Earth Day in the Age of Tariff Diplomacy
Fire up the dial-up because coal is back!
Happy Earth Day!
Earth Day has been around for over 50 years, and this year’s focus is renewable energy with the theme “Our Power, Our Planet.”
Not surprising, really.
Larry Fink was already leaning into this last year, calling for ‘energy pragmatism,’ and now S&P Global is aligning its Commodities Insights and Sustainable1 units. Suddenly, energy is a safe haven for ESG.
In his latest letter to investors, Fink returned to this theme, calling out:
We need energy pragmatism. That starts with fixing the slow, broken permitting processes in the U.S. and Europe. But it also means being clear-eyed about our energy mix.
Most new infrastructure investments have been flowing into renewables. But without major breakthroughs in storage, wind and solar alone can’t reliably keep the lights on.
And so, clean energy investment is booming, but fossil fuels aren't going away until storage catches up and renewables are more efficient.
I’ve long argued with activists because we can’t simply ‘turn off fossil fuels’ without serious social repercussions. Yet, should Trump’s bid to ‘revitalize America’s coal industry’ be part of this plan?
Good lord, no.
At a time when I daily say to myself, “This is the most idiotic thing I’ve ever read,” this truly hits that mark.
Companies still have 2030 targets, the world’s hyperscalers are trying to make cloud computing green, and major players are working to decarbonize their supply chain, so who exactly is supposed to buy all this coal energy? After all, coal is 16% of the US energy mix, so what kind of contortionist capital would be needed to prop up a dying industry?
Let’s hop on our dial-up modems and search Lycos to find out. 🤦♂️
Emerging countries have growing energy needs
Energy needs are rising globally. The IEA reported that in 2024, energy usage grew faster than GDP, though it hasn’t yet outpaced it. Emerging economies drive this growth and account for 80% of new demand. That demand could make them targets and create new leverage points across global trade.
Yet, the mere fact that companies no longer want to source, or have their suppliers source, dirty energy, even with revenue growth, means that clean energy would be preferred. The decoupling of GDP and carbon was reported in 2021, so this is a thing. Energy use no longer equates to economic growth and is an outdated perspective.
One likely explanation for Trump’s coal obsession and bizarre tariffs on smaller Global South countries is that 80% of new energy growth comes from emerging economies. Tariffs are now a bargaining chip as these countries seek new energy sources. In other words, buy America’s coal to power your country, or deal with the tariffs.
And in case you didn’t know, America sits on the world’s largest coal reserve. Heck, I’m in Pennsylvania, and my family migrated here to mine coal.
Would energy needs force a pragmatic approach that includes dirty fossil fuels and coal but not renewables and new technologies?
Let’s zoom in on one of the smallest countries caught in this geopolitical net: Lesotho.
Lesotho: A country transitioning to energy independence
One of Trump’s most significant tariff increases hit the small, landlocked country of Lesotho, which is surrounded by South Africa. The country exports around $2B, primarily textiles and jeans.
The overall tariff pursuit has rattled markets, but Lesotho is a particular head-scratcher.
As we saw with law firms recently, this move weighs heavily on the country. They’ve made strategic moves to mitigate and appease the US President, fast-tracked a Starlink contract, welcomed U.S. construction firms, and even considered accepting foreign nationals deported by the U.S. who aren’t accepted by their home countries (per Mother Jones).
Could the line stop at coal? It’s doubtful, but this is where an interesting tension might emerge between progress, stakeholders, and Trump’s influence…maybe.
In 2023, the Lesotho Meteorological Services, the Ministry of Defence, and the National Security and Environment published a Technology Needs Assessment report on transitioning to renewable energy as part of a pragmatic assessment of energy (and financial) independence.
Electricity peak demand in Lesotho totals more than 160 MW; however, about two-thirds of the demand is supplied from imports of electricity from South African Public Utility (ESKOM) and Electricity of Mozambique (EDM) – mostly coal-fired power generation (LEWA, 2019b). This heavy reliance on imported fossil fuels and electricity places heavy pressure on the country’s foreign exchange reserves, exacerbates state budget deficits, and poses major energy security concerns, both in terms of access to supplies and pricing. Thus, there are abundant opportunities for renewable energy generation, energy conservation and energy efficiency.
Oh, how I love a good “Multi Criteria Decision Analysis” on a topic!
Most of Lesotho’s coal imports come from South Africa, which is dealing with its internal problems of coal pollution to the point where judges recently stopped a new coal-fired plant from being built.
Lesotho is attempting to lower its reliance on coal. There is even a draft parliamentary bill considering a harder pivot towards better understanding the energy mix (step 1) and integrating more renewables (step 2). If the US pushes for coal exports, Lesotho could end up in the crosshairs again, even if that wasn’t considered in part of their energy plans.
Solar projects are underway in the country, and they deeply understand hydropower’s role. This is where the tension might come in. If a downstream B2B company is reporting along the GHG Protocol (I mean, who isn’t at this point), would a sudden uptick in Scope 3 supplier emissions, usually over 80% of a downstream B2B company’s emissions, be tenable?
When conflicting stakeholder needs arise, what matters?
No one in the business ecosystem is asking for more emissions, and certainly not Lesotho, which has seen the fallout of coal pollution next door in South Africa. In this case, which voice gets prioritized: the company collecting its Scope 3 disclosures or the one setting trade policy?
Without B2B company support, especially from large US companies, Lesotho might not have a choice with vindictive policies in play. The risk of crashing its economy is just too significant.
But let’s not forget that contorting to appease Washington is a moving target.
Right now, it is Starlink and construction contracts. Next month, it could be coal, migrants, or something even less coherent. There’s no stable logic to follow, just a game of geopolitical whack-a-mole. For countries attempting to work with US companies, the risk isn’t just economic collapse, it’s reputational whiplash and strategic exhaustion.
And no one is safe.
Fortunately, despite the noise from Washington, most businesses aren’t budgeting for a coal-powered future. Scope 3 looms large, downstream supply chains are still scrutinized, and reporting mandates are mostly intact. Whether it’s Lesotho or a Fortune 100 buyer, the material pressure to reduce emissions is here to stay.
We need corporate voices to speak out, which hasn’t happened yet. It’s easy to set far-flung targets, but when policies shift, you have to be willing to stand your ground. If you’ve set goals and don’t stand by them when it matters, what’s the point?
So this Earth Day, the real question isn’t just who sets short-term policy, but who holds their ground when politics and progress collide. In that tension, those who turn away from pragmatic climate action will find themselves left behind.