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After a decade of leadership, voters are poised to overturn two of its biggest achievements. What happened?
Twenty years ago, you could still get away with calling Redmond, Washington, an equestrian town. White fences parceled off ranches and hobby farms where horses grazed under dripping evergreen trees; you could buy live chicks, alfalfa, and Stetson hats in stores downtown. It wasn’t even unusual for Redmond voters to send Republicans to represent their zip code in the state legislature, despite the city being located in blue King County.
The Redmond of today, on the other hand, looks far more like what you’d expect from an affluent (and now staunchly progressive) suburb of Seattle. A cannabis dispensary with a pride flag and a “Black Lives Matter” sign in the window has replaced Work and Western Wear, and the new high-performing magnet school happens to share a name with one of the most popular cars in the neighborhood: Tesla. But Washington is a state full of contradictions, and among Redmond’s few remaining farms is one registered under the winkingly libertarian name of “Galt Valley Ranch LLC.” It belongs to a multimillionaire who has almost single-handedly bankrolled the most significant challenge yet to Washington’s standing as a national climate leader.
Andrew Villeneuve, the founder of the Northwest Progressive Institute, a left-wing think tank also based in Redmond, told me he’s struggled to get voters to pay attention to ballot measures in the past. “I’ve had no such awareness issues this year,” he said. “Nobody’s like ‘Who’s Brian Heywood?’”
A hedge fund manager, multimillionaire, and recent California transplant, Heywood has in short order made himself the supervillain of Washington’s left. His Joker arc into politics involves fleeing the liberal dystopia of the Golden State in 2010 for the no-income-tax refuge of Washington, only to discover that Olympia was progressive, too. This year, he set out to personally “fix stupid things” in his adopted state by spending $6 million out of pocket on a signature-gathering campaign that ultimately landed four conservative initiatives on Washington’s general election ballot. (His campaign, Let’s Go Washington, is also allusively named, although Heywood toldThe Seattle Times that he is not a MAGA supporter.)
Two of the four ballot measures Heywood has willed before voters this November address standard small-government gripes: One would repeal the capital gains tax, and the other would allow workers to opt out of the state’s long-term care payroll tax. Others, however, will ask Washingtonians to vote directly on whether to repeal the state’s landmark cap-and-invest carbon-trading program (I-2117) or block its transition away from natural gas (I-2066).
“We’ve faced initiatives like these before,” Villeneuve told me, “but what is different is how many of them are coming at once.”
As in many Western states, it’s relatively easy for a motivated individual with means to collect the roughly 320,000 signatures needed for a petition to end up on the ballot in Washington. (Contract workers are paid up to $5 per signature, and they often descend on ferry lines, where bored motorists can be talked into putting down their names as they wait for the next boat.) But while rich activists have leveraged this system in the past — Washingtonians may remember the name Tim Eyman — the outcome of the ballot measures before voters this fall will be closely watched by other states and legislatures to gauge how directly popular bold climate progress really is.
“What happens in Washington will certainly have an impact on what happens around the rest of the country,” Leah Missik, the Washington deputy policy director at the clean energy nonprofit Climate Solutions, who also serves on the executive board of the No on 2066 campaign, told me. She added, “If these [laws] are in any way repealed or weakened, that is a sign to other states, and I think it would be incredibly damaging and incredibly unfortunate.”
Though politics in Washington have long been conservation-minded and, shall we say, crunchy (I grew up in Redmond), the state really began to stand out as a leader in progressive climate policy with Governor Jay Inslee’s election in 2013. During Inslee’s tenure, Washington committed to one of the most aggressive 100% clean energy pathways in the country, passed a wide-ranging building emissions law that RMI described as “significantly [raising] the level of ambition on what might be possible for other states,” and in 2023 enacted its landmark cap-and-invest program, called the Climate Commitment Act, which has generated over $2 billion in state revenue so far for transit projects, decarbonization initiatives, and clean air and water programs. Washington has even been credited with inspiring some of President Biden’s climate actions in office.
