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While Donald Trump’s presidency may have benefits in certain areas, it is not favorable for the environment. The new administration’s stance on green initiatives remains unclear, with potential cuts to subsidies for electric vehicles and other green investments. Howard Lutnick, the nominee for commerce secretary, has expressed skepticism towards climate change, further complicating the situation.
The US’s lag in green technology compared to China poses a significant challenge for the country’s global competitiveness. China’s dominance in the production and consumption of green tech, supported by state intervention, has left the US playing catch-up. Despite efforts to promote domestic production, the US risks isolation and higher costs in the green technology sector.
China’s stronghold on key green technologies like solar power has made it difficult for other countries to compete. The EU, for example, has struggled to protect its solar industry from Chinese competition. As China focuses more on exports, the global market is flooded with cheaper products, posing a threat to local manufacturers.
Amidst these challenges, some European countries are taking steps to bolster their green industries. The EU’s plan to incentivize Chinese battery companies to share technology with European counterparts demonstrates a shift towards protecting domestic interests. However, the lack of investment in green infrastructure in low and middle-income countries remains a concern.
Global bond yields and potential policy changes under the Trump administration could further impact green investment. The uncertainty surrounding import tariffs and tax cuts may deter renewable energy companies from investing, leading to a slowdown in the transition to green technology.
Despite these challenges, the transition to a greener economy remains a priority for many governments and companies. The availability of technology, cost considerations, and financing conditions will continue to shape the future of green investments worldwide.
alan.beattie@ft.com