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Climate and energy policies have swung significantly between one presidential administration and another. The difference between the Biden administration and the second Trump administration will be particularly dramatic—including major shifts in areas such as fossil fuel production, electric vehicle subsidies, and climate change mitigation. Joe Aldy, the Teresa and John Heinz Professor of the Practice of Environmental Policy, is an environmental economist and served as special assistant to the president for energy and the environment under President Obama. We spoke to him about energy production in the United States, the future of renewable power, the tension between federal and state policymakers, and the regulatory challenges faced by the current administration.

Q: What was the climate and energy landscape like on January 1st, 2025? What did the Trump administration inherit from the Biden administration?  

As President Trump was inaugurated on January 20th, he inherited really an unprecedented change in U.S. energy and our efforts to try to address climate change. We had seen U.S. production of crude oil and natural gas reach record highs. At the same time, we’ve seen dramatic growth in both the investment in renewable power and in the capacity to manufacture components that go into renewable energy plants. In 2024, the United States invested in more than 30 gigawatts of solar power, almost 3% of the capacity of the entire country. It was almost 50 times the investment we saw in new natural gas capacity. So, all the money in the power sector was going to solar. We saw a significant investment in wind power, about one-tenth of what it was for solar, but still about five times what we saw for natural gas. We also saw this growing capacity to manufacture solar panels. So, we’ve seen this dramatic growth in the energy system. We’ve seen increasing use of electricity, whether it’s to drive our electric vehicles or to electrify our homes for heating by using heat pumps as a substitute for heating oil or natural gas. So, in general, we’re seeing this continued growth in the energy system, but also a growth in the energy system that is more climate friendly and climate oriented.

It’s one reason why it was a bit of a surprise on January 20th that among the executive orders that President Trump signed was one declaring a national emergency with respect to energy and calling on agencies to try to find new ways to quickly invest in fossil fuel extraction and fossil fuel generation across the country. The argument there was that for economic reasons and national security reasons, we need more of this energy. But we really are producing more energy in the United States than we ever have before, and we’ve seen this kind of growth in the business sector and in that investment across all different kinds of energy, fossil fuels, especially oil and gas, but also renewable sources of power in the United States.

We’re really in a period of true abundance of energy in the United States, both in our production from hydrocarbons and in our production from renewable sources of energy.
 

Q: Where is the country in terms of addressing climate change?

We’ve seen emissions of greenhouse gases, especially greenhouse gases like carbon dioxide from the combustion of fossil fuels, decline significantly in the United States over the last several decades. Emissions today are more than 20% below what they were in 2005. That reflects a lot of investment in renewable power. It reflects a lot of switching from producing power from coal to producing power from natural gas, which, when burned, emits about half as much carbon dioxide as coal does to produce a unit of electricity. So, we’ve seen a lot of efforts reflecting a lot of long-lived investment in the U.S. economy that have driven down our emissions.  

And the importance about it being long-lived investment is that it doesn’t matter who’s president. Once you build a wind farm or a solar facility, most of the cost of generating power is the upfront investment—it’s acquiring the land, it’s putting the steel in the ground. Once built, your power is relatively cheap. It is going to be economic for the utilities and the companies that run these facilities to keep running them regardless of who is president of the United States. One thing that we learned in the first Trump administration is despite efforts to roll back Obama era efforts to advance climate policy, we didn’t see a big rebound. In fact, we didn’t see any rebound at all of greenhouse gas emissions in the United States, in part because of the durability of those private sector investments in low and zero carbon sources of energy.

Q: What has the Trump administration done so far?

In a flurry of executive orders signed on the first day of this administration, President Trump directed his agencies to undertake a number of efforts to try to advance his energy agenda. Some of these take time to implement. So, for example, calling on the Environmental Protection Agency to revisit some of the Biden-era regulations intended to reduce carbon dioxide emissions in the power sector or carbon dioxide emissions from the tailpipes of personal automobiles. Some of this calls on the federal agencies that manage our public lands to try to increase the amount of leasing of those public lands to oil and gas development. Some have actually called for basically a chilling effect, whether it’s to prevent further leasing or to prevent further permitting of federal lands for the use and development for wind power. So, there are a number of these things that have been put into motion through these executive orders, but the executive order in and of itself doesn’t make it happen.

