3 reasons why a Trump administration may not slow climate progress as much as it could

With COP29, the UN climate summit in Azerbaijan, now underway, those trying to accelerate the transition away from fossil fuels have a new reason to worry: The man elected to be the next president of the United States, Donald Trump, has declared that climate change is “a big hoax.”Given his posture, many experts fear that a Trump White House will, once again, exit the Paris climate agreement, as he has vowed to do. The new administration is poised to slash environmental regulations and allow for a surge of oil and gas drilling. Although Trump distanced himself during the campaign from Project 2025, the right-wing blueprint to reshape government, his administration is widely expected to embrace its call for “a whole-of-government unwinding” of what it termed “the Biden administration’s climate fanaticism.”We are not naïve. Reaching the essential goal reaffirmed last year by global leaders at the COP28 Summit—net-zero greenhouse gas emissions by 2050—has undoubtedly become a lot harder with Trump set to return to the Oval Office.And yet we remain hopeful that all is not lost. Even with Trump in power—and the Republicans about to take control of both houses of Congress—we are confident that the country and the world will make steady progress on climate change for three main reasons.

Momentum in capital markets

First and foremost is the tremendous momentum that has built up over the past decade in private capital markets to tackle the crisis.From 2013 to the end of 2023, a proliferation of climate-dedicated funds has driven a 25x increase in global climate venture capital. The total amount of VC dollars invested in climate tech has tripled from less than 5% in 2013 to 16% in 2023.

Today, seven of the top 10 private equity firms, as measured by assets under management, have climate-focused funds. Global spending on clean energy technologies and infrastructure is on track to hit $2 trillion, twice the amount going to fossil fuels.Some 75 venture capital arms of major corporations, known as CVCs, have also become prominent players in the space. In 2021, these corporate funds pumped $11 billion into climate and energy transition technologies, accounting for about a quarter of all such public and private investments that year.Supporting the extended timelines necessary for developing and scaling climate technologies are green bonds, sales of which topped $1 trillion in 2023.To be sure, we still have a long way to go. Getting to net-zero by 2050 will require boosting annual spending by more than 60%, to $9.2 trillion a year, to transform our energy and land-use systems. But the bottom line is this: The private sector is now so committed to combating climate change, there is no turning back.

Political headwinds

The second thing that gives us hope is political reality. Trump has vowed to dismantle the Inflation Reduction Act, which was designed to spur clean energy projects through grants, loans, and tax credits. But we’re not convinced that he’ll be able to do so.In the two years since President Biden signed the IRA into law, with no Republican support, investment in green energy has accounted for more than half of total U.S. private investment growth, resulting in the creation of some 330,000 new jobs (about 40% in batteries, 20% in solar, and 13% in clean tech). More than 550 factories have been expanded or built in 46 states. Amazingly, this surge in private investment has occurred with no more than 20% of IRA incentives deployed as of yet.Even if Trump is truly determined to gut the IRA, which he has dubbed “the Green New Scam,” it won’t be easy. Why? The vast majority of the funds are being directed to parts of the country that have been left behind—and that largely means red America. In fact, for every $1 in investment that’s going to a Democratic congressional district, $4 are going to Republican congressional districts, according to Jay Turner, a professor of environmental studies at Wellesley College. Any lawmaker, even if they’re staunchly loyal to Trump, is going to think long and hard before giving that up.

Developing a clean workforce

The third thing that gives us hope is this: One of the most important areas we need to address to get to net-zero—attracting and training a new clean-energy workforce—is something that the Trump administration may actually wind up helping with.In all, some 4 million green jobs are expected to be created over the next five or six years—and it is far from certain who is going to fill them. At Angeleno Group, one of the longest-standing venture capital and growth equity investment firms dedicated to clean energy and climate solutions, we hear all the time from our portfolio companies that one of their biggest challenges is finding the skilled workers they need.We don’t anticipate that the Trump administration will train legions of, say, EV charger technicians. But many of the most in-demand roles to help with our energy transition are in the skilled trades—construction workers, electricians, welders and so forth—and Trump has shown an interest in boosting industry-recognized apprenticeships in such fields. In this way, we may be able to make headway in cultivating a green workforce, even if the new administration won’t recognize it as such.The world stands at the precipice of irreversible climate change. We continue to believe, however, that we can pull back from the brink—the president-elect’s climate denialism notwithstanding.