Donald Trump’s potential return to the White House is poised to reshape the landscape of climate tech investment, with significant implications for startups, investors, and global innovation. Trump’s platform includes curbing federal spending on green initiatives, such as rescinding unspent funds from the Inflation Reduction Act (IRA) and eliminating electric vehicle tax credits. While these moves may create challenges, private capital and international momentum are expected to keep the sector advancing.
Climate tech investors Janneke Niessen, Founding Partner at CapitalT, and Danijel Visevic, Co-founder at World Fund, weigh in on the future of the sector amid these uncertainties.
The Role of Private Capital
“If federal support for climate tech declines, private capital—particularly venture capital and private equity—will be crucial in filling the gap,” says Janneke Niessen. She highlights the essential role private investors play, especially in deep tech investments that require substantial funding in early stages when technology is still unproven.
Niessen encourages startups to focus on scalable solutions such as renewable energy, carbon capture, and resource efficiency technologies that demonstrate economic viability and environmental impact. “Startups that prioritize these aspects will be best positioned to attract investments,” she says.
She also sees an opportunity for countries that continue supporting climate tech. “Nations that invest now can gain a significant advantage, driving long-term competitiveness and leadership in the global market,” Niessen adds.
Corporations as Climate Champions
Corporate leadership will become increasingly critical as federal support wanes. Niessen explains that market forces, such as consumer demand for sustainable products and the decreasing costs of renewable energy, empower corporations to lead the charge.
“The transition to net-zero is increasingly being driven by these forces,” she notes. “This shift creates opportunities for startups to partner with corporations, scale impactful solutions, and accelerate the transition to a decarbonized future.”
The Global Context
Globally, momentum for renewable energy continues to grow. According to the International Energy Agency, investment in clean technology in 2024 is running at double the pace of coal, oil, and gas. Nations such as China, the EU, the UK, and Japan are ramping up their green initiatives.
“Europe is solidifying its position as a global climate tech leader,” says Niessen. She points to the ambitious targets of the European Green Deal and significant funding, such as Germany’s €8 billion climate and transformation fund. “European climate startups raised over €20 billion in 2023, and I expect this momentum to continue in sectors like carbon capture and green hydrogen,” she explains.
Strategies for Startups
Danijel Visevic agrees that private capital will be key but advises startups to build resilience by focusing on self-sufficiency. “Get to revenues as soon as possible,” he recommends. “Avoid dependence on subsidies. Build products that would prevail even without positive climate policy because they are cheaper, better, more convenient, and cleaner.”
Visevic remains optimistic about the ability of Europe to step up as U.S. federal support wanes. He highlights the Draghi report—a strategic proposal for Europe’s industrial decarbonization and cleantech innovation. “Europe must transform its early leadership into lasting competitiveness,” he says, citing the report’s call for €750-800 billion in annual investments.
Reasons for Optimism
Despite the challenges posed by Trump’s policies, both investors see reasons to be hopeful. Visevic emphasizes that climate tech often delivers superior products. “These are technologies that are not only better for the environment but also offer greater efficiency, beauty, and convenience. That’s a compelling proposition,” he says.
Niessen points to the private sector’s willingness to take bold actions, noting that “collaboration across all sectors can accelerate the transition and secure a sustainable future.”
Personal and Professional Resilience
In a time of geopolitical and economic instability, Visevic offers a reminder of the broader trend toward progress. “There will always be ups and downs, but the big trend is toward improvement,” he says, recommending resources like Our World in Data to help contextualize progress amid challenges.
“On a personal level, remember that people are social beings driven by the need to love and do good. This creates real, deep happiness,” Visevic adds.
Moving Forward
As Trump’s policies loom large, the climate tech sector must brace for potential disruptions while seizing opportunities for innovation and growth. With private capital stepping in, international collaboration expanding, and corporations embracing leadership roles, the industry appears poised to adapt and thrive.
“The challenges are real, but so are the opportunities,” Niessen concludes. “Now is the time for bold action to ensure a sustainable future.”
