President Donald Trump's step back on climate policy might lead businesses to downplay their carbon reduction efforts and environmental initiatives. Rather than highlight goals like net zero, they might work quietly behind the scenes.
Sanjay Patnaik, director of the Center on Regulation and Markets at the Brookings Institution, said businesses might still pursue climate goals in the background. However, due to the changing political environment, "they will not shout it from the rooftops and say, 'Look, we're decarbonizing, we're sustainable.'"
Gartner analyst Janel Everly agreed that businesses emphasizing environmental and sustainability initiatives will likely shift to "quiet leadership." Everly said that while she expects companies with such initiatives to remain steadfast in their approach, climate goal announcements will be fewer.
It's going to be a change of vernacular around positioning, but I don't know that it's going to change their approach or their business model.
Janel EverlyAnalyst, Gartner
"It's going to be a change of vernacular around positioning, but I don't know that it's going to change their approach or their business model," she said. "They're already in the process of transforming their business model, so they'll capitalize on those continued advancements."
Trump revokes Biden's U.S. climate policy executive orders
In Trump's executive order "Unleashing American Energy," he said that U.S. policy will focus on energy exploration on federal lands and waters, becoming a leading producer and processor of rare earth minerals and eliminating what he calls the "electric vehicle mandate."
Trump also directed agency heads to review existing regulations and policies that impose burdens on identification of domestic energy resources including oil, natural gas, nuclear energy, critical minerals and coal.
Trump also revoked several of Biden's U.S. climate policy executive orders, including the 2021 orders "Tackling the Climate Crisis at Home and Abroad," "Climate-Related Financial Risk" and "Catalyzing Clean Energy Industries and Jobs Through Federal Sustainability."
In Trump's executive order, he said under the Biden administration, "burdensome and ideologically motivated regulations have impeded the development of these resources, limited the generation of reliable and affordable electricity, reduced job creation, and inflicted high energy costs upon our citizens."
It's not surprising to see the Trump administration shift course on U.S. climate policy, Patnaik said. Between Republican and Democratic administrations, U.S. climate policy experiences the most extreme course changes, he said.
Gartner's Everly said Trump's moves on climate policy are a "complete gut." Businesses will see greater fragmentation between the federal government, international governments and states like California, which have advanced climate rules for businesses.
"I believe that we will see states that are going to double down and say, 'We already have these policies in place,'" she said.
Everly said she worries that the U.S. will become a laggard long-term on investments in renewable energy and development of clean energy technologies like solar panels due to the Trump administration's changes to climate policy.
Paris Agreement exit, end to Inflation Reduction Act provisions
Trump signed an executive order to withdraw the U.S. from the Paris Agreement, an international climate treaty signed by 196 countries in 2015. He also pulled out of the Paris Agreement during his first administration.
Patnaik said the Paris Agreement is mostly symbolic and not enforceable, meaning the impact of Trump's decision to exit the agreement will be minimal.
"That's not going to affect much in terms of what's happening in the marketplace," he said.
What will have a greater impact on U.S. businesses is what Trump decides to do with the Inflation Reduction Act (IRA), Patnaik said.
The "Unleashing American Energy" executive order revoked Biden's order on the IRA, halting federal funding for the expansion of electric vehicle charging stations in the U.S. The Biden administration sought to jumpstart clean energy market trends and technologies, including electric vehicles, through clean energy incentives provided by the IRA.
Congress passed the IRA, making it harder for Trump to repeal the law completely. Republicans would have to pass a repeal in Congress and given the slim majority hold as well as the number of Republican states that have received IRA funding, Patnaik said it's unlikely. Indeed, 18 House Republicans penned a letter in August asking to keep certain IRA provisions.
Trump keeps critical minerals, permitting reform on radar
There are areas of similarity between the Biden and Trump administrations, including goals for domestically mining and processing critical minerals, Patnaik said.
U.S. policymakers have grown increasingly concerned about China's control of rare earth minerals used in critical technologies such as semiconductor chips that power vehicles, phones, computers and large artificial intelligence models.
"There are quite a lot of provisions in the IRA that tried to build that supply chain domestically," Patnaik said.
Permitting reform is another area Trump will focus on that carries over from the Biden administration, Patnaik said. Both Democrats and Republicans want changes to the lengthy permitting process, but in different areas, he added.
"They just can't agree on which," Patnaik said. "Republicans want to do fossil fuels, Democrats want to do renewables. But I think putting it on the radar is good."
Makenzie Holland is a senior news writer covering big tech and federal regulation. Prior to joining Informa TechTarget, she was a general assignment reporter for the Wilmington StarNews and a crime and education reporter at the Wabash Plain Dealer.
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