The impact of a Trump Presidency on the climate job market

Donald Trump has returned to the US Presidency with a resounding victory that no pollster or political pundit saw coming. Adding control of both Houses of Congress gives President-Elect Trump the political support needed to make sweeping policy changes. Atop President-Elect Trump’s list of priorities is to cancel or curtail significantly the bold climate initiatives the Biden Administration implemented anchored by the Inflation Reduction Act (IRA) and Bipartisan Infrastructure Law (BIL).

One of the Trump administration’s first acts will be to withdraw from the Paris Agreement, as it did in 2016. At COP21, 196 countries approved the Paris Agreement, which legally obligates them to reduce their CO2 emissions to keep global temperatures under 2C. As COP29 convenes in Baku, Azerbaijan, the world will be wondering if the US delegation?will be limited?in its financial support of developing countries to decarbonize.

The anxiety of anticipated sweeping rollbacks and changes to US climate policies is naturally high, not only because it will decelerate progress toward decarbonization but also because the job creation engines fueled by the IRA will come to an idling halt. According to an E2 report, clean energy programs awarded with IRA funds are expected to create 467,000 construction jobs and 154,000 operating jobs.?

Are those jobs at risk with the changes the Trump administration plans to make when they take over in January?

A look across the key climate sectors suggests the news will not be that bleak.

While the Trump Administration will curtail government investment and incentives in emerging climate technologies in favor of re-invigorating fossil fuel production, several resilient sectors of the climate economy will persist to grow. Solar, wind, and battery storage have appreciably accelerated down the cost curve to compete on price and performance with fossil fuels. Demand for these more affordable renewables will only continue to grow and employ more people.?

Hundreds of climate and energy initiatives launched during the Biden Administration should withstand outright cancellation. Nearly 80% of IRA-related programs were awarded to projects in Republican districts. Most of those funds have been awarded and have catalyzed billions in private funding. A group of 18 Republicans has publicly announced their support for keeping major tenets of the IRA intact.

States will need to play a bigger role in moving decarbonization forward, as a Trump government will promote an oil and gas-friendly energy agenda. States are already stepping in. Washington state voters upheld a current law requiring pollution-producing businesses to cap their emissions. California voters recently approved a $10 billion bond for environment and climate initiatives. State and local governments will continue to fund climate-related programs that create jobs and stimulate economic growth.?

The EV auto industry exploded during the Biden administration, with over 250,000 EVs sold using the $7500 tax credit. The Trump administration will move to phase out the tax credit. EV market share is approaching 9% of all cars on the road, and they are as cost-competitive as combustion engine cars, so their market share growth should persist without the credit.

Interest in nuclear has experienced a recent renaissance as Amazon, Google, and Microsoft announced investments or power purchase agreements (PPAs) for nuclear projects to power AI-driven data centers. Nuclear should benefit from bi-partisan support, as the first Trump administration guaranteed billions in loans to nuclear projects. Trump also signed the Nuclear Energy Innovation and Modernization Act (NEIMA), which, in part, is paving the pathway for modular nuclear licensing.

The development pace of climate solutions addressing hard-to-abate sectors like concrete, steel, synthetic, and air fuels (SAFs) over the next four years is hard to predict. These sectors benefitted from IRA funding (via DOE Loan Programs Office and Office of Clean Energy Demonstration) to kickstart construction of First Of A Kind (FOAK) projects to prove the production viability of these technologies. Private catalytic capital or project equity/debt funders like PRIME Coalition, Generate Capital, Spring Lane, and TPG’s Rise Fund will continue to carry FOAK projects forward.

The encouraging news for the climate tech job market is that large core renewable energy markets will continue to grow regardless of policy changes made by the Trump Administration. Newer technologies will rely primarily on the private sector to fund their path to commercialization while he's in office. Capital investing in promising decarbonization ventures will persist, requiring tens of thousands of people to enter the climate sector over the next four years.