Trump's Early Days Executive Orders
A review of their effects on green investments and the environmental movement.
Newly reelected President Trump has wasted no time, signing a variety of executive orders that are targeted at pursuing fossil fuel-friendly policies.
Does this mark the start of dark times for some green industries? Let’s review what has been released so far.
Leaving Paris Treaty
As promised, Trump has once again pulled the United States out of the Paris Agreement.
The process demands a year's notice before the USA can leave, so we’ll see that officially occur in 2026.
This profoundly impacts global efforts to fight climate change, but does it affect our investments? Not directly.
One of the commitments the USA made as a part of its international leadership on climate change, before Trump, was to donate billions to the Green Climate Fund (GCF). That sum of capital is set to help developing countries mitigate the effects of climate change.
Unless you’re investing in agricultural advisory services in Burundi, this doesn’t directly affect anything we would be buying in public markets.
What stings a little more is the sentimental impact this move has on the climate change narrative.
According to Nik Popli from Time Magazine, carbon emission mitigation efforts did begin to stall in the wake of Trump pulling out of the Paris Agreement last time:
Additionally, Trump’s withdrawal was seen as an open invitation for other nations to scale back their own climate commitments. While some countries, particularly in Europe, reaffirmed their commitments to the accord, the global momentum to cut emissions stalled in the face of U.S. retrenchment. According to the International Energy Agency, global energy-related CO2 emissions increased by 1.7% in 2018, the same year that the U.S. formally began the process of withdrawal, after three years of relatively steady declines.
Given that the United States is still seen as the global leader in many domains, it does strike a blow to any industry dependent on the climate change narrative or government policy.
This exact scenario is why I tend to avoid those situations and invest in economically viable businesses that can survive with or without government support:
With that said, the one industry I’m invested in that does rely on wider climate change efforts could be impacted here. The voluntary carbon markets (VCMs). Particularly the CORSIA emissions offsetting scheme for the aviation industry.
A TLDR summary is that the US pulling out of the PA will likely alienate any potential supply that could come from the US over double-counting fears. Also, it's unclear how much emissions US airlines would decide to offset since we probably won't see the US penalize any of the airlines for not meeting their commitments.
This could reduce demand depending on what the US airlines do. Base Carbon (BCBN) will likely be largely unaffected unless CORSIA collapses.
You can read more about the effects on the VCMs here.
Federal Lands Activities
There has been contention surrounding using federal lands in Alaska for potential O&G exploration.
Trump has signaled a reversal from Biden’s policy, seemingly opening up O&G drilling on federal lands and water.
In addition, all federal waters have been withdrawn from consideration for any offshore wind leasing. All wind leasing sales or permitting is paused.
According to UtilityDive:
Trump’s order cites “various alleged legal deficiencies underlying” the federal government’s leasing and permitting of wind projects, and concerns that the projects could lead to “negative impacts on navigational safety interests, transportation interests, national security interests, commercial interests, and marine mammals.”
This pause on wind activities is expected to continue for six months while the new administration reviews the actions of the previous government.
The implications of a Trump presidency are clear. Pro fossil fuels, con renewables.
Not that these actions are necessarily even beneficial to investors in fossil fuels. More supply is a negative via lower prices.
LNG Exports
Under the Biden administration, there was a temporary restriction on pending and future applications for LNG export projects.
This has effectively been reversed under Trump.
The president has directed the White House Council on Environmental Quality to coordinate on and expedite approvals for these projects.
More than a dozen potential LNG plants await approval in the Gulf of Mexico (America).
Electric Vehicle Mandate
Trump promised to end the “electric vehicle mandate,” and that he did.
He revoked a 2021 executive order from Biden that outlined a target to have half of all new vehicles sold in the USA to be electric by 2030 (this target wasn’t legally binding).
This also marked an end to any waiver granted by the EPA for states to mandate zero emission vehicle regulations by 2035 (California and 12 other states).
Additionally, he halted the distribution of any unspent funds allocated to a $5 billion fund for new EV charging stations.
And lastly, we are likely to see the end of the $7,500 consumer tax credit when purchasing an EV. One of the primary portions Trump wanted to cut from the Inflation Reduction Act.
Green Spending Paused
Inflation Reduction Act (IRA): ~$750 billion in total for spending, ~$370 billion going toward energy and climate change endeavors.
It’s difficult to find the spending figures for this bill, like most. Considering it was a 10-year plan, we can assume the majority of the funds are unallocated.
Bipartisan Infrastructure Law (BIL): Also known as the Infrastructure Investment and Jobs Act (IIJA), this law allocates $1.2 trillion to transportation and infrastructure projects, with $550 billion going toward new investments.
According to Brookings, roughly 34% of the funding from this bill was still unawarded back in November 2024.
Department of Energy (DOE): The DOE had a budget of around $50 billion, all operations at the department are essentially frozen while the new administration takes its time to assess the situation. Their loan programs office has approximately $41 billion in conditional commitments that have not yet been finalized.
Any unspent capital from these sources has essentially been frozen. It’s unclear how much of that funding will eventually get pulled via cost-cutting measures.
There are a variety of companies in the public markets that were going to receive funding from one of these bills or a government body.
In terms of names we follow, the main one affected is Zefiro Methane (ZEFI), which has been sitting on our watch list (no position) for this exact reason.
Both the valuation at the time and the uncertainty with these bills, thanks to the election, made me hold off on investing in ZEFI at the time. Still waiting for now.
The IRA and the BIL combined provided around $5 billion in funding for plugging orphaned O&G wells.
What will happen to that money? Who knows.
How much of it was already given to the states? Again, hard to say.
Zefiro is luckier since their business is still viable without that funding. O&G firms can hire them to plug wells… or Zefiro could issue carbon credits into the VCMs. So, I think they’ll be alright. This news could even present a buying opportunity.
Other firms aren’t so lucky.
In this video, I reviewed some of the changes Trump would make on climate policy, especially the IRA.
This will have significant ramifications for sectors that rely on government support, such as electric vehicles or hydrogen. That support can come in the form of tax credits, subsidies, grants, or other means.
There is a strong likelihood that much of that aid will get pulled back; it’s just a question of what. We’ll see what remains when the dust settles.
Beyond the executive orders, Trump will seek to curtail a wide range of environmental regulations. This might or might not impact a wide variety of industries I tend to cover in my content.
Tariffs will be another wild card that could impact our investments, depending on which countries end up on Trump’s naughty list.