President-elect Donald Trump made no secret during his campaigning that he doesn't think the U.S. should take an aggressive stance on climate change. From leading chants of "drill, baby, drill" to frequently criticizing everything from wind turbines to electric vehicles, he appears poised to cast a shadow over the climate tech sector for the next four years. But will he really have such a detrimental impact?

Uncertainty Looms as Trump's Climate Tech Policies Take Shape

Trump's Campaign Stances and Their Implications

During his campaign, Trump's positions on climate change and related technologies were clearly evident. His calls for "drill, baby, drill" and criticism of renewable energy sources like wind turbines and electric vehicles seemed to suggest a less-than-supportive attitude towards the climate tech sector. This has led many to worry about the future of these industries.However, as with many of his positions, it's difficult to pinpoint his exact stance. Some of his proposed policies might actually have both positive and negative effects on climate tech. For example, deregulation and increased oil and gas production could potentially lead to more natural gas and oil, which in turn could benefit geothermal and geologic hydrogen technologies.

Investor Optimism Amidst Uncertainty

Despite the concerns, some climate tech investors remain cautiously optimistic. Leonardo Banchik, investment director at Voyager Ventures, believes that policy changes being considered by the second Trump administration won't be universally detrimental to climate tech. He points out that a lot of the climate tech wave started during the Trump administration and that these technologies will continue to come down the cost curve regardless of which administration is in power.Sophie Bakalar, a partner at Collab Fund, also shares this optimism. She believes that this second Trump administration could inspire more entrepreneurs to start building in the sector. She emphasizes that climate change is a long-term trend and that these technologies will continue to be important regardless of short-term political changes.

Lessons from the Clean Tech Cycle

Investors' optimism also stems from lessons learned from the clean tech cycle that went bust over a decade ago. Many companies grew too quickly during that time, building massive factories and supply chains before demand had fully materialized. They also became overly dependent on government subsidies.Today, investors are more cautious and are only investing in companies that provide a concrete value to their customers and are independent from climate-related factors. This approach helps to ensure the long-term viability of these companies.

Companies at Risk and Those That Could Benefit

While some companies will face challenges, there are also sectors that could get a boost. Anything involving drilling, such as geothermal and geologic hydrogen, is likely to benefit from policies favorable to oil and gas extraction. Grid-related startups could also benefit from proposed permitting overhauls.Companies that generate power, such as those in the nuclear and geothermal sectors, are likely to gain as well. Surging AI investments have put a strain on electric utilities and independent power producers, creating opportunities for these companies to provide much-needed power.

The Role of the Energy Secretary

Chris Wright, who Trump has tapped to be his energy secretary, could play a significant role. He is on the board at Oklo, an SMR startup, and his company has invested in Fervo. This suggests that he may have a more nuanced view of climate tech and could potentially support certain sectors.However, it remains to be seen how his influence will play out and what impact it will have on the climate tech sector.In conclusion, investors and their portfolio companies will have to wait and see how the new administration's policies actually affect the climate tech sector. The only constant in the next four years is likely to be change and instability.