By J. Julián Cubero, BBVA Research
It doesn’t matter when read: it is very likely that since this analysis was written until its publication there have been news in the uncertain global scenario: in US decisions (more or less rates, rectifications on whom or what they apply and for how long), or in more (or in less) commercial reprisals. And not only in commerce, in other matters that generate uncertainty, as it reflects the volatility of markets by guessing the role of the dollar as a global reserve currency or public debt as an asset without risk in a world that American mercantilism wants to decoupling. Among the few certainties, the questioning of the transition to a decarbonized economy.
North American decoupling in climatic policies and promoting a decarbonized energy is clear: withdrawal from the Paris Agreement, elimination of incentives for electric vehicles, change of objectives of the American environmental protection agency towards the increase in the purchasing power of families and, at the expense of environmental regulations, the promotion of fossil fuels, including coal, less energy efficient and more intensive Greenhouse On the contrary, Europe launched the Clean Industrial Deal so that decarbonization is a competitiveness lever, as noted by a BBVA Research analysis (Clean Industrial Deal: impulse to decarbonization and European competitiveness). China, on the other hand, maintains the orientation of its long -term growth policy, which includes among its levers the green economy (China | main conclusions of the “two sessions” of March 2025). It is not strange then the differential reaction of stock market indexes linked to the green transition: from the inauguration of Donald Trump until April 10, these indices in China or in Europe have oscillated in ranges very close to those of the market set.
Meanwhile, in the US the values related to the green transition have fallen 20 percentage points compared to the total market.
The mercantilist chaos is part of a trend in time, and not only in the US, as a BBVA Research analysis shows (geoeconomic fragmentation, a vulnerability for the climatic transition). According to Global Trade Alert, which tracks the measures that affect trade and global investment, the annual average number of restrictive regulations announced during this decade (up to 2024) is 75% higher than that of the past. And commercial restrictions with impact on renewable energy (trade of critical materials, car batteries, or components of solar or wind technology) weigh more and more: 16% of the total, three points more than in the previous decade. This fragmentation represents a relevant vulnerability for Europe, whose decarbonization process depends on critical inputs sometimes from few politically distant countries. For example, almost 80% of European imports of electricity or rare earths come from China.
In the long term, the commitment to decarbonization is clear because it contributes to solving the other two vertices of the energy trilema, more in vogue at present than environmental sustainability: supply security (more when there are no sources of fossil energy) and price accessibility. According to the International Renewable Energy Agency (Irena), more than 90% of the new installed power generation capacity in the world in 2024 corresponded to renewable sources, whose cost in 2023 in photovoltaic and wind energy was already less than that of the fossil. But this path can be more steep and with curves if the policies do not accompany. As? Globally it would be enough to do not hinder the trade of critical supplies, eliminating barriers that do not obey genuine disputes of unfair competition that would have to be resolved by the multilateral organisms that already exist, also advancing in considering carbon emissions one more component of production and putting a price accordingly. Domestically, simply leaving market incentives for those technologies already commercially profitable and collaborating with the private sector so that the innovative impulse does not stop. The certainty in these great lines promotes long -term investment.
