The U.S. Federal Retreat. The State Surge. The Global Race.

When federal leadership retreats, markets don’t stop, they re-route.

The United States Federal Administration has once again made climate a political dividing line. The White House froze offshore wind leasing, paused national EV programs, and cut the science that underwrites climate risk.

At the UN, the President called climate action a “con job.” That speech was meant for applause, not for markets.

Because markets kept building.

Across the U.S., states and cities filled the vacuum. Governors, utilities, mayors, and corporate buyers pushed forward. Capital is still flowing into the six sectors that define the carbon balance sheet: energy, industry, transportation, waste, buildings, and agriculture.

Energy, Power & Storage

Texas is adding record solar and battery capacity because it is cheap. California extended cap and trade through 2045. New York re-tendered offshore wind to protect ratepayers while staying on track for 70 percent renewables by 2030.

In Canada, Alberta’s solar growth is outpacing expectations. Ontario is moving on small modular reactors. 

Energy transitions never move evenly, but they do move.

Industry & Industrial Processes

While Washington slows, state and private incentives are accelerating decarbonization.

Steelmakers in Sweden, cement producers in Canada, and hydrogen clusters in Texas and the UAE are redrawing the industrial map. The IRA catalyzed a manufacturing race now spanning Ohio, Quebec, and Bavaria. 

The facilities being built today are not subsidies. They are policy-proof infrastructure.

Transportation & Mobility

Federal EV programs may have paused, but global electrification did not.

China sold more EVs in the first half of this year than the U.S. sold cars. Europe’s fleet standards are forcing supply chain rewiring. Canada’s Clean Fuel Regulations are scaling biofuels, while cities from Chicago to Dubai are electrifying last-mile delivery.

Mobility has gone global.

Buildings & The Built Environment

Heat pumps outsold gas furnaces in the U.S. again this year.

The EU’s energy performance directive is driving mass retrofits. In Canada, provinces are embedding electrification incentives into codes. Smart-building analytics and HVAC sensors are being adopted because they pay for themselves.

Energy efficiency is no longer a green premium. It is an operating margin.

Waste, Recycling & Plastics

Waste policy rarely makes headlines, but it shapes profits.

Europe’s circular economy framework is creating export demand for North American waste-to-value technologies. Landfill gas capture and organics diversion are scaling in California, Quebec, and Germany. Methane-leak detection is reducing emissions of a potent GHG.

Data is turning waste avoidance into a measurable, tradeable product.

Agriculture, Food & Forestry

Soil carbon markets and regenerative practices are scaling globally.

In the U.S., cover crops are at record acreage. In the Middle East, investment in water-efficient agriculture and agri-solar is rising fast. Europe’s Farm to Fork strategy and Canada’s agricultural clean tech programs are aligning incentives from farm to retailer. Globally, the use of mycorrhizal products to drive yield and resilience while durably sequestering record-breaking volumes of atmospheric carbon is growing at an astounding pace.

Climate risk is now yield risk. Food systems are adapting accordingly.

The Global Context

The U.S. may be the world’s largest economy, but it is not the center of gravity for climate innovation.

Europe is codifying climate disclosure and border adjustments. China is subsidizing clean manufacturing and exporting decarbonization hardware. India is leap-frogging with renewables and electric two-wheelers. The Gulf states are investing in hydrogen, water recovery, and carbon utilization to hedge their export futures.

The EU is now partnering directly with U.S. states, Canadian provinces, and private companies. Subnational to subnational. Capital is routing around political noise.

A recent article by Henry Foy and Alice Hancock in the Financial Times captured this shift clearly. It is what compelled me to write this reflection.

Federal retreat is not global retreat. It is a reallocation of momentum.

What the data reveals

Every policy pullback creates a counter-trend.

When central governments hesitate, innovators decentralize.

Think of telecom in the 1990s. When regulation lagged, regional builders laid fiber. Value accrued to those who solved bottlenecks.

Today, the bottlenecks are physical: permitting, logistics, transmission, and measurement. The edge is in solving them.

Across every sector, the playbook is the same: measure better, build smarter, scale faster.

Investors who can read that tape across energy, industry, transport, waste, buildings, and agriculture will see the signal is not fading. It is fragmenting and reassembling at the subnational and corporate level.

That is where returns live.

Do not chase headlines. Buy the slope of durable policy. Back founders solving practical carbon problems with short paybacks and measurable outcomes. Own the bottlenecks that make systems run. The leaders are not waiting for permission. They are already building the technologies, infrastructure, and returns of the next economy.

This is the Climate Economy.

P.S. Thanks to ChatGPT for the help on this newsletter. I am finding it more and more useful for research and layout help...and to sharpen my writing.