With Inslee, a Democrat, retiring at the end of this term, Let’s Go Washington’s campaign begins to appear designed to dismantle his legacy while proposing little in the way of alternatives. Hallie Balch, the communications director, denied this allegation in an emailed statement, telling me the initiatives “promote choice and affordability.” The cap-and-invest program, for example, “has not done what the governor said it would do,” she said, and “there are no metrics in place to track [its] success.”
Though the CCA’s cap covers about 75% of the state’s total greenhouse gas emissions, it’s true that we’re still a few years away from having a clear picture of the program’s results. (The law’s first compliance deadline for polluters isn’t until this November.) “The CCA has only been around for almost two years at this point, and so we haven’t yet seen the big emissions declines,” Emily Moore, the director of the climate and energy program at the Sightline Institute, a nonpartisan sustainability think tank that does not take an official position on initiatives, told me. “But what we are seeing,” she added, “is the money that it has generated for a whole suite of climate-friendly and community-friendly projects.”
There isn’t a revenue source remotely comparable to cap-and-invest available to fund the state’s transit, infrastructure, and community projects if the program goes away, meaning a repeal would have a dramatic impact on everything from bus service to salmon recovery projects to local heat pump and induction stove rebates, with most likely getting the axe. The program is also one of the main levers Washington has to reach its goal of reducing emissions 95% below 1990 levels by 2050. As one person involved in crafting the CCA described the upcoming vote on I-2117 to me, it’s “life or death for climate action in Washington.”
That’s partially because I-2117 wouldn’t only repeal the CCA; it would also bar the state and any municipality therein from implementing a new climate tax or cap-and-invest program at any point in the future. When asked what an alternative might be last week during a debate at Seattle University’s Department of Public Affairs and Nonprofit Leadership, Heywood vaguely proposed “something that works.”
“We always knew we were going to have to defend this program at the ballot box,” Joe Fitzgibbon, the majority leader of Washington’s House of Representatives and the chair of the House Environment and Energy Committee, who helped create the CCA, told me. He admitted that he’d expected such a defense to take the form of legislative elections, but 2022 came and went without a single backer of the CCA losing their seat. “I guess in hindsight, I thought we were out of the woods,” Fitzgibbon said.
Let’s Go Washington has labeled CCA a “hidden gas tax” and, bundled with its other initiatives, is running on the slogan “vote yes, pay less.” I-2117 is already the most expensive ballot measure campaign of this election cycle — and the most controversial, with Heywood campaigning at gas stations offering discounted gas, which opponents say violates vote-buying anti-bribery laws. But opposition to the initiative has also rallied a remarkable and unprecedented coalition of strange bedfellows in defense of the CCA, including over 500 businesses, environmental groups, health care organizations, faith leaders, tribes — as well as more than 30 breweries, “a very important coalition member in the state of Washington,” as No on I-2117’s communication director Kelsey Nyland quipped to me. Jane Fonda recently swung through the state to stump for I-2117; the ‘no’ campaign even has the support of the Green Jobs PAC, whose contributors include Shell and BP.
Almost all the advocates I spoke to about I-2117 were feeling optimistic ahead of Washington ballots going out at the end of this week, with the most recent Cascade PBS/Elway poll on the initiative showing support has dropped slightly since May; 46% now say they would vote no, over 30% who would vote yes. (Heywood has pointed optimistically to the number of undecided voters this leaves.) Still, it seems pretty unlikely that Washingtonians will repeal their cap-and-invest program.
I-2066 is a different story.
To the immense frustration of its opponents, Let’s Go Washington touts I-2066 as “Stop the Gas Ban.” The measure was only certified for the ballot in July, compared to January for 2117, meaning that organizers have had much less time to mobilize — several major national green groups, including Defenders of Wildlife and the Environmental Defense Action Fund, confirmed to me that they’d endorsed No on I-2117 but not considered a position on I-2066 — and are on the back foot to combat misinformation.
