Despite Donald Trump's promise to boost fossil-fuel production, the economic and technological forces driving the clean-energy revolution cannot be stopped. The global transition will power forward, even if America has abandoned climate leadership, and even if the road ahead includes a few more bumps.
NEW YORK – Donald Trump’s return to the White House has raised fears that the global energy transition will be thrown into reverse. The US president has vowed to “drill, baby, drill,” roll back environmental regulations, and end the “green new scam.” As Earth continues to warm – last month was the hottest January on record, and 2024 was the first year with global average temperatures exceeding 1.5° Celsius above pre-industrial levels – many worry that we are about to witness a worldwide slowdown in the shift away from fossil fuels.
But Trump couldn’t kill the green transition during his first term, and he can’t kill it this time, either. The reason is simple: Technological breakthroughs, steep learning curves, and plummeting costs have made clean energy cheaper than fossil fuels in most places. Moreover, the revolution was just getting started in 2017, whereas now it has reached escape velocity. Its momentum is being driven not by politics or government intervention, but by markets. The fact that deep-red (Republican-leaning) Texas leads the United States in renewables deployment is a case in point. Politics will no longer hold back the American energy transition.
This is not to say that politics won’t slow the US transition. The Trump administration is already taking steps to loosen environmental and climate regulations, promote domestic oil and gas production, support gas-fired power plants, and end incentives to adopt clean energy and electric vehicles (EVs). The president’s day-one executive orders expanded the federal lands available for oil and gas exploration, reversed former President Joe Biden’s suspension of approvals for new liquefied natural gas terminals, and paused new wind projects on federal land and coastal waters. Aided by Republican majorities in Congress, Trump will seek to repeal roughly half of the Inflation Reduction Act’s outlays, including its provisions supporting EVs and offshore wind, as well as the IRA’s investment and production tax credits.
Yet that will not be enough to halt the forward movement of the US energy transition. Despite Trump’s claims of a “national energy emergency,” the US has been a net energy exporter since 2019 and already produces more oil than any country in history. Yet with prices low and US oil and gas output already at record levels, fossil-fuel production will struggle to rise much higher in the near term, regardless of what Trump does.
The deployment of clean energy will therefore continue, driven by increasing power demand and declining costs – especially for solar. American electric utilities will still invest aggressively in renewables to keep pace with rising energy use and ensure grid adequacy, even as new gas-fired power plants expand, too. US automakers will not abandon their long-term EV plans just because the Trump administration has eliminated subsidies and canceled funding for charging infrastructure. Besides, Democratic-controlled states will continue pursuing ambitious standard-setting decarbonization policies, as they did during Trump’s first term.
Perhaps more importantly, meaningful parts of the IRA will remain in place because of their political support with Republican constituencies, which have benefited disproportionately from the new investments and job creation. Next-generation clean-energy technologies – nuclear, geothermal, and carbon capture and storage – will continue receiving support.
It is not too late to watch our AI Action Summit event.
Click the link to watch world leaders, tech experts, and other distinguished speakers – including Justin Trudeau, Petr Pavel, Daron Acemoglu, Reid Hoffman, Marianna Mazzucato, James Manyiga, Audrey Tang, Sylvain Duranton, Celina Lee, Patrick Pouyanné, and others – discuss some of the most important questions raised by the rise of artificial intelligence.
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As for the energy transition abroad, the implications of America’s retreat from global climate leadership will be significant, but not fatal. Trump’s decision to withdraw the US from the Paris climate agreement (again) and withhold funding from the United Nations Framework Convention on Climate Change will reduce climate-finance flows for emerging economies, dampening their enthusiasm for accelerated climate action and encouraging some (like Argentina and Indonesia) to follow Trump’s lead.
But just as the US transition is unstoppable, so, too, is the global transition. Other industrialized countries will remain broadly committed to the Paris climate agreement and subject to the same market forces that are driving developments in the US. Europe views the energy transition as a way to reduce its import reliance and improve its energy security. India, the world’s fastest-growing emitter, sees decarbonization as an economic opportunity and a necessary step to reduce some of the world’s worst air pollution. And most other emerging markets are eager to accelerate their renewables deployment for purely economic reasons.
Most critically, China – the largest source of global emissions – is set to reach peak emissions five years ahead of its previously stated 2030 target. Chinese manufacturers of solar panels, EVs, and batteries already dominate global supply chains and will not abandon their ambitions to expand simply because of changes in US demand or market access. If anything, they see the Trump administration’s policies as an opportunity to gain global market share, speeding adoption of these technologies and driving further price declines. While the US falls further behind China in clean energy, the continuing decline in renewable power costs will encourage more emerging markets to choose domestic solar and wind over volatile imported fossil fuels.
The economic and technological forces driving the clean-energy revolution have simply become too powerful for any single country or political leader to stop. The global energy transition will power forward, even if the road ahead includes a few more bumps.
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Daniel Gros
hopes that a Chinese startup's apparent AI breakthrough will provide a much-needed boost to European competitiveness, advises the EU on how to deal with Donald Trump, urges Europe to improve conditions for bottom-up innovation, and more.
