican states, he told the forum.

At the same time, the US has long placed punitive tariffs on Chinese equipment such as solar panels that would have made the green transition cheaper to achieve. Paranoia about the growing might of China has meant the US has put economic and geopolitical strategy before the pace of progress towards greener sources of energy, according to Stiglitz.

Climate change is a long-term phenomenon that is already having economic effects, including, for example, an impact on real estate, he said. It’s incumbent on governments to also count the economic and social cost of not doing enough to stem global warming, according to Stiglitz.

European perspective

Durão Barroso, meanwhile, gave an overview of the European Union’s often lonely quest to deliver on its commitments to tackle climate change in the face of the reluctance by the US and major powers such as China to follow suit.

Durão Barroso said he remained pessimistic about progress toward a global climate agreement and noted that recent protests by farmers and the reversals suffered by Green parties in recent European elections show the region is also not immune to a backlash against its climate goals. A victory for Trump in US elections would deal a fresh blow to efforts to seek a united international front to press ahead with the green transition, he said.

Both speakers shared the view that technological progress including the use of artificial intelligence could provide some of the solutions to global warming. Durão Barroso said he was a believer in the power of science to change outcomes.

Even so, the US elections in November could represent a major fork in the road.

“With Trump, it will not be America First, it will be America Alone,’’ Barroso said. That’s “bad news’’ for all those who believe in a multilateral response to the world’s climate challenges, he said.