As of early Wednesday morning, Donald Trump seems likely to be re-elected president of the United States, becoming the first commander in chief since Grover Cleveland to serve non-consecutive terms.
Trump’s probable victory has profound implications for America’s economy, security, and leadership in the world. But it will also impact the country’s energy and environmental policy.
During his first term, Trump made his antipathy for climate policy into a centerpiece of his politics, turning the United States into a global pariah on environmental issues. His second term will play out in a different context — one in which the United States has a real climate law on its books, but also where China has seized a commanding lead in many of the most important zero-carbon technologies. That means Trump’s climate decisions will matter to the country’s economic policy in a way that they never did before.
But what will a Trump administration look like? To begin with: Trump’s victory will put climate advocates — and the broader clean energy economy — on defense for the next four years and beyond.
The first few steps taken by the Trump administration are easy to predict. He will pull the United States out of the Paris Agreement, just like he did during the first term; he will approve a new tranche of liquified natural gas export terminals; and he will block and then begin to roll back the Environmental Protection Agency’s climate rules for power plants, cars, and light-duty trucks.
Not all of these rollbacks will make themselves felt at first. The current set of EPA clean car rules, for instance, apply to vehicles sold through model year 2026. That is close enough to the present that automakers have already begun to make the necessary investments to meet those standards. But vehicles sold in the latter half of this decade will likely face much weaker rules or none at all.
Then the bigger climate policy questions will come. First up is whether Trump tries to repeal or otherwise hinder the Inflation Reduction Act, the landmark climate incentives law passed by President Joe Biden. Trump has said that he wants to “terminate” IRA spending, telling the Economic Club of New York that he seeks to “rescind all unspent funds” under the law.
That would — as Trump hopes — set the country and world back in the fight against climate change. But it would also significantly raise taxes on energy companies (and automakers) while hurting Trump’s own voters. The IRA’s hundreds of billions in investments, which are largely tax credits, have overwhelmingly flowed to Republican districts. According to a Washington Post analysis, districts that backed Trump in 2020 have received three times as much IRA funding as those that supported Biden. New factories making EVs, batteries, and solar panels have popped up across purple and red America, including in Georgia, Arizona, and the Sun Belt. That’s why 18 House Republicans have asked Mike Johnson directly not to repeal the law. If Democrats ultimately win the House of Representatives — we will probably not know for some weeks — then Trump will lack the votes to repeal the law outright.
That’s the theory behind the IRA, at least. The climate law, like the Affordable Care Act before it, is meant to protect itself from repeal by tying itself to local economies across the country. Will that theory hold? Will the climate law survive Trump’s first 100 days? Now we will find out.
Even if the law itself stands, Trump may seek other ways to tamper with it. By saying that he might “rescind the [IRA’s] unspent funds,” he is raising the specter of impoundment, the name for when the president delays or refuses to spend funding that Congress has authorized. Impoundment is of dubious legality, and it is regulated by a 1974 law first passed to rein in Richard Nixon, but Trump might nonetheless try to pause some IRA payments for a time. The first impeachment case against him in 2019 concerned his impoundment of defense funding for Ukraine.
Beyond the IRA, though, there are a number of lurking fissures in a second Trump administration’s climate and environmental policy. Trump has ascended to the White House with the assistance of a strange coalition. It includes Elon Musk, an EV and defense contracting billionaire, and Robert F. Kennedy, Jr., an environmental lawyer turned anti-vaccine crusader and roadkill enthusiast. Trump has promised to put Kennedy in charge of public health policy, and Musk is supposedly going to oversee a new Department of Government Efficiency.
These men agree on some policies. But they do not agree on everything, including in the realm of energy policy. Even during his victory speech, Trump jokingly warned Kennedy to “stay away from the liquid gold,” referencing domestic oil production.
Kennedy is also a lifelong opponent of nuclear energy, and one of his greatest career victories is shutting down New York’s nuclear reactor Indian Point. Musk champions nuclear energy and has said shuttering reactors is “total madness.” The likely next vice president, JD Vance, also tacitly supports nuclear. But Trump, who has officially called for the U.S. to build more nuclear reactors, has sounded more skeptical of nuclear energy lately.
Other fault lines risk dividing this cohort. Kennedy has campaigned against the chemical industry. Will he back the buildout of refineries and chemical plants that Trump has promised? Elon Musk has said that repealing the IRA could benefit Tesla by kneecapping its competitors. Yet much of Tesla’s profit comes from selling regulatory credits created by California and the federal government’s climate policies. If Trump repeals those policies, what will happen to Tesla’s profitability? (Will Musk care?)
The backdrop to these disagreements will be the now forever altered geopolitics for climate policy. Eight years ago, when Trump first took office, climate policy was seen as fundamentally limited to the environment — and clean energy was an important but up-and-coming, almost wholesome niche pursuit that Democrats doted upon. Now the stuff of clean energy — renewables, batteries, and EVs — are central to modern economic development and to geopolitics.
China shows why that is. For every step back that Trump takes on climate policy, China will step forward and take more of a global leadership role. Indeed, partly because of Trump’s own policies, China has taken a commanding lead in zero-carbon technologies over the past decade. In particular it now dominates electric vehicle production, producing cheaper and technologically superior models to anything available elsewhere in the world. If America ends its support for EVs, then China will happily take what global market share remains from U.S. automakers — in fact, it is already doing so. As Trump’s White House steers American climate policy for the rest of the 2020s, they will not just be deciding what direction the U.S. will go in — they will be acting with, or against, the rest of the world.
REN21
