Trump’s big toxic bill will cost America – and the world

Even by the standard of the Trump administration’s record on climate change and energy, the megabill passed by Congress on July 4 – the so-called One Big Beautiful Bill – is iridescently destructive. It will hurt Americans first, particularly those in Republican states. But eventually, we will all pay.

Trump’s goal with the BBB, as it has become known, was not, firstly, to assault the world’s climate. His primary goal was to lock in tax cuts for big business and America’s wealthiest citizens.

Illustration by Dionne GainCredit:

To placate the few remaining deficit hawks in Republican congressional ranks, the BBB’s authors had to make at least a pretence of seeking to pay for some of these cuts. They did so first by stripping funding that had been directed to the benefit of America’s poorest citizens.

For example, spending cuts to healthcare and food assistance programs in the bill will average about $US1.2 trillion over the next decade, while new tax cuts for households already making over $US500,000 each year will cost about the same, the Congressional Budget Office shows.

Because this transfer of wealth from the poor to the rich will not even touch the sides when it comes to paying for the BBB, Republicans also hacked into government spending on green technology.

This serves several purposes beyond paying for some of those tax cuts. It satisfies Trump donors in the fossil fuel industry, but more importantly, it undoes the signal achievement of the Biden administration – the Inflation Reduction Act.

The IRA served as both a post-COVID stimulus measure and as the world’s single largest ever investment in fighting climate change, a vast incentive scheme for new green tech in the US. If left in place, the incentive payments and tax cuts were expected to cost $US656 billion and drive around $US2 trillion in private capital expenditure.

Republican “red” states, set to benefit most from the IRA’s largesse, will now be worst hit while the BBB’s assault on the social safety net will disproportionately impact states which backed Trump.

US President Donald Trump during a signing ceremony for the One Big Beautiful Bill Act at the White House.Credit: Bloomberg

But it will eventually hurt us all because the IRA, had it not been dismantled, would have spared the world around four billion tonnes of greenhouse gas emissions by 2030.

Indeed, the total carbon cost of terminating the IRA, supercharging the US fossil fuel industry, and various other Trump executive actions, is now estimated to be around 7 billion tonnes of greenhouse gas emissions. Or, as the specialist climate publication CarbonBrief notes, around the total annual output of Indonesia, the world’s sixth-largest carbon emitter.

According to an analysis by Princeton University’s REPEAT project, US emissions are now set to fall by just 3 per cent by 2030, rather than the 40 per cent required should the US have reached its abandoned Paris Agreement target. This is around four per cent of current total global emissions each year.

This is the price we must all pay for Trump’s BBB, in both the incalculable increase in the impact and incidence of climate catastrophes over the coming years, and in the cost of offsetting those lost cuts by increasing the burden on other nations.

That Trump does not care about the global impact of domestic policies is no surprise. But what is harder to fathom is the costs he is willing to heap upon Americans.

Trump’s various climate and energy policies, including those in his BBB and the trashing of the IRA, plus his various executive orders, will see Americans paying more for dirtier sources of energy.

It will see a decrease in clean electricity generation in 2035 by more than 820 terawatt-hours – more than the entire contribution of nuclear or coal to its electricity supply today. It will increase US household and business energy expenditure by US$28 billion annually by 2030 and over $US50 billion by 2035, according to REPEAT.

Average US household energy costs will increase by around $US165 per household per year in 2030.

Even more perversely, the initiatives will lock the US out of competition with China for a share of the technologies of the future beyond wind and solar. The burgeoning EV industry is being crippled not just by a loss of incentives and tax breaks for battery development, but by sanctions on the Chinese components the industry will need in the absence of US alternatives.

“We are in a global competition with China, and it’s not just EVs. And if we lose this, we do not have a future Ford,” Ford’s chief executive Jim Farley said at a conference last month, describing recent visits to China as the “most humbling experience” of his life.

Tellingly, even as Trump abandons the industries of the future with his BBB, he has propped up not just those of the fossil fuel era, but even one that came before. To secure the crucial support of the Alaskan senator Lisa Murkowski Trump found the cash to increase tax deductions for Alaskan subsistence whaling.

Indeed, by the time the bill had been forced through Congress, it had gathered so many tax cuts and pay-offs that it failed to pay for itself. Rather, over the next decade it will add US$2.5 trillion to the already eye-bleeding US debt of $US36.8 trillion.

Climate advocates have been locked in a debate over whether the only way to save the climate would be to destroy the global economy. Over recent years optimists had begun to toy with the notion that perhaps the revolution in green tech over recent years, such as the 90 per cent collapse in the cost of solar power, might just allow us to preserve both.

With his sprawling omnibus bill, a “showcase for fiscal incontinence and ideological exhaustion” in the words of The Economist, it is as though Trump has concluded that with enough effort, both could be destroyed at once.

Nick O’Malley is national environment and climate editor for The Sydney Morning Herald and The Age. He is also a senior writer and a former US correspondent.

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