What about climate tech now?

A couple of years ago, when climate tech investment dollars were flowing freely, I wrote up some advice for pivoting your career into climate tech. Clearly, the macro environment has changed significantly since then, both due to rising interest rates and to the major new political headwinds from the U.S. elections last week. 

For those who are relatively new to the sector or contemplating jumping in now, in addition to the considerations I laid out two years ago, here are some new factors to weigh.

• Climate tech is a very wide category. Some segments will face major hurdles in the U.S. from the new political trifecta in D.C., others may be relatively unaffected, and a few may be boosted. Check out CTVC’s early-take write up on the impact on various sectors. While you are evaluating which industries or solutions you are passionate about, and where you have relevant skills, it’s important to be clear-eyed about the likelihood of success depending on geography, policy and economics. Non-U.S. markets such as Europe, Canada and Australia may be better launching grounds for certain solutions.

• More than ever, the successful adoption of solutions will depend on the economics penciling out on their own, without depending on incentives, tax credits, or carbon credits. 

• States & local governments have a lot of authority over energy and climate policy in the U.S., and as during Trump 1.0, many states, counties and cities will step up and lead on climate action, both from a policy standpoint and with grant funding. Stay close to what is going on in your state capitals.

• It’s hard to predict the specifics this early on, but Trump is very likely to go through with threatened tariffs, which will significantly raise the costs of many materials, components and equipment needed for the energy transition and other climate initiatives. Low-cost energy is a bipartisan goal, so we will need to watch the battle between China trade hawks and anti-inflation champions to see what shakes out.

• There are a couple potential silver linings 

• Republicans have been far more supportive than Democrats of permitting reform, which is needed to reduce the delays and costs for new project development. 

• It’s possible private sector funding for climate tech will step into the void left by the disappearance of Federal agency grant dollars

To net it out, working in climate tech in the U.S. for the next few years is not for fair weather fans. For those who want to support climate action but for whom the risk of a career switch is too high, there are plenty of other ways to get engaged. For those who work in climate tech and make it through the next several years, the old adage holds: what doesn’t kill you makes you stronger.