Trump Alone Can’t Stop the Energy Transition

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We’re six weeks into the wildest presidential administration certainly of my lifetime and likely in modern U.S. history. From day one, energy has been a top theme. And, yet, the new Trump Administration hasn’t been the primary focus of my writing. There are several reasons for that. For one, I think it’s important to highlight that things are happening in spite of Trump. The global picture, while complicated, is far more promising than the domestic one. And, in the private sector, many companies are continuing their decarbonization initiatives.

But there’s perhaps another more fundamental reason: it’s really hard to speak definitively about what’s happening in Washington and what the implications will be for the future of climate. 

President Trump entered office with bold declarations. Many of those statements and policy moves will have concrete, devastating consequences for climate efforts; others are exaggerated or even meaningless. On the heels of his address to Congress this week, where he once again declared energy a top priority, I figured it’s the right time to take a first stab at identifying the signal in the noise.

A month and a half into Trump’s second term, there is no question that this administration will dramatically set back efforts to decarbonize the global economy, but dire warnings that clean energy is over and fossil fuels now reign supreme overstate reality. Politics and policy shape energy markets, but they do not control them. To dismiss the energy transition because Trump does would be to make a severe miscalculation.  

One of the biggest gaps between rhetoric and reality comes with Trump’s “drill baby drill” promise. Trump has promised to expand the country’s oil and gas production with an eye to economic growth and lower prices. To do that, he’s said the federal government will open wide swathes of land to drilling and promised to expedite approvals for fossil fuel infrastructure. 

There are a few key challenges to such a vision. Most importantly, even as Trump puts his finger on the scale, the market and simple economic questions will determine the appetite for new oil and gas drilling. In recent years, companies have been reluctant to make big, risky investments in new drilling, and it’s hard to imagine what Trump could do to change that. 

A core piece of his fossil agenda is his day one executive order declaring what he calls an “energy emergency.” The order promises to accelerate federal approvals for energy projects across the country—excluding wind and solar. But many questions remain. For one, the order is likely to be litigated at every turn in its implementation. “There are obstacles built into the system that only Congress can really remove,” said Michael Catanzaro, who served as an energy and environmental policy advisor at the first Trump White House and is now CEO of public affairs firm CGCN Group, at a Council on Foreign Relations (CFR) discussion I moderated this week.

And many analysts have said that whatever authorities are ultimately activated are likely to be used to improve the country’s electric grid and accelerate transmission—something that’s actually helpful for the energy transition because renewable energy is often located in remote places requiring long-distance wires to get to the grid. 

Let’s be clear. While some of Trump’s claims are often overstated or murky, there are other moves that will represent decisive setbacks to climate and clean energy efforts. The offshore wind sector comes to mind. That’s not only because Trump has a particular hatred for the electricity source but also because in general offshore wind farms require a greater number of and more complex federal permits than those needed for many other renewable energy projects.

Attacks on the National Oceanic and Atmospheric Administration (NOAA) threaten to undermine critical weather and climate data that companies use to make essential business decisions. Efforts to address environmental justice have been wrapped together with the much-maligned DEI, and it’s safe to say that such issues are no longer a concern of the federal government. And the administration is reportedly planning to target the Environmental Protection Agency’s “endangerment finding,” a scientific document that provides the legal basis for the agency to regulate greenhouse gas emissions. If Trump succeeds in nixing it, the move would eliminate the foundation of much of the U.S. regulatory regime around climate change. And, of course, a big test will come with the fate of the clean energy tax incentives in the Inflation Reduction Act. The list could go on and on.

So how do all of these variables shake out for the U.S. emissions trajectory? At this stage, it’s hard to know. A climate modeler faces the same challenges I do when trying to paint an accurate picture, only multiplied. But the truth is that factors outside of Washington are likely to play a significant role shaping the near-term future of U.S. emissions, most importantly the country’s rapidly growing electricity demand that is coming in large part as a result of data center expansion. Developers of these projects are racing to get electricity—often zero-emission but increasingly gas powered because it’s easier to get. 

“We are going to see a continuation across the board in the development of energy,” former Energy Secretary Ernie Moniz said at an American Council on Renewable Energy event last week. “It's a reality that most of the new capacity added has been renewables, second natural gas. I don’t see how that’s going to change.”

And then there are the knock-on effects around the rest of the world. Trump’s moves will inevitably inspire other like-minded countries to do the same. “There are lots of changes taking place, hard to keep up for everyone,” says Alice Hill, senior fellow for energy and the environment at CFR. “But I think it's clear that the world, as a result of President Trump's [decisions], is taking a step back on cutting its emissions.”

We’ve already seen pullback in places like Argentina and Indonesia. But there’s another way to think about the implications of Trump’s rollbacks in a global context. The U.S. represents about 12% of global emissions—the second highest share after China. That’s significant, but the U.S. is just a small piece of the puzzle. Whether other countries can find a way to put the puzzle together without the U.S. is another question entirely.