What will be the climate fallout from Trump’s ‘big beautiful bill’?

Cuts to clean energy spending in the bill President Donald Trump signed into law on 4 July could lead to billions of tonnes of additional CO2 emissions over the next decade, according to early estimates. The US was already behind on its Paris Agreement pledge to cut emissions in half by 2030, and the slowdown will leave the country – the world’s second-largest emitter after China – even further off track.

“While other countries are benefiting from accelerated investment in the clean energy economy, the US is taking a step backwards,” David Widawsky at the World Resources Institute, an environmental advocacy group, said in a statement.

The sweeping legislation – known as the “One Big Beautiful Bill Act” – contains more than $4.5 trillion in tax cuts and $350 billion in new spending for immigration enforcement and the military.

Republicans in Congress included funding cuts to clean energy, along with larger cuts to affordable healthcare and food programs, to offset that spending. Over the next few years, the law will end hundreds of billions of dollars’ worth of tax credits aimed at boosting low-emission energy sources and uses established by the Inflation Reduction Act, which passed under the Biden administration.

Researchers at Princeton University modelled how the policy change would affect the US energy system and emissions over the next decade. They found the law substantially slows the decline in US greenhouse gas emissions that were expected under the Biden administration’s policies, effectively repealing the Inflation Reduction Act.

Since a peak of about 6.6 billion tonnes of CO2 equivalent emissions in 2005, US emissions have declined by about 17 per cent and were set to fall by about 25 per cent by 2030. Under the new law, the decline is expected to be 20 per cent in 2030, a difference of hundreds of millions of tonnes of CO2.

The difference is even more stark in 2035, when more clean energy projects were anticipated to have been built. Under Biden’s policies, emissions were set to fall as much as 44 per cent by then relative to 2005, according to the researchers. Under the new law, they would fall just 25 per cent, a disparity of half a billion tonnes of CO2 per year.

The slowdown would leave US emissions behind its former pledges under the Paris Agreement by about 2 billion tonnes in 2030. In 2035, US emissions would be around 2.5 billion tonnes higher than an emissions trajectory consistent with reaching net zero by mid-century.

The bill includes ending tax credits for electric vehicles this year and phasing out credits for low-emission renewable energy, such as wind and solar, in 2026. Credits for energy efficiency upgrades, such as heat pumps and home insulation, also now end in 2026. The bill cancels the remaining funding for clean energy-related research and development programs.

However, tax credits for other sources of low-emission electricity, including nuclear power, hydropower and geothermal energy, will remain available until 2033. The bill also maintains support for more speculative technologies favoured by the fossil fuel industry, including a tax credit for low-emissions hydrogen production that lasts until 2028 and credits for capturing or removing CO2 from the atmosphere.

Climate advocates decried the passage of the bill for its emissions consequences, as well as ways it could run counter to the Trump administration’s agenda to lower the cost of energy and expand American manufacturing.

“We urgently need more clean, affordable energy, but this measure would bring the renaissance in American clean energy production to a halt and send good, domestic manufacturing jobs to our foreign rivals,” Manish Bapna at the US-based advocacy group Natural Resources Defense Council said in a statement.