How climate concern persists despite policy rollbacks

Global sustainability efforts will continue despite setbacks 🌎 Despite anticipated changes in U.S. federal climate policies, sustainability efforts continue to gain momentum through decentralized action, global leadership, and economic necessity. This resilience underscores a broader shift where local governments, international players, and financial markets collectively drive progress. Subnational governments in the U.S. have historically stepped up when federal support recedes. During the first Trump administration, initiatives like New York City’s Local Law 97 demonstrated the capacity of cities and states to lead on climate action. With recent recommitments from hundreds of mayors and an increase in Democratic governors, this trend is poised to continue, ensuring sustainability remains a priority. Globally, China is shaping the future of clean energy leadership. Significant investments in renewable energy capacity, both domestically and for export, are positioning China as a critical player in global sustainability. With two-thirds of the world’s new solar and wind energy projects underway, its efforts are setting new benchmarks for affordability and accessibility in clean technology, influencing international climate commitments. Financial markets are also adapting to the growing risks posed by climate change. The rising frequency and severity of extreme weather events are driving the need for businesses to align with sustainability principles. Investors are increasingly prioritizing environmental considerations, with data showing that climate-focused companies are gaining access to more favorable financial terms, including lending discounts and targeted investment strategies. The convergence of local action, international leadership, and market-driven incentives ensures that sustainability efforts will not only persist but evolve. These developments highlight the importance of staying aligned with global trends and preparing for a future where sustainability becomes a foundational element of economic and environmental resilience. Source: Harvard Business Review #sustainability #sustainable #business #esg #climatechange

Despite political uncertainty and the potential rollback of clean energy tax credits in the US, long-term investors remain bullish on renewables. The latest FT analysis highlights that, even as Trump’s “big, beautiful bill” raises concerns across the sector, the fundamentals driving clean energy growth are stronger than ever. Surging electricity demand—driven by AI data centres, onshoring of manufacturing, and the electrification of the economy—is creating a powerful tailwind for renewables. As the International Energy Agency notes, data centres alone could account for nearly half of US electricity demand growth by 2030. What’s striking is the resilience and confidence among major investors. Many are staying the course, betting on mature technologies like onshore wind, utility-scale solar, and battery storage, which are now cost-competitive with natural gas even without subsidies. Perhaps most importantly, the shift away from reliance on government incentives towards direct partnerships with Big Tech and other large energy buyers signals a maturing market. As one investor cut d in article put it, this administration is just a blip in a 30-year megatrend. The message is clear: the transition to clean energy in the US is not just policy-driven—it’s underpinned by robust demand, technological progress, and long-term investor confidence.

Why do global greenhouse gas emissions keep climbing when we’ve spent 30+ years talking (and even acting) on climate change? So, here's the problem. Many climate policies, including the Paris Agreement, assume that we can decouple energy consumption from economic growth, meaning that we can massively increase energy efficiency. Yet, we have never actually seen any absolute decoupling on a global basis. "Between 1971 and 2018, global GDP (in US$2010 constant prices) grew by an average of 3.1%/year while global primary and final energy consumption increased by an average of 2.0%/year and 1.8%/year, respectively". (Brockway et al., 2021) This is relative decoupling - not absolute decoupling! Yet, we need to see a massive absolute decoupling if we want to have any chance of staying within the Paris Agreement goals, meaning that global energy consumption needs to actually fall (if we want GDP to continue to grow). Well, that's not happening, and has never happened. Why is this? The authors of this paper have sifted through dozens of studies and found a pattern: when we make energy services cheaper by improving efficiency, we usually respond by using more of everything, directly and indirectly. Across the modelling papers they reviewed, the average rebound wipes out more than half of the energy we expected to save, and many cases show almost the whole gain disappearing. In plain language, every unit of energy we think we are saving is more like half a unit once the wider economy adjusts. Yet, our flagship climate policy models barely capture the rebound feedbacks. This review paper shows that most integrated assessment models represent only a fraction of the channels through which rebound works, so they may be under-reporting future energy demand and overselling the ease of absolute decoupling. That helps explain why, despite policy headlines and impressive efficiency ratios, global energy use still tracks GDP almost step for step. So, for me, the main take-home points are: - The rebound effect is massive. - Energy efficiency is not the get-out-of-jail-free-climate-action-card. - Absolute decoupling has never happened on a global basis, yet somehow most climate policies assume that it can. How? Why? When? - It's GDP growth we need to tackle! Greenhouse gas emissions track GDP growth. This is so clear. Big energy efficiency gains over the past few decades have NOT changed this pattern. We've got to tackle GDP growth, which, of course, would have huge justice dimensions to consider. #Degrowth #Climatecrisis #ClimateAction #ReboundEffect #NetZero #Sustainability #EnergyEfficiency #GHGEmissions #EnergyTransition #ClimatePolicy Full paper here: https://lnkd.in/esdnpXNH

