Despite recent political shifts in the United States, global momentum toward a low‐carbon future remains robust. While policy changes, such as the rollback of international commitments and adjustments to domestic mandates, witnessed in the flurry of executive orders signed on January 20th, can create short‐term uncertainty, history shows that environmental policymaking tends to be cyclical. For example, after the U.S. exited the Paris Agreement in 2017, the country rejoined under President Biden in 2021—a reminder that political reversals rarely derail long‐term trends.
One key driver contributing to the longevity of the trend is the rapid evolution of technology. Innovations in renewable energy have led to significant cost reductions in energy derived from wind and solar power. The latter have in fact have reached grid parity in many regions, making them some of the most attractive and cost‐competitive sources of electricity globally. According to a recent PwC report in 2024, 21% of all funding raised in Europe went to companies related to sustainability, highlighting the increasing confidence in these solutions.
The energy landscape is also set for transformation. As emerging technologies—particularly artificial intelligence—drive a surge in electricity demand, the share of renewables in the global electricity mix is projected to climb to nearly half of supply by the end of 2026, up from just short of 40% in 2023. Even though overall venture capital investment in cleantech experienced a temporary dip over the past few years, certain subsectors are bucking the trend. For instance, climate startups raised $3.4 billion, or 4.8 % of all VC fundraising, in the first half of 2024, and deals focused on climate resilience now account for 28% of climate tech investments.
The resilience of sustainable technology is evident not only in innovation but also in capital flows. With some regions experiencing policy retrenchment, investors are increasingly looking to areas with stable and supportive environmental, social, and governance (ESG) frameworks. The European Union and the United Kingdom, for instance, have cultivated cross-party support for climate action, making them attractive markets for sustainable startups . Initiatives like the European Smart Specialization Platform on Energy are harnessing Cohesion Policy funding to drive sustainable energy projects across member states, while UK-based AI climate tech firms saw a 128% increase in investment - reaching £1.01 billion in 2024.
For environmental investors, the path forward involves a blend of strategic patience and geographic diversification. In a shifting policy environment, the most promising opportunities will come from companies with scalable, market-driven business models that can thrive without heavy reliance on government incentives. By identifying ventures that are competitive on their own merits—and by spreading investments across regions with clear, long-term commitments to sustainability—investors can continue to drive the transition to a greener future.
While political shifts may introduce temporary headwinds, they do not undermine the structural forces propelling climate innovation. Technological advancements, economic competitiveness, and a growing public commitment to sustainability together lay a robust foundation for a resilient low-carbon economy. For those willing to adapt and look beyond short-term policy fluctuations, the future of environmental stewardship remains bright.
Daniele Viappiani is a venture capital investor and a former civil servant with over a decade of experience in technology, climate change, artificial intelligence, entrepreneurship, and the future of work. At GC1 Ventures, Daniele manages a portfolio of top-tier venture capital funds and innovative early-stage startups.
