US | Trump 2.0’s Climate and Energy: Can Rollbacks Derail Decarbonization?

Summary

The House-passed budget, now before the Senate, backs fossil-fuel expansion over renewables. If this approach continues, U.S. decarbonization will likely slow, but it should not stop because of the economic rationale of the green transition.

Key points

• Key points:
• Policy pivot toward fossil fuels: The administration’s early actions set a clear preference for expanding domestic oil, gas, and coal while pausing support for key clean-energy technologies.
• Broad deregulation and legal pullback: Federal agencies are rolling back carbon, air-quality, and disclosure rules, lowering compliance costs but raising long-term climate and health risks.
• Fiscal and tax headwinds for clean investment: Proposed budget cuts and accelerated sunsets of green tax credits create uncertainty, already dampening new manufacturing projects and job growth.
• Economics still favor renewables: Even under policy pressure, rapid cost declines keep clean energy more competitive than fossil fuels, suggesting decarbonization will slow—but not reverse—over time.

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