For one thing, there is no gas ban: I-2066, rather, would repeal parts of a Washington law directing its largest utility, Puget Sound Energy, to consider electrification alternatives before installing new gas pipes; scuttle a pilot effort to promote thermal energy networks as a gas alternative; and, most starkly, it would bar cities and towns, as well as Washington’s energy code, from “prohibiting, penalizing, or discouraging” gas appliances in buildings. “Discouraging” does a lot of work here. For example, Seattle’s building emissions performance standard, which doesn’t ban gas but nudges large developments toward a 2050 net-zero emissions target, could be in jeopardy.
Still, all of this is a lot to expect voters to sort through in the few minutes they might spend filling in the bubbles in their ballot, especially when Let’s Go Washington is making out its message to sound like one simply about energy choice. Add the opaque triple-negative climate campaigners have to sell (“vote no on a ban on banning gas”), and the messaging headaches grow more severe.
Earlier this month, the editorial board for the largest media outlet in Washington, The Seattle Times, endorsed a yes vote on I-2066, arguing for a slower transition away from fossil fuels that leans more heavily on natural gas. “Unfortunately, we are up against a network of fossil fuel corporations and their allies who have a lot of money and who are very invested in the status quo because it perpetuates their wealth and their influence,” Missik, who’s involved with the No on I-2066 campaign, told me, pointing to the Building Industry Association as well as Northwest Natural, National Propane Gas Association, and Koch Industries, who have backed the other side. I-2066 is also polling much better than I-2117; as of September, 47% of voters said they would vote yes, compared to 29% who said they’d vote no.
Rather than interpret those numbers as the electorate’s backlash to Washington’s climate progress, advocates argue they indicate how fossil fuel groups have successfully capitalized on the door propped open by Heywoods’s signature-gathering campaigns. It’s “because one guy opened his wallet; it is that simple,” Villeneuve, the founder of the Northwest Progressive Institute, said. “There is no grassroots movement to overturn these laws; it doesn’t exist. Brian Heywood brought this entire thing into being.” Or, as Missik put it: “Most Washingtons do believe in climate progress, whether or not this will be overridden by money. I sure hope not.”
All of this ultimately brings us back to the question of what Heywood’s whole deal is. With the singular exception of I-2066, his $6 million initiatives seem mostly doomed.
Some I spoke to floated the idea that Heywood and his allies are using Washington as a testing ground for dismantling climate action and seeing what sticks. “If it can happen here, it can happen anywhere: It can happen in California, it can happen in Colorado, it can happen in New York, it can happen in all these states that have passed really strong climate policies,” Caitlin Krenn, the climate and clean energy director of the nonprofit Washington Conservation Action, told me.
But there are other rumors, too. The Washington State Standard’s Jerry Cornfield recently quoted a local GOP chair calling Heywood’s initiatives “a powerful tool” that will “help get Republicans elected” — essentially, a turnout generator. (“We certainly want to see as many people as are eligible to vote exercise their right to make their voices heard, but our top priority is to educate voters about what's at stake with the initiatives this November,” Balch told me in response.) And then there is Heywood’s ranch. Republicans have long cosplayed as rural farmers and cowboys to tap into the masculine conservative fantasy of rugged individualism (what Texas Monthly once called “authenticity drag”). It’s essentially an image-building exercise — perhaps not so unlike positioning yourself as the guy who tried to rein in the state’s runaway Dems.
So far, Heywood has dodged questions about whether he plans to run for governor, and his campaign told me he “isn't using the initiatives as anything other than a way to bring broken policies directly to the people to vote on.” But with this year’s ballots going out to Washington voters today, it’s also a question for another time.
Regardless of what happens, many of the organizers I spoke to rejected the framing of Washington voters cooling on climate. One went as far as to tell me that the time, attention, and money Heywood has spent trying to roll back Washington’s progress is the highest compliment of all. “This is part of the process of doing big things,” Isaac Kastama, who was involved in enacting the CCA and now works for the advocacy group Clean and Prosperous Washington, told me. “If it’s not big and if it goes undetected, that probably means you’re not doing something serious enough.”
Editor’s note: This story has been updated to clarify the scope of I-2117 and correct what Let’s Go Washington has termed a “hidden gas tax.”
