Even if Trump has pledged to restore coal’s foregone position in the US energy market, market forces will make it almost impossible. Demand for coal is decreasing by the day while renewable energy and shale gas are gaining stronger market positions. In more and more states, natural gas is taking over from coal as the main power production source, while renewable energy capacity is also growing. With the shale gas revolution – made possible by new technology for hydraulic drilling – the access to huge domestic reserves of natural gas has changed the US energy market completely in just one decade. The abundant availability of cheap natural gas is expected to continue for decades, displacing coal as the preferred energy source for electricity production. As long as shale gas is abundant and prices remain low, it is highly likely that natural gas will continue outcompeting coal. Moreover, renewable energy technology is better and cheaper than ever, contributing to the displacement of coal. However, there will be less political and institutional support to accelerate this trend, and the transition to more renewable energy can become much slower with the new US administration.

Trump’s election promise to invest massively in infrastructure will also affect the energy market. For instance, new natural gas and oil pipelines will cement the position of natural gas in the energy sector for many decades to come. While Obama saw natural gas as a transitional energy source aimed at quickly reducing the use of coal, Trump’s infrastructure investments will prolong the lifetime of natural gas considerably and, in worst case, delay investments in renewable energy. On the bright side, in 2016, the Congress extended the federal tax breaks for renewable energy production until 2020, providing the sector with unprecedented stability and predictability. Both parties voted in favor of the tax breaks and these are expected to remain unchanged under the new administration.

Approximately 4000 new bureaucrats are entering federal agencies with a new policy agenda, and fresh agency leaders will steer policy implementation in line with Trump’s political priorities. The new Secretary of State Rex Tillerson, Energy Secretary Rick Perry, and Administrator of the Environmental Protection Agency (EPA) Scott Pruitt occupy three key cabinet posts that will be instrumental in setting the course of the US’s climate and energy policy for the coming years. All three are controversial picks, having expressed reservations towards accepting climate science and, in the case of Perry and Pruitt, with a history of skepticism towards the federal agencies they are going to lead. For instance, Pruitt was engaged in more than a dozen litigations against EPA aimed to reduce the agency’s regulatory power during his tenure as state attorney of Oklahoma.

Trump will likely slash the EPA’s budget significantly, and as a consequence strongly limit the agency’s capacity to implement existing policies to cut greenhouse gas emissions, reduce air pollution and monitor water quality. The Republican Party’s climate and energy platform is similar to Trump’s policy program, and holding a majority in both the Senate and House of Representatives, Republican lawmakers can use the budget process as a key instrument to steer climate and energy policies in the direction they prefer.

Climate and energy policy changes in Washington DC will also influence decisions taken at the state level. Many states have now put policy action on hold, awaiting final decisions regarding the Clean Power Plan and other energy policies at the federal level. Some states might reconsider their own reform plans for the energy sector if federal action dwindles. With the Clean Power Plan weakened or cancelled, there will be less political pressure on the states to implement green energy programs. In some states, like California, Oregon and Washington the green transition will likely continue regardless of what happens at the federal level. California has already implemented an ambitious climate policy with an economy wide cap-and-trade system, a low carbon fuel standard in the transport sector, and a renewable portfolio standard for the energy sector. Governors Jerry Brown, Jay Inslee and Katherine Brown have announced the resolve of California, Washington and Oregon to keep pushing for strong climate policies regardless of the Trump Administration’s actions.

The Trump administration’s climate policy actions will also have significant effects internationally. Should the US withdraw its participation in the Paris Agreement, the consequences will be severe for international climate cooperation. The United States is a crucial player in the Paris Agreement, not only because it is the world’s second largest emitter of GHGs but also because it has a special role to play in terms of triggering action from other countries. The Agreement relies inherently on vagueness in its specification of commitments, compliance requirements and the ratcheting-up mechanism. While this vagueness was necessary for forging the Agreement itself and attract broad participation in it, it also locks reliance on key countries into it as the agreement needs to unleash a snowball effect in order to be successful.

The US must play an important role in climate leadership for at least two reasons. As the largest economy in the world and the second largest carbon emitter, the US is often pointed to as a key actor because of its major historical responsibilities for the climate change problem. What happens with US climate policy will have an effect on the world. Second, in the history of international climate negotiations the US has often played the role as crucial laggard, blaming lack of participation by all major emitters and flawed treaty design for its own non-participation—for instance in the Kyoto Protocol. Experience indicates that for any comprehensive international climate agreement to work, it is vital that the world’s most powerful country shows interest in participation and compliance with its pledges. If a pivotal actor like the US should fail to implement its commitments, it will likely negatively affect other parties’ incentives to adopt and implement ambitious cuts in emissions.

There is little doubt that Trump, his administration and the Republican majority in Congress will try their best to reverse Obama’s signature climate policies. They will use institutional power and procedural strategies to set a new policy direction on climate and energy. Jointly, the White House and the Republican majority in the Congress have strong powers and can achieve many of their objectives.