The signal sent by the market on climate during the debate

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When President Biden entered the White House in 2021, before his administration had drafted new regulations or signed landmark climate legislation, I wrote that his presidency had already advanced efforts to combat climate change simply by sending a signal to the market that fossil fuels were not the future.

That signal came through in policy plans, campaign statements, and finally, an executive order he signed days into his presidency that called on officials across government to put climate change at the heart of policymaking. And almost immediately, businesses responded, adjusting their strategic plans to reflect a more climate-friendly policy outlook from Washington.

This year’s political cycle has not been rich in climate promises or campaign platforms. Indeed, some of the most in-depth discussions about climate and energy took place in a few minutes during Tuesday’s presidential debate. While the discussion lacked specifics, it offered an interesting opportunity to assess where climate policy and, to some extent, the market might be headed.

It’s worth starting with Vice President Kamala Harris. In 2019, she presented herself as a progressive with bold climate commitments, including a $10 trillion climate spending proposal and support for the Green New Deal policy agenda. As a result, even some of Biden’s most skeptical climate activists were willing to rally behind her in the hopes that she would pursue ambitious new environmental agendas.

During this week’s debate, she didn’t bring much new to the table on climate. Instead, she emphasized continuity, touting the Biden administration’s Inflation Reduction Act (IRA) — the largest climate bill in this country’s history — and calling for continued investment in clean-tech manufacturing. “We’ve invested in clean energy to the point where we’re opening factories all over the world,” she said.

In other words, she has presented herself as a candidate for climate continuity rather than as an advocate for a broader policy agenda. Continuity may not necessarily be something you can put on a T-shirt, but it would nonetheless help deploy clean technologies. The Biden administration spent two years crafting the rules for implementing the IRA, including creating programs that investors and developers have come to rely on. Just knowing that those rules will remain in place can help stabilize the market. That doesn’t necessarily mean she won’t have anything new to propose on climate if she were to become president. For one thing, some policy revisions might actually be helpful in improving the IRA’s implementation.

She also promised continuity in oil and gas, saying that “we need to invest in diverse energy sources to reduce our dependence on foreign oil.” The statement disappointed environmental activists who had hoped she would take an aggressive stance on the industry. But it also reassured energy watchers that she has no intention of wreaking havoc on oil markets while the world is still in transition.

Former President Donald Trump, meanwhile, was even less forthcoming about his climate plans. He avoided talking about climate change when asked about it, instead using the opportunity to talk about his plan to impose tariffs on Chinese imports. “What they’ve given China is incredible,” he said. “We’re going to put tariffs on these cars so they can’t come into our country.”

It’s a telling answer. The Biden administration is currently trying to find common ground with China, hoping to encourage the creation of a domestic clean energy supply chain in the long term while relying on Chinese imports in the short term. Trump’s program would end this, by reorganizing supply chains, capital investments, and strategic planning. All in all, the domestic deployment of clean technologies would be tricky, with the products essential to the transition absent from the American market.

The climate debate has offered only a glimpse of the relevant climate issues. Yet watching it, it’s easy to see Harris as a voice for continuity and Trump as a candidate eager to explode the country’s climate and clean energy ambitions. Before any legislation is signed or regulations enacted, companies will respond to these signals.