He's Hot to trot: Howard Lutnick and the battle for Trump's climate agenda

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(David Callaway is founder and Editor-in-Chief of Callaway Climate Insights. He is the former president of the World Editors Forum, Editor-in-Chief of USA Today and MarketWatch, and CEO of TheStreet Inc. His climate columns have appeared in USA Today, The Independent, and New Thinking magazine).

SAN FRANCISCO (Callaway Climate Insights) — At first glance, Howard Lutnick’s nomination as Commerce Secretary this week by President-elect Donald Trump might seem like a consolation prize for not getting Treasury Secretary, which he fought for as head of Trump’s transition team.

But the traditionally low-profile role of commerce in a presidential cabinet takes on extra significance under this new Trump regime and might position Lutnick as the key driver of any anti-climate agenda Trump deems to follow.

A scrappy Long Island Jew who grew from a modest upbringing to the top of world — literally — on Wall Street as CEO of bond house Cantor Fitzgerald, only to watch in horror as the terrorist attacks killed his brother and hundreds of colleagues in the World Trade Center on 9/11, Lutnick knows a thing about fighting back.

He rebuilt Cantor and has long been an economic adviser of Trump, as well as a leader in the cryptocurrency business for years, making him a sort of éminence grise in Republican politics representing Wall Street’s interests.

Key figure
For the climate world, Lutnick’s confirmation hearings will be required viewing, as he hasn’t said much about his position on climate change, other than that it is an issue for elites and not real people. But as head of commerce, he’ll be Trump’s key guy on tariffs, and particularly tariffs against China.

We expect he’ll start with Chinese solar panels and EVs and go from there. How big of a trade war Trump is willing to start with China will depend a lot on Lutnick’s guidance. His second impact will likely be along the lines of energy demand for data centers. As a crypto hawk, Lutnick is well experienced in the controversy over excessive energy usage and we guess he’ll come down on the side of Big Tech in allowing as much energy to be developed as possible to power the data centers.

Finally, and most at question, is whether Trump will go through with his plan to gut government agencies focused on science and weather, such as the National Oceanic and Atmospheric Administration (NOAA). That group falls under supervision of commerce and is responsible for forecasting weather conditions but also scientific study of changes to the world’s environment.

Other than maybe NATO, there is no governmental group that Trump disdains more. How far he is willing to go to send a message without threatening all of NOAA’s important work will largely depend on Lutnick’s management prowess.

Rivalries ahead?
As of this writing, Trump has still to pick a Treasury secretary. There are three candidates left after Lutnick was given commerce, with Apollo Global Management chief Marc Rowan the latest favorite. We expect whoever wins will become an instant rival for Lutnick in the cabinet. If it’s Rowan, the two may bond over issues such as Israel and Gaza but likely compete for Trump’s affections on Wall Street.

Judging from the lessons of Trump’s first term cabinet, which included the likes of Steven Mnuchin, Rex Tillerson and Wilbur Ross, a Wall Street veteran who was commerce secretary, there will be instant factions and rivalries come January, with Trump quick to shift people in and out depending on his whims.

Ross came in with the most gravitas of anyone after a glittering Wall Street career, but was quickly neutered by Trump and by other, younger cabinet members. We expect Lutnick, Rowan and the others all are acutely aware of what they are getting into, and that their time to make an impact might be fleeting.

For climate investors, though, Lutnick is the one to watch.