A second Trump administration is unlikely to completely dismantle the Inflation Reduction Act (IRA), especially given the investments and job growth it has spurred in Republican states. However, we might see a partial repeal, a rebranding, or a gradual phase-out of tax credits by the end of the decade. Clean energy technologies could face challenges from potential increases in tariffs on Chinese imports, which would disrupt supply chains and contribute to inflation. Additionally, the EPA may ease regulations on truck emissions, power plant greenhouse gas standards, and waste emissions, indicating a shift toward greater support for fossil fuels. Investors who prioritize sustainability should be aware of possible state-level restrictions on ESG considerations, the absence of federal ESG disclosure requirements, and legal hurdles regarding ESG integration in fiduciary responsibilities. Nonetheless, state initiatives, like California's decarbonization goals, could help counterbalance any federal changes.
