As Donald Trump returns to the White House on Monday, January 20, 2025 for his second non-consecutive term as President of the United States, climate action is set to take a giant blow once again.
Trump, an avid climate-denier, has called climate change a scam, talked about increasing the US’s domestic oil and gas production, threatened to remove Biden-era climate laws and withdraw from multilateral climate platforms, including the Paris Agreement. The incoming US administration’s stance could not be more detached from the immediate necessity of climate action.
In light of what lies ahead, here are five key dimensions of climate action that will be impacted by the second Trump presidency:
1. Derailing US’s domestic green laws
During Trump’s first term, he rolled back over 100 environmental regulations enacted by the Obama administration. A repeat of the same is being expected this time around as well. Trump’s pick to head the Environmental Protection Agency (EPA), Lee Zedlin, has spoken about undoing environmental regulations to restore “US energy dominance”. Biden’s regulations opposing methane emissions and curbing coal leases on federal lands may also be targeted early into the Trump presidency.
Biden’s flagship Inflation Reduction Act (IRA)—a federal US law that has allocated $370 billion towards clean energy technologies—could end up in the crosshairs, as Zedlin looks to “claw back” the funds dispersed by the IRA. Budget cuts are expected in Electric Vehicles (EVs) tax subsidies with reduced support for offshore wind as well. However, despite Trump’s signalling to divert unspent funds from the IRA, this agenda may face resistance from Republican districts that are benefitting from the growth in green jobs.
2. Expansion of US fossil fuel production and export
During Trump’s first presidential term, the US became the largest producer of petroleum and natural gas in the world in 2018, setting a record of 11 million barrels per day. This trend has continued to this day. After Biden came to power in 2020, despite the administration’s pro-climate stance, US crude oil production reached a new record at 12.9 million barrels per day in 2023.
For his second term, Trump has proposed to ramp up fossil fuel production beyond current levels. He may even declare a national emergency for US energy, allowing him to fast track permits and energy projects. There are concerns that, soon after assuming office, Trump could direct federal agencies to remove the bans on offshore oil drilling, new LNG export licenses and drilling permits on federal land which were put in place by Biden.
Trump’s nominee for Secretary of the Department of Energy (DOE), Chris Wright, is a fossil fuel executive backing the expansion of domestic energy production. During his confirmation hearing, Wright spoke about balancing climate change with the need to secure growing energy requirements in the US. However, he has previously called climate change a “slow-moving” issue and terms like clean energy to be “very deceptive”, while backing the expansion of domestic fossil fuel drilling and nuclear energy in the US.
3. Tariff wars and the green economy
Throughout his campaign trail, Trump has pinpointed tariffs as a key policy tool for his upcoming presidency, speaking about imposing high tariffs on China, India and even US allies like Mexico and Canada.
The Biden administration was already engaged in policies to reshore clean energy supply chains and promote domestic production of clean technologies. If Trump moves ahead with implementing high tariffs on green goods as part of his protectionist trade policies, it could strengthen China’s dominance in green technology production and trade as a supplier to the rest of the world and also raise prices for the same in the US domestically.
4. Receding from global climate action
Trump made his disdain for multilateral climate action abundantly clear during his first term, exiting from the Paris Agreement in 2017. While the US rejoined the Agreement in 2020 after Biden came to power, Trump will most likely pull out once more after assuming office.
This has serious implications, as it means that, at least for the next four years, the US will potentially not be releasing official data on domestic emissions or following through on its climate commitments. The outgoing Biden administration recently announced the country’s new Nationally Determined Contribution (NDC) to cut down emissions by 61-66 per cent below 2005 levels by 2035. The NDC leaves scope for the private sector and sub-national actors to advance with climate action, with increased engagement from the federal government “later in this decade”—pointing towards the expected regression on climate action under Trump.
Moreover, climate finance to developing countries will also take a hit in the process of US withdrawal from the international arena. Under Biden, climate finance from the US to the developing world reached over $11 billion in 2024. Biden further committed almost $14 billion towards international development finance in his first two years, compared to $12 billion committed by the first Trump presidency. It remains to be seen how Trump will approach climate finance, but the likely outcome is he will cut back on such spending over the next four years.
5. Pushback on International Financial Architecture reform
In recent years, there have been growing calls for an overhaul of international financial institutions—primarily the World Bank and the International Monetary Fund (IMF)—that debilitate developing countries with debt (rendering countries unable to meet their development goals while responding to the climate crisis), impose conditionalities tied to financial support, and perpetuate fossil finance.
Their governance is heavily influenced by the US and it is nearly impossible to pursue a reform agenda within these institutions without US backing. Under Biden, there were important discussions held within the World Bank and IMF on debt restructuring, climate finance and reform of the global financial architecture. These discussions may now be at risk of getting derailed under Trump.
As the Republicans now control both the US House and Senate, any legislation aimed at International Financial Architecture (IFA) reforms may come up against a wall. For instance, increasing the capital base of the World Bank requires US Congressional approval, which may now prove even trickier than before.
Furthermore, the issuance of Special Drawing Rights (SDRs), which is an IMF-backed reserve asset allocated to central banks and multilateral development banks (MDBs), could become another point of contention. SDRs can be critical for climate finance as a non-debt creating mechanism to open up fiscal space for developing countries and multilateral development banks.
During the COVID-19 pandemic, the Biden administration supported the issuance of $650 billion SDR allocation to help countries deal with the economic impacts of the crisis. The response of the Trump administration towards future such allocations remains quite unclear.
Given the increasing intensity of extreme weather events across the globe, Trump’s return signals even greater risk to the developing world. As the world’s biggest historical emitter of greenhouse gases (GHGs) and the second-highest current emitter, it is vital that the American administration should speed ahead with just, equitable climate policies, dramatically reducing domestic emissions and providing adequate support to developing countries struggling to cope with the impacts of the ongoing climate collapse.
Instead, the US under a second Trump term is set to retard on its domestic climate action, reduce the availability of multilateral climate funds, and retreat from the international climate arena, while other emerging countries continue to forge ahead with their climate goals.