Washington 2025 outlook: What cleantech policies will survive under President Trump?

(Bill Sternberg is a veteran Washington journalist and former editorial page editor of USA Today.)

WASHINGTON, D.C. (Callaway Climate Insights) — If the classic holiday poem by Clement Clarke Moore were adapted to contemporary politics, it might open something like this:

’Twas the night before Christmas, when all through the White House
Joe Biden’s aides were prepping for the return of the louse.
The climate funds were spent with no time to spare
In fears that Donald Trump soon would be there.

As Joe Biden gets ready to vacate the presidency next month, staffers at agencies ranging from the EPA to Energy to Treasury are racing to Trump-proof the incumbent’s climate legacy — a legacy that is consequential, contradictory and vulnerable.

During his four-year term, Biden did more to combat global warming than any previous president. His signature climate law, the Inflation Reduction Act, directs hundreds of billions of dollars toward clean-energy programs. He also returned the United States to the 2015 Paris climate accords, enacted new fuel economy rules for cars and trucks, and set stringent limits on carbon dioxide emissions from power plants.

At the same time, in an effort to keep gasoline prices low and boost his (and later Kamala Harris’) election prospects, Biden took a number of actions contrary to his climate goals. On his watch, the U.S. produced more crude oil than any other nation, and exports of natural gas hit record levels. He tapped the strategic petroleum reserve, approved the controversial Willow drilling project in Alaska, and maintained tariffs that protect U.S. companies but make cleantech adoption slower and more costly.

This balancing act satisfied neither climate activists who want faster action nor conservatives who think the threat is overblown. With Trump poised to reoccupy the White House on Jan. 20 and Republicans narrowly in control of both chambers of Congress, the question consuming policymakers, entrepreneurs and investors is: How much of Biden’s climate legacy will survive the second Trump administration?

The short answer is: It depends.

The outlook varies from program to program. Much is contingent on whether changes can be made administratively or require an act of Congress, and whether there is bipartisan support for a particular investment. Here are some key areas to watch, along with best guesses about their fate.

Electric vehicle subsidies: Biden’s climate law provides federal tax credits of up to $7,500 for qualified buyers of certain EVs. Despite the domestic content requirements, the incentives have never been popular with Republicans and their fossil-fuel donors. Now the credits are prime targets for GOP lawmakers looking for ways to help offset the costs of extending Trump’s first-term tax cuts. Moreover, First Buddy Elon Musk has said that killing the tax credits would hurt his rivals more than it would harm Tesla. If the federal tax credits expire because of regulatory or congressional action, California and some other states will try to fill the void for their residents.

Outlook: Prospects for retaining the federal EV tax credits are slim to none, and slim is leaving town in a Cybertruck.

Other tax credits: The IRA contains a multitude of other tax incentives designed to help decarbonize the economy, and most of these are on firmer political ground. An estimated 80% of the law’s clean-energy money has gone to Republican congressional districts, and 18 GOP House members wrote to House Speaker Mike Johnson in August in support of retaining these credits. That could set up a situation where the government is continuing to pour support into battery manufacturing plants for electric vehicles but withdrawing support to help drivers purchase those EVs. Tax breaks for carbon capture, nuclear power and advanced manufacturing have significant bipartisan backing; other credits face rockier fights because of Trump’s hostility toward wind and solar power.

Outlook: Full repeal of the IRA is unlikely, but Republicans will seek to shorten the phase-out dates for credits that support clean power investments. Expect intense lobbying and dealmaking as the Trump tax bills take shape next year.

Climate disclosure: Under Chairman Gary Gensler, the Securities and Exchange Commission adopted a landmark rule requiring companies for the first time to disclose their climate-related risks and greenhouse gas emissions in a standardized way. Currently, according to the SEC, only about one-fifth of publicly traded companies provide some information about their greenhouse gas emissions, and one-third disclose climate-related risks. The 885-page rule, adopted on a 3-2 vote after years of discussion and more than 24,000 comment letters, is on pause because of legal challenges. Gensler is on his way out, to be replaced by Paul Atkins, a pro-business conservative who is on record against the climate rule.

Outlook: Never mind. The new SEC will move to rescind its rule or simply instruct the Justice Department not to defend it in court. Some companies will continue to report emissions, particularly if they operate in Europe; others will “mushroom” investors (keep them in the dark and feed them a lot of manure) about their gauzy plans to reach net-zero someday.

Postal Service vehicles: As part of an effort to modernize its fleet, the Postal Service has contracts with Oshkosh, Ford and other companies for tens of thousands of battery-electric delivery trucks and chargers. According to Reuters, Trump’s transition team is looking at canceling the contracts as part of a package of executive orders targeting EVs, though terminating the contracts could be legally challenging.

Outlook: Mixed mail. The most likely outcome is that the combination of new postal vehicles is likely to shift away from EVs and more toward trucks powered by fossil fuels.

Energy Department loans: The department’s Loan Programs Office (LPO), which operates like a green bank inside the federal government, has been moving to close billions of dollars in loans in the final weeks of the Biden administration. Among the most high-profile loans is a $6.6 billion conditional commitment that would help EV-maker Rivian finance a new manufacturing plant in Georgia. Vivek Ramaswamy, Musk’s co-chair on a commission to make government more efficient, has already targeted the Rivian loan and others like it, claiming that “there’s no way that that money will ever get paid back.” But efforts to kill loans that support projects in red states and congressional districts could run into resistance from Republican lawmakers.

Outlook: Deep freeze. The LPO is likely to go largely dormant, as it did during the first Trump administration. It could stop issuing new loans — except to favored industries such as nuclear — and attempt to claw back conditional ones.

Paris climate accord: The Paris Agreement, with its voluntary pledge-drive approach toward emission reductions, is failing to achieve the goal of holding global temperature increases to 1.5°C above pre-industrial levels. Trump withdrew the United States from the Paris agreement in his first term, Biden rejoined it, and all indications are that Trump will pull out again. Lack of participation by the U.S., the world’s largest historical emitter of greenhouse gases and second to China in current emissions, will make it an outlier. As the agreement falters, the fate of the planet will be less dependent on international cooperation and more dependent on technological breakthroughs.

Outlook: Au revoir. We won’t always have Paris.