Early stage climate investing impacts of Trump 2.0 through the lens of an LLM observing our teams post election investment committee discussions - 1. IRA Implementation Challenges reflect deep concerns about program execution rather than just policy changes. The team noted that even without formal rollbacks, administrative cuts or friction could effectively neutralize IRA benefits. They discussed how bureaucratic slowdown and uncertainty around decision-making could make programs practically inaccessible even while technically remaining in place. This led them to pass on at least one investment opportunity that was heavily dependent on smooth IRA implementation, demonstrating how these concerns are actively shaping investment decisions. 2. The Municipal/State Level discussion focused on the potential for local action to provide some stability amid federal uncertainty. The team explored how in the past some cities and states led on climate initiatives and could continue pushing climate initiatives forward regardless of federal stance. This created an interesting tension between seeing local government as a source of stability while recognizing its resource limitations. 3. Market Psychology emerged as a crucial factor in their analysis. The team explored how regulatory uncertainty affects behavior throughout the market - from individual bureaucrats becoming more risk-averse in approvals to customers hesitating on purchasing decisions. They highlighted how market participants' fear of potential changes can freeze activity even before any actual policy shifts occur. This psychological impact appears to act as a force multiplier for regulatory uncertainty, potentially affecting markets faster and more severely than formal policy changes. 4. Unsubsidized Business Models. The team is continuing to focus on finding companies that can succeed primarily on economics rather than regulatory support. They discussed adjusting valuations to account for increased regulatory risk and showed particular interest in business models that could maintain growth even in adverse political environments.

🌍 𝐖𝐡𝐲 𝐖𝐞’𝐫𝐞 𝐅𝐚𝐢𝐥𝐢𝐧𝐠 𝐨𝐧 𝐂𝐥𝐢𝐦𝐚𝐭𝐞 — 𝐀𝐧𝐝 𝐒𝐨𝐦𝐞 𝐎𝐩𝐭𝐢𝐨𝐧𝐬 𝐭𝐨 𝐅𝐢𝐱 𝐈𝐭 🔥 A new study in the American Economic Review ( 👉 https://lnkd.in/eNjb32py) reveals why so many climate policies still struggle to gain traction—even though the majority of people worldwide believe climate change is a serious threat. After surveying over 40,000 people across 20 countries, the authors found that public support for climate policies hinges on three things: ✅ Does the policy reduce emissions? ✅ Is it fair to low-income households? ✅ Will I personally lose or benefit? That’s it. It’s not that people don’t care — they do (also a finding in our Triodos Bank survey for the Netherlands 👉 https://lnkd.in/enEc3-gZ). However, support drops unless climate policies are effective, fair, and relevant to daily life. 💡 The researchers tested how information changes minds. And here’s the kicker: Explaining how climate policies work (and why they’re fair) shifted attitudes far more than fear-based messaging about climate impacts. 🚨 This couldn't come at a more urgent time. Allianz, one of the world’s largest insurers, just warned that the climate crisis is on track to destroy capitalism itself ( 👉 https://lnkd.in/ecPpF4ed). Insurers are already pulling out of high-risk regions. But this research shows there’s hope — and a path forward. We need to: 🔵 Communicate better — focus on how policies work, not just why we need them. 🔵 Design for fairness — people back climate taxes when the revenues go to those who need it most. 🔵 Move beyond "pay to pollute" — bans and public investments often feel fairer to citizens than market-based tools alone. Right now, it can feel like no one in power truly cares. But that’s exactly why we need to have better policy designs ready for when the political winds shift. One thing is sure: climate policies will become unavoidable. We can’t negotiate our way out of rising temperatures, and we can’t delay wildfires, floods, or food insecurity with parliamentary debates or denial. The sooner we prepare bright, fair, and effective solutions, the better positioned we’ll be when reality forces action. Let’s not waste that window.

"US #LNG exporters stick with #methane measures despite EPA rollbacks" This positive news for the #climate is a good example of many of the forces that blunt the impact of any sudden change in one country's #energy policy. What policies matter for #decisionmaking, in this case in the US #oil and #gas industry? Sure, current policies matter, but so do past policies, the policies of other countries, and expectations about future policies. Energy projects take a long time to plan and deploy, then can operate for many years, especially when companies make large investments in physical energy #infrastructure. These projects, as well as the broader business strategies that led to them, have substantial inertia. Companies that sell products in global energy #markets must incorporate the policies of importing countries - such as the EU, Japan, and South Korea for LNG - into their decision making. Since energy project timelines are often far longer than any one government administration, companies have to plan for the potential policies they could face in the future (and their probabilities). While these sources of inertia can help legacy energy #systems remain locked-in, once the #energytransition picks up steam, these same positive reinforcement mechanisms make it difficult to suddenly halt. And that is a very good thing. (Related note: There is terrific work on methane emissions from oil and gas supply chains taking place in the Cockrell School of Engineering, The University of Texas at Austin, much of it led by Arvind Ravikumar.) https://lnkd.in/gz9EK9sJ

THE LONG GAME. I was recently interviewed for a Reuters Events article looking at why sustainability remains a strategic imperative for businesses despite political shifts. While some companies may be reconsidering certain aspects of their approach, this doesn't indicate a full retreat from all sustainability commitments. "I haven't seen wholesale abandonment... Rather, companies are focusing their efforts on the things they can actually affect." The business case for sustainability remains compelling — from operational efficiency and cost savings to maintaining competitive advantage and meeting customer expectations. Smart companies understand that sustainability is integral to long-term success, regardless of short-term political headwinds. In these uncertain times, it's worth taking a step back to look at the big picture. Climate change and other sustainability challenges require long-term commitment. "Smart companies dedicated to long-term thinking will not swing wildly—they stay the course." Article is free at the link in the comments. #Sustainability #BusinessStrategy #ESG #ClimateAction #LeadershipInsights