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Start for freeThe upcoming 2024 US presidential election has significant implications for energy and climate policies in Latin America. This article examines the potential impacts of a Trump or Harris administration on the region's energy sector and climate initiatives.
Latin America's Energy Landscape
Latin America is uniquely positioned in the global energy landscape:
- Rich in fossil fuels, renewables, and critical minerals
- Good relationships with both the US and China
- Varying endowments and political relationships across countries
- Poised to thrive under various energy transition scenarios
Key Issues Beyond Energy and Climate
While energy and climate are important, other issues may take precedence in US-Latin America relations:
- US-Mexico relations and USMCA review
- Cuba policy
- Venezuela sanctions
- Immigration
Trump vs. Harris: Energy and Climate Policies
Paris Agreement
- Trump likely to withdraw again
- Harris would maintain US commitment
- Global momentum on climate action likely to continue regardless
Domestic Regulations
- Trump may roll back some regulations
- Harris would maintain or strengthen environmental standards
Fossil Fuels
- Both likely to approve LNG exports
- Harris may link approvals to stricter methane standards
- Oil production expected to expand under either administration
Renewable Energy
- Harris more likely to pursue aggressive renewable policies
- Trump may attempt to modify parts of the Inflation Reduction Act
Nuclear Power
- Bipartisan support likely to continue
Impact on Latin American Energy Sector
Oil and Gas
- US production expected to expand under either administration
- Latin American producers (Brazil, Guyana, Argentina) likely unaffected
Critical Minerals
- Both administrations likely to pursue partnerships with Latin America
- Competition with China for supply chains
- Opportunity for value-added processing in Latin America
Renewable Energy
- Latin America well-positioned due to clean electricity matrix
- Challenges remain in energy security and grid infrastructure
Trade and Economic Relations
USMCA and Mexico
- Focus on bilateral trade deficit under Trump
- Both administrations likely to scrutinize Mexico's compliance
- Concerns over recent Mexican energy sector reforms
Nearshoring and Friendshoring
- Likely to remain priorities under either administration
- Opportunities for Latin America to leverage clean energy for manufacturing
China Factor
- Latin America balancing relations between US and China
- Opportunities and challenges from Chinese clean energy exports
Biofuels and Sustainable Aviation Fuel (SAF)
- Potential for growth, especially in Brazil
- Challenges remain in scaling up and cost-competitiveness
- Need for continued R&D to drive down costs
Geopolitical Considerations
- Latin America unlikely to shift alliances dramatically
- Focus on balancing relations between US and China
- Managing tensions and opportunities from Chinese clean energy exports
Conclusion
While the outcome of the 2024 US election will undoubtedly impact energy and climate policies in Latin America, the region is well-positioned to adapt to various scenarios. Key factors to watch include:
- Implementation and potential modifications to the Inflation Reduction Act
- USMCA review and trade relations with Mexico
- Competition with China for critical minerals and clean energy supply chains
- Development of biofuels and sustainable aviation fuel
- Balancing geopolitical relationships to maximize economic opportunities
Regardless of the election outcome, Latin America's abundant energy resources and strategic position between the US and China will continue to shape its role in the global energy transition.
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