Former President Donald Trump’s tenure has been marked by significant shifts in U.S. climate policy and a retreat from global climate initiatives. After his election for a second term in November, Christiana Figueres, ex-UN climate chief, noted the election represents a severe setback for global climate action. Trump notably withdrew the United States from the Paris Climate Agreement, eliminated previous electric vehicle targets, and obstructed U.S. scientists from engaging in international climate research. Furthermore, he derided his predecessor’s environmental plans as a “green new scam.”
Despite these past actions, Trump has pivoted towards solidifying U.S. interests in acquiring critical minerals, vital for sectors like aerospace, defense, and notably, green technology. His administration has been advocating on a new front—establishing agreements with Ukraine and drawing attention to mineral-rich nations like Greenland and Canada.
Critical minerals such as lithium, graphite, and nickel are increasingly important, as demand surges within the clean energy sector and electric vehicle markets. Recent data reveals a staggering 30% rise in lithium demand within 2023, underscoring the urgency to secure these resources amidst growing reliance on renewable technologies. The International Energy Agency projects that by 2040, lithium and cobalt will comprise nearly 90% and 70% of demand respectively, spurred predominantly by advancements in electric vehicle technologies. Elon Musk, CEO of Tesla and SpaceX, has previously lamented skyrocketing lithium prices, considering entering mining and refining directly due to a constricted supply chain.
Amid rising geopolitical tensions and economic competition, the U.S. has been criticized for its weakened position regarding control over these minerals. A recent U.S. Government Select Committee report indicated a troubling dependence on China, particularly in processing rare earths. China currently dominates the global market, producing 60% of rare earths and processing nearly 90%, due to its strategic investments in these minerals over the past decade.
In response, experts suggest that Trump’s renewed focus on critical minerals may bolster U.S. capabilities in green technology, coinciding with the Biden administration’s supportive stance towards the green industry through policies like the Inflation Reduction Act (IRA). While the IRA has spurred considerable investment into U.S. green technology sectors—an estimated $493 billion by August 2024—critics highlight a lack of focus on securing upstream critical mineral supply chains. Nonetheless, Trump’s recent maneuvers suggest a potential redirection in policy that may prioritize the mining and procurement of these minerals to further the U.S. economic agenda.
Rumors of a forthcoming “Critical Minerals Executive Order” further imply strategic moves could be on the horizon. Such an order may streamline mining operations and expedite investment in processing facilities, though it raises questions on how quickly the administration can address the inherent complexities related to establishing these supply chains.
While Trump’s approach starkly contrasts with his predecessor’s advocacy for comprehensive climate policies, it raises a pivotal question: is the U.S. too late to stake its claim in a sector poised for boom? As the climate debate intensifies and competitiveness with China heightens, the balancing act between environmental responsibility and economic strategy remains at the forefront of U.S. policy discussions. Importantly, Trump’s initiatives now could create a ripple effect beneficial to green technology, should economic incentives align with climate goals.
Amidst all this, the willingness of investors to adapt and thrive in this uncertain landscape may hinge on how effectively Trump’s forthcoming policies can navigate the complexities of green technology development while addressing climate action imperatives.