One Big Beautiful Bill: Is Trump’s climate rollback China’s opportunity?

On 20 January 2025, during his first day in office, Donald J. Trump signed an executive order which directed the government to withdraw the US from the Paris Agreement, a legally binding international treaty on climate change adopted in 2015. This fulfilled one of his election campaign promises, namely, to scale back the support for carbon emission reductions and green technology development that the Biden administration had launched. It was also easier than one of the other promises: to end the war in Ukraine in one day.

The key theme from Trump’s campaign was “drill, baby, drill”, and his actions have reflected this promise, which helped raise a billion US dollars from oil executives for his election campaign. The influence of these lobbying groups did not stop after Trump entered the White House, and has been clearly discernible in the so-called “One Big Beautiful Bill Act” that was passed by Republicans in Congress and signed into law on 4 July.

In addition to an extension of Trump’s 2017 tax cuts for America’s rich, the bill proposed by Trump was loaded, from the first draft circulated in January this year, with fossil fuel lobbyists’ measures to assist the black economy and roll back green initiatives. In March, the Association of Petroleum Industries (API) launched a public campaign framing the bill as designed for “energy independence”, and private meetings between lawmakers and energy executives during April and May succeeded in strengthening tax incentives for fossil fuel while removing clean energy tax credits. 

The passing of the Act in July was greeted with elation by the API, which proudly declared: “This is the most important energy bill in a generation. President Trump has delivered on his promise to unleash American energy by unlocking opportunities for investment, supporting global competitiveness and opening lease sales onshore and offshore from the Gulf of America to Alaska. We applaud President Trump and Congress on this historic legislation that cements American energy leadership for years to come and ushers in a new era of energy development.”

Specifically, the bill mandates oil and gas lease sales both onshore and offshore, removes the Inflation Reduction Act’s (IRA) requirement to tie those sales to renewable energy projects and rolls back royalty rates to their pre-IRA levels — effectively reversing key climate-focused measures of the Biden administration.

In addition, the law reinstates full tax deductions for intangible drilling costs — expenses like labour, fuel and equipment rentals that do not result in physical assets. It also delays the methane emissions fee until 2035, giving companies more time before they have to pay. Additionally, it increases the carbon capture tax credit for producers that utilise carbon dioxide to boost oil production. Overall, the bill reduces costs and postpones penalties for the industry while promoting carbon capture technology.

In contrast, the bill rapidly phases out tax credits for wind, solar and electric vehicles (EVs). This is expected to curb the buildout of wind and solar by more than 70 gigawatts by 2030, driving up household energy costs by US$165 per year, according to an analysis from Princeton University. Moreover, the loss of the EV tax credit has been estimated to lead to roughly 8 million fewer plug-in cars sold this decade. 

The Republican (GOP) enthusiasm for removing federal support and increasing taxes for clean technology investments came as a surprise for some observers, since the vast majority of investments and jobs in clean energy and technology manufacturing facilities across the US during 2022-2024 were made in districts represented by Republicans in Congress. One source estimated that by May 2025, business cancellations of clean energy investment projects comprised a total US$15.5 billion since January, while nearly 12,000 jobs were lost in GOP districts. 

Needless to say, the Act signed off by Trump will have a host of other effects, such as adding US$3.4 trillion to the national debt over the next decade. In addition, the legislation is expected to reduce federal taxes and cash transfers, such as Social Security and Medicaid benefits that the poorest households in the US would otherwise have obtained.

Given that China has been moving fast forward on the development of green technologies such as wind, solar and EVs, and remains committed to the Paris Agreement, one would expect that the triumph of American fossil fuel lobbies would offer China new opportunities as a powerful climate hero on the world stage.

With extensive economies of scale and continued government support, China’s green technology manufacturing capabilities could potentially provide the rest of the world with a more sustainable clean energy supply. But the US market will certainly be difficult to reach, and those of its allies — whether or not they remain US allies — will fear becoming dependent on China for these crucial technologies.

For new achievements in climate science, the Chinese research community has become a leading contributor to international academic publications during recent decades; moreover, Chinese scientists are increasingly providing essential services to global assessments of climate change, such as the reports of the Intergovernmental Panel on Climate Change (IPCC), and advanced climate models regionally and globally.

This international position of Chinese climate change research will likely be strengthened while the Trump Administration’s attacks on the US academic community intensify and federal funding for research projects on climate and environmental issues dry up. 

Surveys have indicated that there is a fairly high awareness of the existence and anthropogenic causes of climate change among a majority of the Chinese population. Almost 80% of respondents recognised in 2016 that climate change is happening, while more than 70% were aware that human activities were the cause of climate change. The 2016 survey also demonstrated that 70% of Chinese respondents agreed that China, as the most populous country in the world, should take leadership to address global environmental problems.

In contrast, Gallup surveys of US adults in 2023-24 show that 61% worried a great deal about global warming, while 62% were aware that it is caused by human activities. The results also show a great divergence between the minority of 32% of Republicans who believe that global warming is caused by human activities, and the majority of 88% of Democrats who hold the same belief.

Lately, China’s CO2 emissions have plateaued, providing hopes that China had reached peak carbon emissions ahead of its deadline of 2030 set by Xi Jinping. Although China is currently responsible for some 30% of global emissions, the record saw its emissions decline in the 12 months up to May 2025.

According to Lauri Myllyvirta, an expert at the Centre for Research on Energy and Clean Air, China has installed more than half of the solar and wind generation capacity that has been installed globally over the past few years. This led to the expectation that policy decisions made in 2025 will strongly affect China’s emissions trajectory in the coming years. 

In particular, both China’s new commitments under the Paris Agreement and the country’s next five-year plan are being prepared in 2025. Nevertheless, the government has pushed electricity buyers to enter into long-term contracts with coal-power companies, which involve guaranteed sales volumes. This has been a way to shore up profitability and enable investments in new coal-power capacity. The influence of fossil fuel lobbyists, unfortunately, remains as vivid in China as they do in America.

The differences between American and Chinese interests in climate change and action show that China has some advantages when it comes to a leading international standing on climate change, but there is a real risk it could become entangled in the US-driven turmoil, fueled by fossil fuel lobbyists pushing humanity closer to disastrous climate tipping points alongside the rest of the world.

Related: From coal to kilowatts: Is China turning a corner on carbon? | Losing ground: How China is outpacing the US in the Gulf’s green energy race