Trump victory ‘won’t be bad’ for climate tech despite his vow to end the ‘green new scam’

He’s vowed to stop the ‘green new scam’ but with so many carrots to incentivise climate tech, a Trump victory could still be environmentally friendly.

Mr Trump has vowed to redirect “trillions of dollars” of US taxpayer funds that have been earmarked for low-carbon energy projects under the Inflation Reduction Act (IRA) away from the scheme.

A victorious Donald Trump in the US presidential race would not cruel climate tech investment despite the outspoken billionaire branding the Biden administration’s efforts to slash carbon emissions as the “green new scam”, venture capitalists say.

Mr Trump has vowed to redirect “trillions of dollars” of US taxpayer funds that have been earmarked for low-carbon energy projects under the Inflation Reduction Act (IRA) away from the scheme.

We will redirect that money for important projects like roads, bridges, dams, and we will not allow it to be spent on meaningless green, new scam ideas,” Mr Trump told supporters earlier this year.

He particularly took aim at the Biden administration’s new emissions standard that could effectively require more than half of US car sales to be electric by 2032.

“I will end the EV mandate on day one, thereby saving the US auto industry from complete obliteration, which is happening right now, saving US customers thousands and thousands of dollars per car.”

Donald Trump is vowing to create more jobs in the US.

But the potential conundrum the presidential hopeful faces is that the IRA has created more than 330,000 jobs since it was introduced in 2022. And Tom Kline and Patrick Sieb – co-heads of climate tech at Investible – say many of these jobs are in Republican ‘red’ states.

“It’s a carrot,” Mr Kline says. “And it’s always hard to remove a carrot.”

Mr Kline and Mr Sieb said in a joint interview that energy Independence and US jobs are key pillars of Trump’s plan, and both rely heavily on climate tech.

Donald Trump says ‘I will end the EV mandate on day one’.

But even if Mr Trump – who counts Tesla’s Elon Musk as one of his biggest backers – ploughs ahead with his plan on ridding Washington of the “green new scam”, they said climate investment flourished instead of withering when Trump was last president.

From 2016 to 2019, global climate tech venture capital investment almost tripled from $US6.6bn ($9.95bn) to $16.3bn, according to PwC.

Investible co-head of climate tech Tom Kline.

“We’re seeing lots of articles and rhetoric around ‘oh, it’s going to be terrible if Trump gets in’ like ‘it’s not going to be a great outcome for the world’. But a lot of policies that are in place, they will still remain and he can’t easily unwind a bunch of them,” Mr Kline said.

“But then also, I think looking at what happened last time he was in power is a really good anecdote of what might happen again.

“Fundamentally, the listed space in climate did really well, then the states really stepped up, individual companies did a lot.”

That’s not to say Trump won’t take action, with EV subsidies particularly vulnerable.

“There are some things that are from an executive order he could just do if he comes into office. But there are other elements, like the production tax credits for renewables and the solar tax credits that you need actually support to go through both houses,” Mr Kline said.

“And previously, when Trump was in, a bunch of those tax credits existed and weren’t unwound. So again, we don’t expect to see that those will be unwound, and it’s really not easy for him to do.”

Climate tech has emerged as one of the hottest areas to invest. Titanium Ventures, formerly Telstra Ventures, raised $500m in 2022 to launch fund, with managing director Matthew Koertge saying at the time he was interested in looking at getting a toehold in the market before it booms.

Big businesses have also stepped up green investments, with Amazon launching its $US2bn Climate Pledge Fund to invest in companies to help achieve its goal of achieving zero carbon emissions by 2040.

Apple plans to be carbon neutral by 2030 and Uber aims to be a fully electric, zero-emission platform by 2030 in Canada, Europe and the US, and by 2040.

Overall, companies have announced $US900bn in clean energy and manufacturing investments in the US, including more than $US265bn in clean energy investments since the Inflation Reduction Act was signed into law.

Wind and solar energy has become cost competitive with fossil fuels, Investible says.

Investible is looking to raise $80m over two rounds, with the first set to close by the end of this year or early 2025, and has attracted interest from family offices, institutional investors and corporates.

“Corporates are leaning in an taking action, irrespective of the policies. Fortescue is a really good example. They’re trying not just for net zero but absolute zero and not just making announcements but spending real dollar. Just recently they announced 100 autonomous battery-powered mining trucks as part of a wider $2.8bn deal to get zero emission in its mining fleet.

“Corporates are saying that ‘we need to showing progress against our decarbonisation targets – we want to be not just investing but actually using that technology’, so that really one of the big shifts.

“And it’s not just about making them greener. It’s about making them more profitable, de-risking their business, de-risking their supply chains.”

But Mr Sieb said there is still a role for governments to play in helping reduce emissions.

“There has to be a combination of the two,” he said. “Obviously the big tech companies, particularly that are based in California where there is that combination of policies and the sort of carrot through the IRA are in a really good position.

“I think having policies can help create more that momentum.”

The Biden administration’s new emissions standard that could effectively require more than half of US car sales to be electric by 2032.

And it’s not just about creating more subsidies. Mr Kline and Mr Sieb said renewable energy technologies like solar and wind have reached cost-competitiveness with fossil fuels, with their continued deployment driven by market dynamics, making them resilient to policy changes.

“In Australia, it wasn’t that long ago that there was no possibility that renewables could ever produce 50 per cent of their power. But in Australia last week, there were over 75 per cent renewables over a five minute increment, so we’re definitely heading there,” Mr Kline said.

“Like the US, the states in Australia are doing the same thing, they will continue to drive policies, irrespective of what’s happening at a federal level.”