Donald Trump’s green new deal

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Donald Trump doesn’t like renewable energy. He has cut tax credits and regulations that favour green investments, claimed offshore wind farms make whales go “a little bit loco” and pulled the US out of the Paris climate agreement (again). And yet, since his return to the White House in January 2025, the president’s actions have inadvertently raised the long-term appeal of green energy around the world.

Consider the Iran war. It has disrupted oil and gas flows through the Strait of Hormuz, pushed up fossil fuel prices and reiterated the risk of relying on imported supplies of traditional fuels.

Consumers are responding to the jump in petrol and domestic gas prices. In March, Europe recorded its strongest month for electric vehicle sales on record, according to data from Benchmark Mineral Intelligence. Solar installations in the UK also hit their highest level since 2012.

Policymakers are reacting, too. For instance, South Korea — which imports about 70 per cent of its crude oil from the Middle East — has committed to an expedited expansion of renewable energy. In Colombia late last month, more than 50 nations accounting for about one-fifth of global fossil fuel production and one-third of consumption made rare progress in developing actionable, time-bound plans to shift away from fossil fuels, rather than simply debating whether to do so.

Reflecting a bet that the conflict would drive a global push for energy autonomy and sovereignty, investors also piled into clean energy funds at the fastest pace in five years in April.

In the US, search traffic for EVs jumped by 20 per cent in the first week of the conflict. Analysts estimate that gas at $4 per gallon marks a tipping point, after which car shoppers will go electric en masse. US pump prices are hovering well above this level, and have risen the most among G7 countries since the start of the war.

Amid rising cost-of-living concerns, late last month US Republicans introduced the American Energy Dominance Act, a bill which aims to reverse the termination of several Biden-era clean energy tax incentives as outlined in Trump’s One Big Beautiful Bill Act.

But beyond the war, the US renewables rollout has been more resilient to Trump’s anti-green policies than many first thought. Last year, American utilities generated a record amount of electricity from green sources. That momentum has continued. Fully 93 per cent of US electricity capacity set to be added in 2026 is expected to come from solar, wind and batteries. And in March, for the first time the US generated more of its electricity from renewable energy, such as solar and wind, than it did via gas.

There are several reasons for this. First, even without subsidies, technological advances in solar cells, wind turbines and batteries mean renewables remain the “most cost-competitive form of generation” in the US, according to analysis by Lazard. Green energy infrastructure, such as utility-scale solar projects, can also be built faster than gas plants. (There has been an acceleration of capital expenditure ahead of the OBBBA’s deadlines for green tax credits, while some clean investment incentives survived the legislation.)

At the same time, the AI boom, which the Trump administration has stoked through investment deals and deregulation, has led to a surge in demand for power of all forms. Data centres are projected to consume up to 12 per cent of total US electricity by 2028.

“The data centre build-out has pushed up the cost of constructing natural gas plants. This has made the relative case for lower-cost and faster-to-deploy green technologies even more appealing,” says Jigar Shah, a solar-energy entrepreneur who oversaw the Biden administration’s green energy loan programme.

The removal of subsidies has also forced renewable tech manufacturers on to a more “cost-efficient trajectory” than otherwise, Shah adds.

In the absence of the White House’s tariffs and reversal of Biden-era climate measures, it is probable that the renewables rollout would have advanced even more quickly in America. But with AI companies putting up power-hungry data centres at unrelenting speed and Americans increasingly strained by costs, the US president could yet be forced into unwinding some of those restrictions.

Either way, Trump’s capricious approach to foreign policy and trade has provided a fillip to the global energy transition. For years, the shift to greener sources has been overly reliant on subsidies and moralising over climate change. Now, policymakers and energy consumers see it more as a matter of cost, security and abundance. That could make it far more enduring.

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Free Lunch on Sunday is edited by Harvey Nriapia