Climate insights for sustainability teams in light of the US election

With the results of the 2024 election now in, stakeholders concerned with climate action are assessing the path forward. While many uncertainties remain, here are five key insights on climate policy and what may unfold over the coming years.

Five post-election climate insights 

1. US federal climate action will slow

The election outcome signals a likely shift in the US climate policy landscape, including prioritization of fossil fuel production and potential reduction of federal support for clean energy initiatives. These policy positions align with those of the first Trump administration, where many climate policies were either stalled or rolled back. During the second Trump term, we might see:

• Rollbacks of federal regulations from the Biden Administration, including emissions disclosure requirements from the SEC for publicly traded companies and procurement guidelines for federal contractors from the Federal Acquisition Regulatory Council (FAR Council). 

• Changes to Environmental Protection Agency (EPA) rules limiting emissions from vehicles and coal-fired power plants.

• Renewed focus on fossil fuel development, including expanded drilling on federal lands and waters and more lenient methane regulations, which could significantly increase US emissions.

• De-emphasis on financing for clean energy projects by the Department of Energy’s Loan Programs Office.

• Reduced focus on environmental justice efforts, including the Justice40 initiative.

While the future of the Inflation Reduction Act (IRA) and the Bipartisan Infrastructure Law (BIL) is uncertain, a full repeal of the IRA by Congress is considered unlikely. There may be revisions to specific guidance or changes to key programs, but elements like IRA tax credits for hydrogen production and carbon sequestration have bipartisan support and are likely to stay in place, albeit with possible edits.

2. New federal leaders will drive policy

Many key positions within the federal government’s climate efforts will see new appointments among the thousands of political roles across federal agencies. These individuals will shape the direction of the US climate response and energy transition, including overseeing the implementation of programs like the IRA and BIL. Personnel shape policy, and these appointments will dictate how climate initiatives move forward. 

On November 12, President-elect Trump announced his intention to appoint Lee Zeldin, a former Republican Congressman from Long Island, as the head of the EPA. Zeldin has expressed plans to “restore US energy dominance” and “revitalize our auto industry to bring back American jobs.” This announcement signals a shift towards deregulatory policies and a more deferential stance toward the fossil fuel industry.

3. The US will step back from global climate cooperation

President-elect Trump has expressed intent to exit the Paris Agreement once again, potentially reducing US influence in global climate negotiations and giving other countries, particularly China, an advantage in the growing clean energy economy. 

There are also reports about a possible withdrawal from the United Nations Framework Convention on Climate Change (UNFCCC), the founding treaty that underpins the Paris Agreement and the broader UN climate talks. The UNFCCC was ratified by the Senate in 1992, requiring a two-thirds majority. However, constitutional debates persist over whether a President can unilaterally exit a ratified treaty without Senate approval, adding uncertainty to the future of US participation in the UNFCCC.

4. Some states will step up, building on their momentum 

Climate action at the state level remains strong. The 2024 election showed that public support for climate and environmental initiatives is high:

• Washington state voters rejected a proposed repeal of their cap-and-invest program, Initiative 2117.

• California voters passed Proposition 4—a $10 billion bond measure to fund water, clean energy, and environmental projects.

• Minnesota voters approved a constitutional amendment that ensures at least 40 percent of state lottery revenue will support environmental and natural resource projects. 

During the 2023-2024 legislative session, New York lawmakers passed a number of climate-forward initiatives, including a bill establishing a clean energy outreach and community planning program. Additionally, California continues to set stringent emission disclosure standards for corporations, pushing for greater transparency and accountability at the state level. States are known as the laboratories of democracy; the laws and regulations coming out of these states both catalyze action in the near-term and serve as inspiration for future federal policy action.

5. The private sector must continue to lead

Carbon Direct believes the private sector will continue to play an essential, leading role in climate mitigation. Climate-related investments remain popular, cutting across party lines and finding support in both blue and red districts. For example, nearly 60 percent of the over 330 clean energy and clean vehicle projects announced since the IRA’s passage are based in Republican-held districts, with 19 of the top 20 districts represented by Republicans. This trend highlights the bipartisan appeal of climate investments, which create new jobs, re-open factories, and revitalize local communities and economies.

Corporate climate strategies, driven by long-term global trends and stakeholder expectations, are also likely to persist. Clean energy is now cost-competitive with coal in many regions, and international markets, including the EU and Japan, are setting stringent emissions standards and advancing climate goals. Savvy corporate leaders will recognize the need to plan with these global forces in mind, focusing on long-term sustainability and market competitiveness.

Conclusion

Corporate climate leadership is essential in building resilience and driving meaningful change amid policy shifts. Companies with robust climate strategies are better positioned to navigate future policy changes and capitalize on new opportunities in a clean energy economy.

To stay informed on reporting standards and climate risk disclosures relevant to your business, explore our Climate Policy Navigator.