President-elect Donald Trump has the merit of identifying and supporting the workers and families most hurt by globalization, who also lost jobs to robots, experienced stagnant wages, and faced increased costs of health care and college education. In fact, many remained with only a high school education. The Democrats lost the election in no small measure because they neglected and alienated this class. Hopefully, the working class may benefit from President Trump's second term. He will have to enact policies of lighter taxes and lower health and education costs for workers. Their wages should increase.

Instead, a mixed picture emerges regarding climate change. On one hand, most Republicans are no longer deniers, and even important members of the Trump team, such as Elon Musk, believe in climate change and the energy transition. Otherwise, Mr. Musk would not have built Tesla electric cars, which even Trump supposedly admires. On the other hand, hardcore deniers remain.

The point is not to enact policies just because they are the opposite of those of the other party. Republicans should have their own independent environmental and climate policy. This is contrary to the simple gutting of previous policies.

A drastic reduction in environmental standards would subject Americans to more polluted, less desirable towns and cities, resulting in greater health damage. It would hit hardest the very working class Trump is trying to protect. Similarly, with climate warming, many rollbacks may be counterproductive. As noted, significant benefits of the Inflation Reduction Act have gone to Republican states. Thus, smart new Republican policies are required.

An area of possible agreement among Republicans and Democrats is climate adaptation. Certainly, the federal and state governments are involved in helping with climate-related disasters. The total costs in 2024 of climate and weather-related events exceed $61 billion. Hurricanes Helene and Milton may add another $100 billion or more to the 2024 cost total. The years 2024 and 2023 are well ahead of all other years regarding the frequency of U.S. billion-dollar events. Forest fires once typical of the South and West have begun to strike the North and East, even in drought-stricken cities as far north as NYC.

For example, incentives for investments in adaptation could be acceptable, particularly if concentrated in areas where blue-collar workers and their families live. Support for the application of better building codes could be made. Preventive climate adaptation could benefit federal buildings. According to the National Resource Defense Council, many regional planning experts have called on the government to enact stricter regulations that account for the effects of climate change in higher-risk areas in order to prevent a widespread housing crisis and bolster protection for vulnerable populations.

Some climate issues will be settled by the market itself. Heat pumps are simply the most economical way of heating and cooling and will replace fossil fuel technologies. Wind and photovoltaic costs for electricity production have plummeted in the last decade, and new capacity is increasing. Renewables made up 30% of the global electricity mix in 2023.

According to the International Renewable Energy Agency (IRENA), in 2023, the global weighted average cost of electricity from solar PV fell to 0.049/kWh, almost one-third less than the cheapest fossil fuel globally. For onshore wind, the fall was to USD 0.033/kWh in 2022, slightly less than half that of the cheapest fossil fuel-fired option in 2022. Comparisons differ according to local availabilities and interest rates. It must be remembered that fossil fuels do not include the full costs of pollution and climate damage. In spite of this, solar and wind energy are very competitive with oil, gas, and coal for the production of electricity.

During the last decade, China has fostered the development of photovoltaic panels, wind turbines, electric storage, and electric vehicles through R&D and massive production programs, benefiting from the large internal market. For example, China has invested over USD 50 billion in new PV supply capacity—ten times more than Europe—and created more than 300,000 manufacturing jobs across the solar PV value chain since 2011.

Currently, China produces 80 percent of photovoltaic panels worldwide, with about half for its domestic market, 60 percent of the production capacity of wind turbines, and 50 percent of electric vehicles produced globally. Chinese companies supply 80 percent of the world's battery cells and account for nearly 60 percent of the EV battery market.

Initial protective tariffs on Chinese goods will be necessary, but the U.S. must become competitive in the alternative energy markets. Oil and gas are most difficult to replace in the chemical and petrochemical sectors, and the phasing out of gasoline and diesel in transportation will require decades, but the U.S. must participate in the global markets for alternative energy and its final products, such as electric vehicles. “Drill baby drill” does not exclude a smart solar policy. The U.S. cannot afford uncompetitive long-term energy costs. Elon Musk, who has factories in China, is in the position to advise Trump on this delicate transition. A parallel “Sun Shine Sun” program may emerge.

U.S. business leaders generally support cooperation, trade, and peace with China. If Trump succeeds in accelerating the end of the wars in Ukraine and the Middle East, we can hope for a period of peace. Reduced military spending would also free resources for many other priorities.