Trump victory could challenge IRA policy, Jefferies says

A Trump victory in the 2024 US presidential election could threaten the Inflation Reduction Act (IRA), according to a Jefferies analysis.

The report raised concerns about a potential reduction in support for renewable energy if Trump is returned to office, especially as Republicans are expected to take control of the Senate.

“The White House remains uncertain, but a narrow Republican victory in the Senate seems likely,” Jefferies said.

In this scenario, former President Trump could try to undo many of the IRA’s provisions, including incentives for renewable energy projects like solar and wind. However, the analysis indicated that the divided nature of Congress would pose significant legislative challenges to such efforts.

“A narrowly divided House could make it harder for Trump to push through policy changes,” Jefferies said. On the other hand, a Harris victory would likely mean a continuation, and perhaps an expansion, of IRA policies, although the Republican-controlled Senate would act as a check on more ambitious proposals.

“Harris could expand the current IRA framework, but the Senate’s composition would slow or reverse any major initiatives,” the report said. The lack of a detailed policy agenda from either candidate, however, leaves the IRA’s future uncertain.

Jefferies also highlighted the growing partisan divide on renewable energy, noting that while some red states could benefit from IRA provisions, opposition from Republican lawmakers remains staunch. “Nuclear energy is one area where bipartisan support is possible, but resistance to solar and wind incentives remains,” the report noted.

The outcome of the 2024 election will be critical in determining the direction of U.S. energy policy, with potential implications for both domestic energy markets and international relations, particularly in the context of China’s involvement in IRA subsidies.

Trump victory could challenge IRA policy, Jefferies says

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