Despite Donald Trump's promise to boost fossil-fuel production, the economic and technological forces driving the clean-energy revolution cannot be stopped. The global transition will power forward, even if America has abandoned climate leadership, and even if the road ahead includes a few more bumps.
assuages fears that the global energy transition will be thrown into reverse by the new US administration.
Perhaps US efforts to cut off China’s access to advanced semiconductors will be more successful than analogous restrictions on tech exports to France in the 1960s. But we now have at least one data point – DeepSeek – that suggests otherwise.
questions the effectiveness of efforts to limit China’s access to advanced semiconductors.
NEW YORK – Donald Trump’s return to the White House has raised fears that the global energy transition will be thrown into reverse. The US president has vowed to “drill, baby, drill,” roll back environmental regulations, and end the “green new scam.” As Earth continues to warm – last month was the hottest January on record, and 2024 was the first year with global average temperatures exceeding 1.5° Celsius above pre-industrial levels – many worry that we are about to witness a worldwide slowdown in the shift away from fossil fuels.
But Trump couldn’t kill the green transition during his first term, and he can’t kill it this time, either. The reason is simple: Technological breakthroughs, steep learning curves, and plummeting costs have made clean energy cheaper than fossil fuels in most places. Moreover, the revolution was just getting started in 2017, whereas now it has reached escape velocity. Its momentum is being driven not by politics or government intervention, but by markets. The fact that deep-red (Republican-leaning) Texas leads the United States in renewables deployment is a case in point. Politics will no longer hold back the American energy transition.
This is not to say that politics won’t slow the US transition. The Trump administration is already taking steps to loosen environmental and climate regulations, promote domestic oil and gas production, support gas-fired power plants, and end incentives to adopt clean energy and electric vehicles (EVs). The president’s day-one executive orders expanded the federal lands available for oil and gas exploration, reversed former President Joe Biden’s suspension of approvals for new liquefied natural gas terminals, and paused new wind projects on federal land and coastal waters. Aided by Republican majorities in Congress, Trump will seek to repeal roughly half of the Inflation Reduction Act’s outlays, including its provisions supporting EVs and offshore wind, as well as the IRA’s investment and production tax credits.
Yet that will not be enough to halt the forward movement of the US energy transition. Despite Trump’s claims of a “national energy emergency,” the US has been a net energy exporter since 2019 and already produces more oil than any country in history. Yet with prices low and US oil and gas output already at record levels, fossil-fuel production will struggle to rise much higher in the near term, regardless of what Trump does.
The deployment of clean energy will therefore continue, driven by increasing power demand and declining costs – especially for solar. American electric utilities will still invest aggressively in renewables to keep pace with rising energy use and ensure grid adequacy, even as new gas-fired power plants expand, too. US automakers will not abandon their long-term EV plans just because the Trump administration has eliminated subsidies and canceled funding for charging infrastructure. Besides, Democratic-controlled states will continue pursuing ambitious standard-setting decarbonization policies, as they did during Trump’s first term.
Perhaps more importantly, meaningful parts of the IRA will remain in place because of their political support with Republican constituencies, which have benefited disproportionately from the new investments and job creation. Next-generation clean-energy technologies – nuclear, geothermal, and carbon capture and storage – will continue receiving support.
PS Events: AI Action Summit 2025
It is not too late to watch our AI Action Summit event.
Click the link to watch world leaders, tech experts, and other distinguished speakers – including Justin Trudeau, Petr Pavel, Daron Acemoglu, Reid Hoffman, Marianna Mazzucato, James Manyiga, Audrey Tang, Sylvain Duranton, Celina Lee, Patrick Pouyanné, and others – discuss some of the most important questions raised by the rise of artificial intelligence.
Watch Now
As for the energy transition abroad, the implications of America’s retreat from global climate leadership will be significant, but not fatal. Trump’s decision to withdraw the US from the Paris climate agreement (again) and withhold funding from the United Nations Framework Convention on Climate Change will reduce climate-finance flows for emerging economies, dampening their enthusiasm for accelerated climate action and encouraging some (like Argentina and Indonesia) to follow Trump’s lead.
But just as the US transition is unstoppable, so, too, is the global transition. Other industrialized countries will remain broadly committed to the Paris climate agreement and subject to the same market forces that are driving developments in the US. Europe views the energy transition as a way to reduce its import reliance and improve its energy security. India, the world’s fastest-growing emitter, sees decarbonization as an economic opportunity and a necessary step to reduce some of the world’s worst air pollution. And most other emerging markets are eager to accelerate their renewables deployment for purely economic reasons.
Most critically, China – the largest source of global emissions – is set to reach peak emissions five years ahead of its previously stated 2030 target. Chinese manufacturers of solar panels, EVs, and batteries already dominate global supply chains and will not abandon their ambitions to expand simply because of changes in US demand or market access. If anything, they see the Trump administration’s policies as an opportunity to gain global market share, speeding adoption of these technologies and driving further price declines. While the US falls further behind China in clean energy, the continuing decline in renewable power costs will encourage more emerging markets to choose domestic solar and wind over volatile imported fossil fuels.
The economic and technological forces driving the clean-energy revolution have simply become too powerful for any single country or political leader to stop. The global energy transition will power forward, even if the road ahead includes a few more bumps.