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The EV-maker is now a culture war totem, plus some AI.
During Alan Greenspan’s decade-plus run leading the Federal Reserve, investors and the financial media were convinced that there was a “Greenspan put” underlying the stock market. The basic idea was that if the markets fell too much or too sharply, the Fed would intervene and put a floor on prices analogous to a “put” option on a stock, which allows an investor to sell a stock at a specific price, even if it’s currently selling for less. The existence of this put — which was, to be clear, never a stated policy — was thought to push stock prices up, as it gave investors more confidence that their assets could only fall so far.
While current Fed Chair Jerome Powell would be loath to comment on a specific volatile security, we may be seeing the emergence of a kind of sociopolitical put for Tesla, one coming from the White House and conservative media instead of the Federal Reserve.
The company’s high-flying stock shed over $100 billion of value on Monday, falling around 15% and leaving the price down around 50% from its previous all-time high. While the market as a whole also swooned, especially high-value technology companies like Nvidia and Meta, Tesla was the worst hit. Analysts attributed the particularly steep fall to concerns that CEO Elon Musk was spending too much time in Washington, and that the politicization of the brand had made it toxic to buyers in Europe and among liberals in the United States.
Then the cavalry came in. Sean Hannity told his Fox News audience that he had bought a Model S, while President Donald Trump posted on Truth Social that “I’m going to buy a brand new Tesla tomorrow morning as a show of confidence and support for Elon Musk, a truly great American.” By this afternoon, Trump had turned the White House lawn into a sales floor for Musk’s electric vehicles. Tesla shares closed the day up almost 4%, while the market overall closed down after Trump and his advisors’ furious whiplash policy pronouncements on tariffs.
Whether the Tesla put succeeds remains to be seen. The stock is still well, well below its all-time highs, but it may confirm a new way to understand Tesla — not as a company that sells electric vehicles to people concerned about climate change, but rather as a conservative culture war totem that has also made sizable investments in artificial intelligence and robotics.
When Musk bought Twitter and devoted more of his time, energy, money, and public pronouncements to right wing politics, some observers thought that maybe he could lift the dreadful image of electric vehicles among Trump voters. But when Pew did a survey on public attitudes towards electric vehicles back in 2023, it found that “Democrats and Democratic-leaning independents, younger adults, and people living in urban areas are among the most likely to say they would consider purchasing an EV” — hardly a broad swathe of Trump’s America. More than two-thirds of Republicans surveyed said they weren’t interested in buying an electric car, compared to 30% of Democrats.
On the campaign trail, Trump regularly lambasted EVs, although by the end of the campaign, as Musk’s support became more voluminous, he’s lightened up a bit. In any case, the Biden administration’s pro-electric-vehicle policies were an early target for the Trump administration, and the consumer subsidies for EVs passed under the 2022 Inflation Reduction Act are widely considered to be one of the softest targets for repeal.
But newer data shows that the tide may be turning, not so much for electric vehicles, but likely for Tesla itself.
The Wall Street Journalreported survey data last week showing that only 13% of Democrats would consider buying a Tesla, down from 23% from August of 2023, while 26% of Republicans would consider buying a Tesla, up from 15%. Vehicle registration data cited by the Journal suggested a shift in new Tesla purchases from liberal urban areas such as New York, San Francisco, and Los Angeles, towards more conservative-friendly metropolises like Las Vegas, Salt Lake City, and Miami.
At the same time, many Tesla investors appear to be mostly seeing through the gyrations in the famously volatile stock and relatively unconcerned about month-to-month or quarter-to-quarter sales data. After all, even after the epic fall in Tesla’s stock price, the company is still worth over $700 billion, more than Toyota, General Motors, and Ford combined, each of which sells several times more cars per year than Tesla.
Many investors simply do not view Tesla as a luxury or mass market automaker, instead seeing it as an artificial intelligence and robotics company. When I speak to individual Tesla shareholders, they’re always telling me how great Full Self-Driving is, not how many cars they expect the company to sell in August. In many cases, Musk has made Tesla stockholders a lot of money, so they’re willing to cut him tremendous slack and generally believe that he has the future figured out.
