Trump will test how fragile the energy transition really is

When I speak to people working in the energy transition, I often experience a kind of strange cognitive dissonance on the subject of Trump. Most believe that the eventual replacement of most fossil fuels by low-carbon alternatives is inevitable, and that the growth of US clean energy industries is driven by fundamental economics that are to some extent insulated from the occupant of the White House. A full repeal of the IRA is very unlikely.

Yet there is a deep sense of anxiety that Trump will prove the transition to be much more fragile than anyone wants to admit. Beyond any specific policy or personnel changes he may have planned, Trump successfully campaigned on his fundamental nature as an agent of chaos and disruption — and these traits, more than anything, may ice over a budding new branch of the economy.

“Even modest shifts in US leadership posture will result in billions and billions and billions of dollars of missed economic leadership opportunities and cost hundreds of thousands of jobs,” said John Morton, managing director at the energy investment firm Pollination and a former Biden administration Treasury official.

Trump will take office under very different climate and energy market conditions than he encountered in his first term. In 2016, coal had only just been displaced by natural gas as the country’s main source of electricity, and renewables were still a niche market. Electric vehicle sales were negligible. US climate policy up to that point had focused almost exclusively on emissions regulations that were broadly unpopular with energy industry leaders.

Biden’s IRA changed much of that. Wind and solar are expected to produce more power in the US this year than coal, a first. Companies have announced at least $130 billion in clean energy and related manufacturing projects since the IRA passed. Nearly every large company has committed to a net zero target. Many important technological and financial hurdles to cutting-edge climate tech are being vaulted over. In 2016, opposition to clean energy policy could be seen as preventing a new industry from being born. Today, it has to be seen as proactively strangling one of the fastest-growing sectors of the US economy, one that is urgently needed for the country’s long-term stability and security.

Yet the recent gains do still often rely on taxpayer funding and other forms of government pressure and support. Without those, low-carbon energy will not be able to compete effectively with fossil fuels; even under Biden, US oil and gas production reached record highs as the global energy transition proceeded more slowly than many observers hoped for and expected. It’s unlikely that any action or inaction by Trump could completely reverse the trajectory of the transition. But he will cause it to slow down, even as the economic and human consequences of global warming become ever more stark and the US misses a crucial window to establish a more competitive position compared with China on critical future technologies.

One final takeaway from this election is that US climate activists need to do some hard introspection about why their message has repeatedly failed to resonate with a majority of voters. New strategies are needed to communicate why the energy transition matters and how to support it. Bashing fossil fuels backfires more often than it succeeds. If Trumpian populism is going to be an enduring character of US politics, activists need to find a message that can somehow fit into that frame.

Trump’s victory comes less than a week before the start of COP29, and will certainly put a grim mood on the summit. “This feels like the end,” said the lead climate negotiator from one highly vulnerable middle-income country, who requested anonymity to speak candidly. “With Trump back, any hope for real progress on climate finance is shattered. His administration will almost certainly abandon the Paris Agreement again, wrecking any chance of global unity. For vulnerable countries, it’s nothing less than a disaster — our future feels as if it’s been voted away by the very nation most responsible for this crisis.”

The US federal government may be about to withdraw from the global climate stage, but plenty of other actors are willing to step up. China will likely take a stronger leadership role in shaping the COP negotiations, in addition to its existing dominant position in clean energy supply chains. European countries will likely recapture some of the clean tech investment that the IRA siphoned off to the US. State and local governments in the US itself will also continue to set their own emissions targets and incentives. Trump’s deepening friendship with Tesla CEO Elon Musk may ward off policy changes that are too damaging to the EV industry, at least. And other leaders in the clean energy industry will keep fighting for their own survival.

“It’s easy to say wild things when you’re not in power,” said Jon Powers, president of the solar project developer CleanCapital. “When you’re in power, and folks like us are coming in and saying, ‘Look, if you do this, you’re going to hurt jobs in Republican districts, and you’re going to be held accountable for those decisions,’ it very much moderates their willingness to do it. It’s incumbent on us as an industry to not sit back, but to really get out and have those conversations with the new Trump appointees.”