Trump’s climate policies Insight series: Part 1
This insight forms Part 1 of a four-part series on Trump’s climate change policies and their potential impacts. So far, the Trump administration has rolled back on many environmental policies, while expanding fossil fuel production, marking a major U-turn on US energy policies. This Insight provides a quick overview of Trump’s early environmental policy actions, their impacts on decarbonisation efforts and the effects this could have on the clean technology sector in the USA. These points will be expanded on in more depth in parts 2–4 of the Insight series.
Note, only CRU clients will have access to parts 3 and 4. If interested, please email sales@crugroup.com
Part 2 will focus in detail on the Trump administration’s rollback of climate and other environmental policies, and his subsequent promotion of fossil fuel expansion.
Part 3 will explore how these policies could impact decarbonisation efforts in the USA and worldwide.
Part 4 will discuss how the new policy announcements will impact the clean technology sector in the USA.
Rollback of environmental policies and halting funds to climate commitments
Since taking office, the Trump administration has rolled back over 17 Biden-era environmental regulations, signalling a broader deregulatory agenda. Key actions include using the Congressional Review Act (CRA) to repeal climate rules, directing agencies to eliminate emissions regulations and cutting climate adaptation funding. These actions align with Trump’s broader strategy of prioritising fossil fuels and cutting climate-related spending.
One of Trump’s first actions as president was to withdraw the USA from the Paris Agreement once again. Furthermore, he also revoked the US international climate finance plan, rescinding $4 bn pledged to the Green Climate Fund.
Additionally, the Trump administration paused funding under the Inflation Reduction Act (IRA), jeopardising over $300 bn in clean energy investments; and suspended offshore wind lease auctions, further signalling his administration’s desire to shift away from renewable energy and towards fossil fuel expansion. A summary of Trump’s actions can be seen in the table below, taken from CRU’s Sustainability and Emissions Service.
National energy emergency declared as Trump pushes to expand fossil fuel production
Reinforcing the above announcements, the Trump administration has declared a national energy emergency as a way to accelerate and expand fossil fuel production, rolling back environmental regulations that could hinder oil, gas and coal extraction. Through the ‘Unleashing American Energy’ executive order, they aim to increase domestic energy production, expand infrastructure for transportation, refining and power generation, promote drilling on federal lands and streamline permit approvals.
A key aspect of this agenda is opening the Alaska National Wildlife Refuge for oil and gas exploration, fast-tracking permits for fossil fuel projects and maximising the extraction of natural resources within Alaska. While these measures are intended to boost domestic energy output, they also raise significant environmental concerns.
How could these policies impact decarbonisation efforts in the USA?
Trump’s shift towards fossil expansion and rollback of Biden’s clean energy agenda increases uncertainty for clean energy projects. Despite this, state-level initiatives, corporate demand and market forces are expected to prevent a complete reversal of clean energy growth. Many states have legally binding emissions reductions targets and will continue to expand renewables due to their economic advantages.
Internationally, the impact of Trump’s withdrawal from the Paris Agreement is likely to be limited. Other nations, particularly China and the EU, remain committed to green policies for economic and energy security reasons. The US’ retreat could strengthen other major economies’ dominance in clean technology sectors such as solar, wind and electric vehicles (EV).
What does the future of the green technology sector look like under Trump?
Trump’s initial rollback of climate policies has created uncertainty for the US’s clean technology sectors, especially for offshore wind and the EV industry. The solar and battery industries also face risks from the pause on IRA funding and potential tax credit revisions. The impact of this could be further inflated by tariffs on Chinese imports.
Future investment in green technology projects may slow, making these sectors less competitive without IRA tax credits. However, many Republican-led states have benefited from investment into these technologies, making it likely that state-led policies will continue to support demand. Nevertheless, the lack of federal funding is likely to hinder overall growth.
However, offshore wind faces more immediate setbacks due to the pause of leases, with wind projects potentially being abandoned or significantly delayed in the short-term.
Trump's climate change actions overlooked amid media noise
Trump’s initial policy actions have extended beyond environmental and energy policies to trade and economic measures. Trump has laid out an agenda for his ‘America First Trade Policy’, initiating trade reviews and investigations into trade deficits, Chinese trade practices, the United States-Mexico-Canada Agreement (USMCA) and cross-border issues including illegal migration and drug flows.
Trump has imposed 25% tariffs on imports from Canada and Mexico, including a 10% tariff imposed specifically on Canadian energy. He has also put a 20% tariff on imports from China, which is double the amount he originally suggested. This has led to Canada and China retaliating with their own tariffs on US goods, with Mexico set to announce retaliatory measures soon. Trump has also threatened to put 25% tariffs on European imports, increasing tensions with the EU.
Some of the other actions he has taken include reinstating stricter border security measures and proposing corporate tax incentives to boost domestic manufacturing, while also getting involved in foreign affairs, such as the war in Ukraine. Trump offered military aid to Ukraine in return for access to their critical elements and minerals, including lithium and titanium. However, after a disagreement in the White House when President Zelensky went to sign the deal, there is currently doubt whether this will go ahead or not.
However, this Insight series will focus solely on Trump’s environmental and climate policies. If you want to read more about the impact of Trump’s tariffs, please see CRU coverage and Insights below.
- CRU clients cite trade and protectionism as major concerns
- Markets swing as Trump flirts with tariffs (n.b. only accessible to CRU clients)
- New trade war looming: China gears up for impact
- US-EU trade war scenarios: EU manufacturing has most to lose
- The cost of protectionism: Trade disputes send ripples through commodity markets
Part 2 of this Sustainability Insight series will focus on Trump’s early policy actions; Part 3 will discuss how these policies can impact global decarbonisation efforts and Part 4 will explore the impact of these policies on the US clean technology sector.
Note, only CRU clients will have access to parts 3 and 4. If interested, please email sales@crugroup.com