Longtime Tesla investor Ron Baron, who bought hundreds of millions of dollars worth of shares from 2014 to 2016, told CNBC Tuesday morning, that Musk “believes that digitization [and] autonomy is going to be driving the future. And he thinks we’re … on the verge of having an era of incredible abundance.”Baron also committed that he hasn’t, won’t, and will never sell. “I’m the last in, I’ll be the last out. So I won’t sell a single share personally until I sell all the shares for clients, and that’s what I’ve done.”
Wedbush Securities’ Dan Ives, one of the biggest Tesla bulls on the street, has told clients that he expects Tesla’s valuation to exceed $2 trillion, and that its self-driving and robotics business “will represent 90% of the valuation.”
Another longtime Tesla bull, Morgan Stanley’s Adam Jonas, told clients in a note Monday that Tesla remained a “Top Pick,” and that his price target was still $430, compared to the stock’s $230.58 close price on the day. His bull case, he said, was $800, which would give the company a valuation over $2.5 trillion.
When the stock lags, Jonas wrote, investors see Tesla as a car company. “In December with the stock testing $500/share, the prevailing sentiment was that the company is an AI ‘winner’ with untapped exposure to embodied AI expressions such as humanoid robotics,” Jonas wrote. “Today with the stock down 50% our investor conversations are focused on management distraction, brand degradation and lost auto sales.”
In a note to clients Tuesday, Ives beseeched Musk to “step up as CEO,” and lamented that there has been “little to no sign of Musk at any Tesla factory or manufacturing facility the last two months.” But his bullishness for Tesla was undaunted. He argued that the scheduled launch of unsupervised Full Self-Driving in June “kicks off the autonomous era at Tesla that we value at $1 trillion alone on a sum-of-the-parts valuation.”
“Autonomous will be the biggest transformation to the auto industry in modern day history,” Ives wrote, “and in our view Tesla will own the autonomous market in the U.S. and globally.”
The most effective put of all may not be anything Trump says or does, but rather investors’ optimism about the future — as long as it’s Elon Musk’s future.
The uncertainty created by Trump’s erratic policymaking could not have come at a worse time for the industry.
This is the second story in a Heatmap series on the “green freeze” under Trump.
Climate tech investment rode to record highs during the Biden administration, supercharged by a surge in ESG investing and net-zero commitments, the passage of the Infrastructure Investment and Jobs Act and Inflation Reduction Act, and at least initially, low interest rates. Though the market had already dropped somewhat from its recent peak, climate tech investors told me that the Trump administration is now shepherding in a detrimental overcorrection. The president’s fossil fuel-friendly rhetoric, dubiously legal IIJA and IRA funding freezes, and aggressive tariffs, have left climate tech startups in the worst possible place: a state of deep uncertainty.
“Uncertainty is the enemy of economic progress,” Andrew Beebe, managing director at Obvious Ventures, told me.
The lack of clarity is understandably causing investors to throw on the brakes. “We’ve talked internally about, let’s be a little bit more cautious, let’s be a little more judicious with our dollars right now,” Gabriel Kra, co-founder at the climate tech firm Prelude Ventures, told me. “We’re not out in the market, but I would think this would be a really tough time to try and go out and raise a new fund.”
This reluctance comes at a particularly bad time for climate tech startups, many of which are now reaching a point where they are ready to scale up and build first-of-a-kind infrastructure projects and factories. That takes serious capital, the kind that wasn’t as necessary during Trump’s first term, or even much of Biden’s, when many of these companies were in a more nascent research and development or proof-of-concept stage.
I also heard from investors that the pace of Trump’s actions and the extent of the economic upheaval across every sector feels unique this time around. “We’re entering a pretty different economic construct,” Beebe told me, citing the swirling unknowns around how Trump’s policies will impact economic indicators such as inflation and interest rates. “We haven’t seen this kind of economic warfare in decades,” he said.
