US Sustainability Industry Seeking New Direction Under Trump Administration

The sustainability story of the first year of the Trump administration has been the substantial reduction of agency personnel and federal funding. This shift has forced the industry to open its mind to new pathways to sustainability solutions, without the presence of agency support or federal funding sources. The industry is taking on a new shape as its capital and human talent migrates from public institutions to corporate efforts.

Above the market dynamics at play, a key theory of sustainability is changing as well. The focus on minimizing consumption and equalizing the pace of global development is being enveloped by an abundance mindset - the view that caution and restraint is inferior to pure technological advancement and economic growth. For hyperscaler technologists and Democrats like Ezra Klein alike, material abundance and additions to the library of human knowledge possess the key to solving complex societal issues. It is the idea that economic prosperity is the pathway to solving sustainability issues.

The sustainability industry in the US should anticipate that corporate sustainability, energy transition projects, and decarbonization will have a more direct focus on pure economic and technical aspects, as well as corporate value creation. Tertiary economic adjustments for grants, subsidies, tax and the like are being removed, reducing the complexity of risk-adjusted decision-making. A spillover effect of the simpler economic calculation, is that evaluations can be conducted by a larger number of parties, raising interest in projects, ultimately increasing the total value of final investment decisions.

A reduction in federal spending for decarbonization projects will prompt developers to turn their pitch to private investors, which are better positioned to make profitable decisions, compared to elected officials and legacy federal agencies. Regarding human capital, the reduction of the federal workforce by tens of thousands, many of whom are highly qualified sustainability professionals, will create a wave of talent into private industry.

Overall, there is a major sea change in the US sustainability industry due to a change in federal attitude and support towards sustainability and decarbonization efforts, which is changing the allocation distribution of human and investment capital.