What the Trump Election Means for Climate Innovation
The Business Case For Sustainability Didn't Change Overnight
Like me, you’re probably still processing last night’s US election results. I’ll leave discussions of foreign policy impacts and the implications for representative democracy to others.
But if, like me, you’re panicked about what the election means for the future of the climate crisis, there’s a couple of clear takeaways and a cause for (slight) optimism.
First, let’s go dark.
Donald Trump, as a candidate, dismissed climate change as “a scam”. Project 2025, the closest thing to a policy roadmap for the new administration, lays out a plan to dismantle existing federal climate initiatives and undercut current efforts to address climate change. What funding that hasn’t yet been spent from the Inflation Reduction Act is likely to be pulled back. Full-scale repeal of recent climate regulations, including repealing all emissions controls from power plants and automobiles, was an explicit campaign promise.
In short: Don’t expect any positive progress on federal climate policy over the next 4 years (and expect a rapid increase in oil & gas extraction and other negative impacts).
And Yet, Hope
Obviously it would have been better to an incoming administration that’s serious about addressing the climate crisis. But, all hope isn’t lost.
Consider:
1/ State-level regulations. How much can states do to enact their own climate policies and divorce themselves from the federal apparatus?
California is taking the lead on state-level policy, and as the fifth largest economy in the world (if it were a nation, it would be just shy of Japan in terms of GDP) it’s lead matters. It’s market size makes it a critical market for any company—from automobiles to consumer products to industrial goods—and, if its policies stand, companies will have to meet its climate regulations regardless of federal guidelines.
A dozen other states also follow California’s climate policies, the highest profile of which is a ban on the sale of all new gas-powered vehicles after 2035.
Acutely aware of the risk to their policies, California officials have been working feverishly to “Trump-proof” their climate policies.
Will all their state policies stand? Probably not—in the wake of the Supreme Court’s Chevron ruling, a conservative court could strike down any of the state’s regulations.
But if you’re a business leader weighing whether to comply with California’s proposed rules or not, it’s a far safer bet to comply with them now—when the cost of compliance is manageable—than risk everything on the regulations never becoming law. The cost-benefit calculus may change, but the answer is the same.
2/ The Business Case. If you’re a business leader, remember that the rationale for adopting climate-positive technologies isn't just getting ahead of future regulations—it’s in your business’ financial interest today to do so.
Remember data like this:
For the vast majority of climate solutions (in the chart above, everything on the left), the long-term profit from implementing the solution for your business far outweighs the cost of implementation.
Implementing climate solutions in your business, then, comes down to a simple question:
“Would you like to increase your profitability?”
Or, as researchers at the Columbia Business School put it:
[T]he technological revolution and fundamental market forces driving the low-carbon transition are too strong for this policy seesaw. Trump could, would, and already is delaying clean investments – and any such delay is bad. But this is just delaying the inevitable. Even a Trump victory this November could not halt it.
No one can stop the market.
And market forces are moving towards more climate-friendly technologies for a simple reason: They make more money.
Is a Trump 2.0 administration bad for the climate? Unquestionably.
Progress will be slower, and that alone has disastrous consequences. Elections have consequences. The market is moving in the right direction, but markets often move slowly.
But is there room for optimism? Yes.
Now is still the time to incorporate climate innovation into your business: It made financial sense yesterday and still makes sense today.