Even before Trump took office, it was notoriously difficult for climate companies to raise funding in the so-called “missing middle,” when startups are too mature for early-stage venture capital but not mature enough for traditional infrastructure investors to take a bet on them. This is exactly the point at which government support — say, a loan guarantee from the Department of Energy’s Loan Programs Office or a grant from the DOE’s Office of Clean Energy Demonstrations — could be most useful in helping a company prove its commercial viability.
But now that Trump has frozen funding — even some that’s been contractually obligated — companies are left with fewer options than ever to reach scale.
One investor who wished to remain anonymous in order to speak more openly told me that “a lot of the missing middle companies are living in a dicier world.” A 2023 white paper on “capital imbalances in the energy transition” from S2G Investments, a firm that supports both early-stage and growth-stage companies, found that from 2017 to 2022, only 20% of climate capital flowed toward companies at this critical inflection point, while 43% went to early-stage companies and 37% towards established technologies. For companies at this precarious growth stage, a funding delay on the order of months could be the difference between life and death, the investor added. Many of these companies may also be reliant on debt financing, they explained. “Unless they’ve been extremely disciplined, they could run into a situation where they’re just not able to service that debt.”
The months or even years that it could take for Trump’s rash funding rescission to wind through the courts will end up killing some companies, Beebe told me. “And unfortunately, that’s what people on the other side of this debate would like, is just to litigate and escalate. And even if they ultimately lose, they’ve won, because startups just don’t have the balance sheets that big companies would,” he explained.
Kra’s Prelude Ventures has a number of prominent companies in its portfolio that have benefitted from DOE grants. This includes Electric Hydrogen, which received a $43.3 million DOE grant to scale electrolyzer manufacturing; Form Energy, which received $150 million to help build a long-duration battery storage manufacturing plant; Boston Metal, which was awarded $50 million for a green steel facility; and Heirloom, which is a part of the $600 million Project Cypress Direct Air Capture hub. DOE funding is often doled out in tranches, with some usually provided upfront and further payments tied to specific project milestones. So even if a grant has officially been awarded, that doesn’t mean all of the funding has been disbursed, giving the Trump administration an opening to break government contracts and claw it back.
Kra told me that a few of his firm’s companies were on the verge of securing government funding before Trump took office, or have a project in the works that is now on hold. “We and the board are working closely with those companies to figure out what to do,” he told me. “If the mandates or supports aren’t there for that company, you’ve got to figure out how to make that cash last a bunch longer so you can still meet some commercially meaningful milestones.”
In this environment, Kra said his firm will be taking a closer look at companies that claim they will be able to attract federal funds. “Let’s make sure we understand what they can do without that non-dilutive capital, without those grants, without that project level support,” he told me, noting that “several” companies in his portfolio will also be impacted by Trump’s ever-changing tariffs on imports from Canada, Mexico, and China. Prelude Ventures is working with its portfolio companies to figure how to “smooth out the hit,” Kra told me later via email, but inevitably the tariffs “will affect the prices consumers pay in the short and long run.”
While investors can’t avoid the impacts of all government policies and impulses, the growth-stage firm G2 Venture Partners has long tried to inoculate itself against the vicissitudes of government financing. “None of our companies actually have any exposure to DOE loans,” Brook Porter, a partner and co-founder at G2, told me in an email, nor have they received government grants. If you add up the revenue from all of the companies in G2’s portfolio, which is made up mainly of sustainability-focused startups, only about 3% “has any exposure to the IRA,” Porter told me. So even if the law’s generous clean energy tax credits are slashed or the programs it supports are left to languish, G2’s companies will likely soldier on.
Then there are the venture capitalists themselves. Many of the investors I spoke with emphasized that not all firms will have the ability or will to weather this storm. “I definitely believe many generalist funds who dabbled in climate will pull back,” Beebe told me. Porter agreed. “The generalists are much more interested in AI, then I think in climate,” he said. It’s not as if there’s been a rash of generalist investors announcing pullbacks, though Kra told me he knows of “a couple of firms” that are rethinking their climate investment strategies, potentially opting to fold these investments under an umbrella category such as “hard tech” instead of highlighting a sectoral focus on energy or climate, specifically.
