We have crossed the halfway mark in 2024, a year considered the busiest election year in global history. Nearly 4.2 billion people, half the world's population, have either voted or will vote this year to elect their leaders and governments. These include South Korea, Sudan, South Africa, Venezuela, France, Belgium, Mexico, and others. We, in India, voted and created history by electing the Bhartiya Janta Party for a third consecutive term. Now, all eyes are on the outcome of the US elections, one of the last countries to vote later this year.
The outcomes of the elections are varied - some political parties have retained power, although with slender margins of victory. People in some nations voted for change and elected the opposition party with a resounding majority. In July, the UK witnessed the Labour Party record a decisive victory over the Conservatives, who had ruled for three consecutive terms. Across Europe, far-right parties made their presence felt. In Asia, countries like South Korea and Indonesia saw the opposition gain control, while Taiwan voted for continuity. In Africa, Senegal ended decades of coalition dominance, and South Africa's African National Congress lost the parliamentary majority for the first time since apartheid and had to settle for a coalition government. The Venezuela elections, held recently, saw the incumbent leader retaining power.
How is all of this likely to affect global energy transition? There are four major trends visible so far
Continued strong climate action in major developing economies: With abundant resources, ambitions of energy independence, and popular administrations with substantial nationalist strains, countries like India, Indonesia and South Africa share similar characterstics. They have been aggressive on clean energy deployment and are likely to continue to do so under newly elected regimes. The Union Budget presented by India's Finance Minister suggests the continued support of the central government for decarbonization and renewable energy roll-out. South African President Cyril Ramaphosa has signed into law a broad climate change act that will set caps for large emitters and require every town and city to publish an adaptation plan. In Indonesia, President Subianto has adopted his predecessor’s decarbonization targets and its RE infrastructure commitments, though he has also imposed further critical mineral export restrictions to drive domestic battery production.
Implementation risks to the EU’s ambitious climate legislations: The EU parliamentary elections represent the composite of some of the largest economies in the world and, in particular, many of the economies generating the most momentum for decarbonization. While the left-leaning coalition responsible for a recent bumper package of transition-related legislation (Green Deal, Carbon Border Adjustment Mechanism, Net Zero Industry Act etc) retained its majority, the Center-right and nationalist far-right parties surged in polls, substantially weakening the political mandate of the winning coalition. Their voter bases are farmers and heavy industry representatives, who have been advocating for dilution or rejection of EU’s clean energy, nature restoration, and EV legislations. While they do not have enough political support to diminish efficacy of the legislations, they may delay implementation by finding loop-holes during review periods. Some of this is already evident as the EU debates its new hydrocarbon exploration and production sector policy.
Strong revival of the nuclear industry: A surge in interest and investment in nuclear is evident. Canada, going into elections in 2025, is undertaking USD 20 billion of capital spending towards extending the lives of its various nuclear facilities. Britain's new labour government has said small nuclear plants will play an important role in helping the country meet its net zero targets. Russia, which dominates the global nuclear supply chain through its mammoth state-owned nuclear power company, Rosatom, has been continuing to build nuclear plants within its territory and is signing agreements to do so in other countries, including central Asia, India and Turkiye. President Putin, re-elected, has publicly endorsed continuity of this approach. Brazil’s recently published 2050 national energy plan indicates that it could add 10GW of nuclear in the next 30 years. Mexico’s state-owned electric utility CFE has been actively involved in discussions and evaluations on exploring feasibility of Small Modular Reactors as part of its strategy to achieve Mexico’s broader energy transition goals. India has announced substantial resources for research on Small and Modular reactors.
International collaboration remains vital, but geopolitical fractures are growing: Climate action continues to need strong international collaboration, particularly to mobilise the $4-5 trillion per annum climate finance, ratchet up collective ambition to meet the 2030 temperature target and infuse capital and momentum to step up mining and processing of critical minerals. The re-election of Vladimir Putin in Russia for the fifth time means possible further alienation from the international community and continued presence in Ukraine. Schisms between the US and EU countries on one side and China on the other side are rapidly growing, with most recent incidents of additional tariff barriers being imposed on Chinese made electric vehicles.
The big unknown this year is the outcome of the Presidential election in the US. The election date is just a week ahead of the beginning of UNFCCC COP29, the outcome of which will depend significantly on how the US participates in it. The Harris and Trump campaigns are taking radically divergent positions on issues such as climate financing, oil and gas protection, international climate engagement, etc. Presidential nominee Trump and the Republican party have also announced intent to repeal the Inflation Reduction Act, which if done, will be a big blow to global climate action.
Overall, at this juncture, the global political situation presents a mixed bag of opportunities and risks. There is a lot of positive action ranging from a projected USD 2 trillion investment in clean energy as per the IEA to a wave of deals being signed between nations on critical minerals. There isn’t a fundamental shift visible so far in the trajectory and speed of energy transition due to election outcomes, but the acceleration needed to meet the 2030 targets isn’t evident either. This is a cause of concern. Climate action requires a collective effort, and Governments around the world are the lead players. The new Governments need to step up their game on climate action, for the planet to effectively tackle this existential threat.