Are Climate Change Strategies Still Important in the Trump 2.0 Era?

With many decarbonization technologies already proving to be cost-competitive, we believe that climate change investment strategies remain highly relevant despite the short-term setbacks of Trump 2.0. For this reason, we believe that companies that help their investors reduce energy costs and carbon emissions remain well-positioned.

Electrification remains a major energy sector trend in the energy transition which will help with climate. Furthermore, we expect new power generation installations to continue to be dominated by renewables, as the cost of utility-scale wind and solar generation has already fallen to levels that make it a cheaper option than coal or new gas-fired power plants in many countries.

Climate change investment strategies

Clean energy think tank Bloomberg New Energy Finance has even raised its forecast for large-scale solar installations in the United States in light of Trump’s plans to invest $500 billion in AI infrastructure. They estimate that data centers built under this project will likely be powered by solar energy in the coming years because of a significant shortage of high-voltage transformers to connect new gas-fired power plants to the grid.

In the building sector, the push to save energy is expected to drive the retrofitting of less efficient heating and ventilation systems and the installation of insulation to limit heat loss, all with a relatively short payback period. According to Trane Technologies, a U.S. heating and ventilation manufacturer, retrofitting one of its buildings’ natural gas heating system with an advanced electric heating and cooling system in 2023 can reduce the facility’s overall energy use by 28%.

Global adoption of battery electric and hybrid vehicles is expected to double by 2030, despite a slight slowdown due to the planned elimination of tax credits in the United States, driven primarily by increasing cost parity. Lower production costs allow EV manufacturers to offer affordable models that bring the total cost of ownership, including fueling and maintenance, closer to that of gasoline or diesel cars.

Ultimately, there is also potential growth opportunities for decarbonization-focused holdings and climate change investment strategies, as global greenhouse gas reductions would need to be significantly accelerated to keep global warming on a low path. Also, climate investment strategies are better positioned to avoid the risks of potentially higher carbon taxes.

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(Featured image by geralt via Pixabay)

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First published in ESG NEWS. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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