Last month, the investment firm Coatue, which has about $70 billion in assets under management, raised around $250 million for a climate-focused fund, showing it’s not all doom and gloom for the generalists’ climate ambitions. But Porter told me this is exactly the type of large firm he wouldexpect to back out soon, citing Tiger Global Management and Softbank as others that started investing heavily during climate tech’s boom years from 2020 to 2022 that he could imagine winding down that line of business.
Strategic investors such as oil companies have also been quick to dial back their clean energy ambitions and refocus their sights on the fossil fuels championed by the Trump administration. “Corporate venture is very cyclical,” Beebe told me, explaining that large companies tend to make venture investments when they have excess budget or when a sector looks hot, but tighten the purse strings during periods of uncertainty.
But Cody Simms, a managing partner at the climate tech investment firm MCJ, told me that at the moment, he actually sees the corporate venture ecosystem as “quite strong and quite active.” The firm’s investments include the low-carbon cement company Sublime Systems, which last year got strategic backing from two of the world’s largest building materials companies, and the methane capture company Windfall Bio, which has received strategic funding from Amazon’s Climate Pledge Fund. Simms noted that this momentum could represent an overexuberance among corporations who just recently stood up their climate-focused venture arms, and “we’ll see if it continues into the next few years.”
Notably, Sublime and Windfall Bio both also have millions in DOE grants, and another of MCJ’s portfolio companies, bio-based chemicals maker Solugen, has a “conditional commitment” from the LPO for a loan guarantee of over $200 million. Since that money isn’t yet obligated, there’s a good chance it might never actually materialize, which could stall construction on the company’s in-progress biomanufacturing facility.
Simms told me that the main thing he’s encouraging MCJ’s portfolio companies to do at this stage is to contact their local representatives — not to advocate for climate action in general, but rather “to push on the very specific tax credit that they are planning to use and to talk about how it creates jobs locally in their districts.”
Getting startups to shift the narrative away from decarbonization and climate and toward their multitudinous co-benefits — from energy security to supply chain resilience — is of course a strategy many are already deploying to one degree or another. And investors were quick to remind me that the landscape may not be quite as bleak as it appears.
“We’ve made more investments, and we have a pipeline of more attractive investments now than we have in the last couple of years,” Porter told me. That’s because in spite of whatever havoc the Trump administration is wreaking, a lot of climate tech companies are reaching a critical juncture that could position the sector overall for “a record number of IPOs this year and next,” Porter said. The question is, “will these macro uncertainties — political, economic, financial uncertainty — hold companies back from going public?”
As with so many economic downturns and periods of instability, investors also see this as a moment for the true blue startups and venture capitalists to prove their worth and business acumen in an environment that’s working against them. “Now we have the hardcore founders, the people who really are driven by building economically viable, long-term, massively impactful companies, and the investors who understand the markets very well, coming together around clean business models that aren’t dependent on swinging from one subsidy vine to the next subsidy vine,” Beebe told me.
“There is no opportunity that’s an absolute no, even in this current situation, across the entire space,” the anonymous climate tech investor told me. “And so this might be one of the most important points — I won’t say a high point, necessarily — but it might be a moment of truth that the energy transition needs to embrace.”
On the energy secretary’s keynote, Ontario’s electricity surcharge, and record solar power
Current conditions: Critical fire weather returns to New Mexico and Texas and will remain through Saturday • Sharks have been spotted in flooded canals along Australia’s Gold Coast after Cyclone Alfred dropped more than two feet of rain • A tanker carrying jet fuel is still burning after it collided with a cargo ship in the North Sea yesterday. The ship was transporting toxic chemicals that could devastate ecosystems along England’s northeast coast.
In a keynote speech at the energy industry’s annual CERAWeek conference, Energy Secretary Chris Wright told executives and policymakers that the Trump administration sees climate change as “a side effect of building the modern world,” and said that “everything in life involves trade-offs." He pledged to “end the Biden administration’s irrational, quasi-religious policies on climate change” and insisted he’s not a climate change denier, but rather a “climate realist.” According toThe New York Times, “Mr. Wright’s speech was greeted with enthusiastic applause.” Wright also reportedly told fossil fuel bosses he intended to speed up permitting for their projects.
