Trump is Undoing Climate Action. Can Clean Energy Investments Survive?

You’ve probably heard of the old curse who says: “May you live in interesting moments.” These are certainly interesting moments for those in the technology sectors and climatic solutions.

With the adoption of his “big big” bill this month, President Donald Trump eliminated many of the federal government incentives that had launched hundreds of billions of dollars in clean energy investments, batteries, electric vehicles and other climatic solutions in the past three years.

The Trump Administration has removed the United States from the international climate agreements and has suppressed regulations on car and electricity sector emissions in order to bring the energy economy back to the dependence of fossil fuels.

But the return tour on the energy policy inducing the cervical boost in the United States is clearly in contradiction with the signals of the broader energy market. In the United States, renewable energies now represent approximately 90% of the new electricity capacity added to the network because the wind, solar energy and batteries have become the cheapest and fastest power sources of new power.

Globally, the International Energy Agency has indicated that the capital flowing in low carbon energy sources this year is almost double that of the development of fossil fuels, which raises the spectrum that the United States turns its back on one of the new fastest growth industries in the world.

Add to all the impacts of prices and commercial wars, and you have an unrivaled period of uncertainty for the own technological companies and the investors that support them. Interesting times indeed.

Better Planet has asked investors of prominent technology and climate solutions how they give meaning to this changing landscape and what they see in advance for a series that we call “climate investment in a volatile climate”.

In this first episode, we will hear Johanna Wolfson, co-founder and general partner at Azolla Ventures, a climate-focused venture capital fund, and Peter Davidson, founder and CEO of Climate Capital, an asset management company focused on companies that reduce greenhouse gas emissions.

Wolfson and Davidson both said Nowsweek The fact that Trump’s sudden policy changes on energy will slow down, but do not cease investment, and both predicted that solid economic arguments for clean technology will always attract capital.

“We see signs of an upcoming draw from other venture capital companies in clean technology,” said Wolfson. Climate investment will not be full, she said, but more recent companies and emerging technologies with higher risk will probably find it more difficult to attract capital. Her advice to clean technological companies: “Cut, do the work, build solutions and be ready,” she said.

Davidson said that even before the congress led by the Republicans voted to eliminate the tax credits on clean energies, the atmosphere of uncertainty already made cancel or reduce the projects announced.

“You can be depressed on this or you can continue the fight,” said Davidson. Despite political-opposite winds, he said, market forces work in favor of clean energy.

“It has become complicated because you have to avoid things that depend on federal tax policy,” said Davidson. “But there are many companies, many projects, which, in our view, are always very investable and can earn a very good return.”

“ It is a large world ” for climatic investors

Wolfson has described Azolla Ventures as a “catalytic capital” company which invests in climatic technologies at an early stage, using capital mainly from foundations exempt from tax and wise funds from donors. This allows Azolla to prioritize the positive climate impact when it decides companies to support.

“We take a disproportionate risk and we may do so at a previous time or in a different way from that of other climate-focused venture capital funds could be arranged,” she said. “We are looking for an impact on the Giga scale.”

A story of budding success, she said, is the sublime system of cement company Sublime Systems. Azolla has been an early funder, and sublime recently signed an agreement with Microsoft which is the largest supply agreement for proper cement to date.

Azolla’s approach also supposes a long delay for emerging own technologies to develop, she explained, a state of mind less sensitive to changing political winds.
“When we assess companies for investments, we examine market growth and emissions avoided until 2050,” said Wolfson. “It is much longer than a four -year administration.”

Wolfson has said that some clean energy sources are still well placed in favor of Trump’s policy, such as new nuclear technology and geothermal energy, which it plans to grow quickly while large technological companies take place to obtain stable power for AI data centers.

However, she said that the American leadership withdraws from climate action, a large part of the rest of the world goes ahead and that the investment dollars are likely to follow.

“It’s a big world,” said Wolfson. Some companies with which Azolla is now working to pilot new projects outside the United States, and its company helps them integrate into other markets. “We have to go where the first adopters are, and if that continues to change, these companies should go with it.”

Overall, Wolfson said, she is “deeply concerned” by the lack of global progress on climatic objectives. This makes Azolla more interested in support for an early stage for “Big Swing” technologies which have a potential for large -scale emissions.

“They will have to exhaust the programs more avoided because we do not keep the desired reduction,” she said. Azolla also plans to invest more in adaptation and resilience solutions to help the company better manage the impacts of climate change that is currently occurring.

“They will accelerate,” she said about extreme weather events focused on the climate. “We have mainly cooked that.”

An energy policy “Reckoning arrives”

Before launching an aligned climate capital, Peter Davidson had worked on the financing of energy projects at the Ministry of Energy (DOE), where he directed the DOE loan programs office under President Barack Obama and the Energy Secretary Ernest Moniz.

This long history with the public and private sectors informs its vision of what Trump 2.0 means for its own technological investment.

“We have already seen this film because we were in this company during Trump One,” said Davidson. “And throughout its first mandate, renewable deployment has never been higher, EV deployment has never been higher, business commitment to clean energy has never been higher. So we see the same things that happen here.”

The last series of alignment financing ended in March with $ 85 million, double the previous round and higher than the company’s target, said Davidson. The main objective of the company is to invest in proven technologies which can quickly evolve and support the construction of distributed electricity production such as community and medium -sized solar projects – which Davidson called the “silent battle horse” of clean energy transition.

“They are large enough for a significant impact, but you avoid administrative development formalities on the scale of public services,” he said.

Recent data from Federal Energy Regulatory Commission (FERC) show that even in the middle of the Trump administration assault on climate action, solar energy (often associated with batteries storage) remains the preferred means of adding energy as electricity demand increases.

During the first four months of this year, Ferc data has shown Solar represented 78% of the new capacity. For the future, the FERC expects 90 Gigawatts from New Solar to appear online over the next three years, against only 19 Gigawatts of new gas power. Coal electricity should drop more with the retirement of several older installations.

“The energy transition is underway and it is unstoppable,” said Davidson. Even with reduced tax credits, he argued, solar production is even cheaper to build than natural gas, and supply chain arrears for gas turbines mean that many gas projects will probably be delayed.

“So, everything that will be built in the United States in the next five years is what we do, the average size or the large scale of public services, wind and solar,” said Davidson.

However, renewable energies will not develop as quickly as it would have done with continuous tax credits and other support from the government. The existing fleet of natural gas power plants will occupy a large part of the upcoming electricity demand at the same time as the Trump administration promotes more exports of liquefied natural gas. This indicates an almost inevitable increase in energy prices, said Davidson.

Most of the independent analyzes of the “big beautiful” budget “signed that Trump on July 4 show a high increase in energy costs. Rhodium Group analysts consider that the law will increase national energy bills of average households by at least $ 78 and up to $ 192 while forcing total industrial energy expenses of at least $ 7 billion. tendency to be transmitted to consumers via higher prices for goods and services.)

Davidson predicted that the increase in energy prices will bring a political reaction.

“Finally, there will be a correction in the polls,” he said. “We think that a calculation is coming, and when that happens, it will bring a little more meaning and sensitivity to our energy policy.”

We will have more conversations with climate investors in the weeks preceding climate week in New York in September, when Nowsweek will organize events on energy and green transition. Mark your calendars for our events “Pillars of the Green Transition” on Wednesday September 24 and “Powering Ahead” on Thursday, September 25.