The agencies that have authorities under these taskings from the president have to undertake their process through those taskings to then change what is the practice, what is the regulation, what is the policy of the U.S. government with respect to these various energy resources. Some of that takes time. So, for example, if the EPA comes forward with a different regulation for the emissions of carbon dioxide at power plants, the agency needs to go through the same type of process to undo those regulations or to write less ambitious regulations than the Biden administration did in proposing and finalizing those regulations. And the way our regulatory process works means they have to come forward with a proposal, take public comment, and then issue a final rule. They can’t just say, “Oh, we’ve changed our mind.” They have to build up the evidence and the record. This is what actually gets assessed and evaluated when this gets litigated in the courts, a record that justifies a change in regulatory policy from what had been issued in the Biden administration. So, some of that’s going to take time.  

We will continue to see the courts brought into play to see whether what this administration is doing is consistent with the laws that either govern, say the Inflation Reduction Act or administrative procedure and the way we manage the implementation of the government on behalf of the American people. So, we’ve seen a lot of goals established, a lot of tasks sent to the agencies. We’re now in this phase of those agencies trying to implement those taskings, and then we’re going to see those challenged more and more, I think, by those who oppose these policies through the court system.
 

Q: Some energy and climate issues will be addressed in legislation currently winding its way through Congress. Is there support for radical change there?

Probably the most significant legislative priority for the Trump administration is to work with the U.S. Congress on extending much of what was in the 2017 tax bill. So, there’s been some attention focused on whether getting rid of a lot of the spending planned under the Inflation Reduction Act could be a way to pay for at least part of these favored tax extensions that President Trump is eyeing. Now, the challenge is, politically, some people really like the Inflation Reduction Act, and some of these people actually have influence in the current Congress. So, a lot of businesses have benefited from the Inflation Reduction Act tax credits to make investments in new manufacturing facilities, to make investments in new ways of generating power, to really bring to the fore new business models that enable us to more quickly advance the deployment of clean energy that improves their bottom line as a business. They will lobby members of Congress.

Last year, we saw 18 members of the Republican caucus in the House of Representatives send a public letter to Speaker Johnson. They talked about the benefits to their districts, in terms of economic output, new manufacturing facilities, job creation, that come from the Inflation Reduction Act. It’s one reason why there’s been this discussion about whether this tax debate in 2025 will approach the Inflation Reduction Act with a sledgehammer and just get rid of it all or whether to approach it with a scalpel.
 

Q: Will there be tensions between federal and state policies on these issues?

One thing we learned from the first Trump administration is that as the federal government sort of slows down and even tries to move backwards on climate, a lot of states move forward. They try to fill in the gap. In fact, you may recall there was a campaign started in 2017 that engaged states and local governments and big companies called “We’re Still In,” saying we’re going to be in delivering on the goals established in the U.N. Paris Agreement of 2015 and saying, “We are going to be committed to continuing the efforts to reduce our emissions and decarbonize our economies.” But at the forefront of that was the State of California. It has an ambitious program to cut emissions in the state. It has what we call a cap-and-trade program governing almost all the carbon dioxide emissions in the state. So, that enables the cap as it goes down over time and gets tighter and tighter, reducing the emissions in the state, but does so in a market friendly way so that the businesses covered by that policy can seek out and find the most creative and low cost ways of reducing pollution in the state.
 

Q: What’s your biggest question mark on this issue, the one that kind keeps you up at night?

My big question mark, especially over the past month, and one that really gives me pause, is the fact that this administration wants to reduce the amount of information we have about climate change. We see discussion about various data sets disappearing from federal websites. We see discussions about cutting both the staff and the budgets at the National Oceanic and Atmospheric Administration and the National Weather Service. They’re the people who actually tell us what the weather is. That’s a reflection of climate change. They’re the ones that actually do the modeling of climate change. It’s that information that’s really important for what you and I do as individuals, or what business leaders do when they’re managing their companies, what we can do to reduce our exposure to climate change, what we can do to enhance our resilience to climate change.

Whether we cut emissions a lot this year or next won’t really matter much to how hot it’s going to be next year or how severe the storms will be in the Atlantic this year when we think about hurricane season. We need that information to be smarter so that when we do face a heat wave or more flooding, we’re actually better prepared for it. So, that’s the uncertainty right now that actually gives me pause. 

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Photograph by Chip Somodevilla/Getty Images.