Other things overheard at Day 1 of CERAWeek:
The premier of Canada’s Ontario province announced he is hiking fees on electricity exported to the U.S. by 25%, escalating the trade war kicked off by President Trump’s tariffs on Canadian goods, including a 10% tariff on Canadian energy resources. The decision could affect prices in Minnesota, New York, and Michigan, which get some of their electricity from the province. Ontario Premier Doug Ford estimated the surcharge will add about $70 to the monthly bills of affected customers. “I will not hesitate to increase this charge,” Ford said. “If the United States escalates, I will not hesitate to shut the electricity off completely.” The U.S. tariffs went into effect on March 4. Trump issued another 30-day pause just days later, but Ford said Ontario “will not relent” until the threat of tariffs is gone for good.
There was a lot of news from the White House yesterday that relates to climate and the energy transition. Here’s a quick rundown:
The EPA cancelled hundreds of environmental justice grants: EPA Administrator Lee Zeldin and Elon Musk’s so-called Department of Government Efficiency nixed 400 grants across environmental justice programs and diversity, equity, and inclusion programs worth $1.7 billion. Zeldin said this round of cuts “was our biggest yet.”
Transportation Secretary Sean Duffy rescinded Biden memos about infrastructure projects: The two memos encouraged states to prioritize climate change resilience in infrastructure projects funded by the Bipartisan Infrastructure Law, and to include under-represented groups when planning projects.
The military ended funding for climate studies: This one technically broke on Friday. The Department of Defense is scrapping its funding for social science research, which covers climate change studies. In a post on X, Defense Secretary Pete Hegseth said DOD “does not do climate change crap. We do training and war fighting.”
Meanwhile, a second nonprofit – the Coalition for Green Capital – filed a lawsuit against Citibank over climate grant money awarded under the Inflation Reduction Act but frozen by Zeldin’s EPA. Climate United filed a similar lawsuit (but targeting the EPA, as well as Citibank) on Saturday.
A new report from the Princeton ZERO Lab’s REPEAT Project examines the potential consequences of the Trump administration’s plans to kill existing EV tax credits and repeal EPA tailpipe regulations. It finds that, compared to a scenario in which the current policies are kept in place:
“In other words, killing the IRA tax credits for EVs will decimate the nascent renaissance in vehicle and battery manufacturing investment and employment we’re currently seeing play out across the United States,” said Jesse Jenkins, an assistant professor and expert in energy systems engineering and policy at Princeton University and head of the REPEAT Project. (Jenkins is also the co-host of Heatmap’s Shift Key podcast.)
REPEAT Project
The U.S. installed nearly 50 gigawatts of new solar power capacity last year, up 21% from 2023, according to a new report from the Solar Energy Industries Association (SEIA) and Wood Mackenzie. That’s a record, and the largest annual grid capacity increase from any energy technology in the U.S. in more than 20 years. Combined with storage, solar represents 84% of all new grid capacity added in 2024.
SEIA and Wood Mackenzie
Last year was “the year of materialization of the IRA,” with supply chains becoming more resilient and interest from utilities and corporate buyers growing. Installations are expected to remain steady this year, with little growth, because of policy uncertainty. Total U.S. solar capacity is expected to reach 739 GW by 2035, but this depends on policy. The worst case scenario shows a 130 GW decline in deployment through 2035, which would represent $250 billion in lost investments.
“Last year’s record-level of installations was aided by several solar policies and credits within the Inflation Reduction Act that helped drive interest in the solar market,” said Sylvia Levya Martinez, a principal analyst of North America utility-scale solar for Wood Mackenzie. “We still have many challenges ahead, including unprecedented load growth on the power grid. If many of these policies were eliminated or significantly altered, it would be very detrimental to the industry’s continued growth.”
Tesla shares plunged yesterday by 15%, marking the company’s worst day on the market since 2020 and erasing its post-election stock bump.