So far, President Trump’s second term has reinforced his administration’s focus on fossil fuel expansion and regulatory rollbacks. With the U.S. stepping away from global climate cooperation, the divergence between federal policies and corporate sustainability commitments raises key questions about the future of the voluntary carbon market (VCM) and climate mitigation.
During Donald Trump’s first term, he impacted climate change through several actions. Notably, he withdrew the US from the Paris Agreement, impacting the nation’s nationally determined contributions (NDCs) and contributions to the Green Climate Fund. Trump also promoted the expansion of oil and gas production, and sought to appropriately suspend, revise, or rescind regulations that unduly burden the development of domestic energy resources
These actions were controversial and faced internal and international criticism for potentially aggravating climate change and environmental degradation.
Global energy transition trends have shown some promise, despite calls for decarbonizing quicker. China, the largest emitter of greenhouse gases (GHGs), has extensively developed wind and solar energy infrastructure both domestically and internationally. In addition, countries such as the United Kingdom (UK) are moving away from coal-based energy. Last year the UK closed its last coal-fired power station after 57 years of operation. Furthermore, Saudi Arabia, the world’s largest petroleum producer, has committed to generating up to 50% of its power from renewable sources by 2030. Similarly, countries within the European Union are moving away from coal and natural gas to solar energy, resulting in 11% of the EU's energy generation being solar, surpassing coal in 2024.
The path taken by the Trump administration so far has been the opposite.
Upon re-election, President Trump has unsurprisingly withdrawn the US from the Paris Agreement, echoing his actions in 2017. The U.S. president reaffirmed his commitment to promote oil extraction and the burning of fossil fuels for power generation.
Similarly, one of his first executive orders is called “Unleashing American Energy”. This order entails dismantling the Interagency Working Group on the Social Cost of Greenhouse Gases, and halting funding for clean energy projects established under the Inflation Reduction Act.
He also declared the country in an “energy emergency” to allow companies to produce more oil and gas and to allow the government to stop clean and renewable energy projects. Likewise, Trump established that agencies should not consider the social costs of CO2 emissions; he also committed to revoke the electric vehicle mandate, one of his first acts in office was to revoke Biden's 50% EV target.
As previously mentioned, the future of the United States under Donald Trump's administration concerning changes in environmental policy related to GHG emissions and the transition to clean and renewable energy is not yet settled. Other measures that Trump tried to implement was to declare a federal funding freeze, which caused concern among climate leaders and organizations.
On 27 January 2025, the White House Office of Management and Budget (OMB) issued a memo explaining that “the use of federal resources to advance Marxist equity, transgenderism, and green new deal social engineering policies is a waste of taxpayer dollars.” In other words, federal resources intended for climate initiatives and programs would have been cut. Although the freeze has not been implemented for now, this will likely not be the Donald Trump's last attempt to restrict funding for renewable energy, climate pollution reduction, or the Women and Minorities in Science, Technology, Engineering, and Mathematics Fields Program.
Our analysis indicates that although federal policies under Trump’s second administration present obstacles, the VCM could remain resilient due to strong corporate commitments and subnational initiatives. During Trump’s first term, substantial state and local collaboration played a key role in maintaining climate progress, a trend likely to persist. Businesses are expected to take an even greater role in climate mitigation efforts, independent of federal actions. Moreover, the demand for high-quality carbon credits may continue or increase, driven by corporate sustainability objectives and investor pressures, particularly for multinational companies operating under diverse regulatory frameworks.
For a more in-depth understanding of the potential impacts of Trump’s second term administration on the VCM, please refer to our analysis published on 13 November 2024.